File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Federal Income Tax Form 1040ez

2012 Income Tax Form 1040How To File Amended TaxesAmending Federal Tax ReturnsIrs Tax Form 1040 Ez1040a 2012 InstructionsUnemployed Tax CreditIrs Form 1040ez 2011Easy Tax FormNj 1040xFreefilefillableforms Com1040ez Forms PrintableState Tax FilingFile 1040xIrs Form 1040ez 2013File Free H&r BlockIrs Gov Forms Form 1040xTax Deductions For College StudentsDownload 1040ez Form1040x For DummiesIllinois State Tax Forms 2011Ct 1040nr PyMy Free TaxesWhere To File Amended 1040xTax Form 1040 EzFree Efile TaxesFile Tax ReturnIrs Form 1040ez Fillable1040 NrWhere Can I File Just My State TaxesHrblockWww Irs Gov Form 1040xFree File Amended Tax ReturnState Tax Online FilingFile 2011 Tax OnlineHow To E File State Taxes For FreeForm 1040x More:label_form_201040x More:taxes2011 Tax 1040 Form1040ez EfileFree E File For State TaxesIrs Gov Forms

Federal Income Tax Form 1040ez

Federal income tax form 1040ez Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Federal income tax form 1040ez Proc. Federal income tax form 1040ez 2013-16 Table of Contents SECTION 1. Federal income tax form 1040ez PURPOSE SECTION 2. Federal income tax form 1040ez BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Federal income tax form 1040ez BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Federal income tax form 1040ez FEDERAL INCOME TAX TREATMENT SECTION 5. Federal income tax form 1040ez INFORMATION-REPORTING OBLIGATIONS SECTION 6. Federal income tax form 1040ez HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Federal income tax form 1040ez PENALTY RELIEF FOR 2012 SECTION 8. Federal income tax form 1040ez SCOPE AND EFFECTIVE DATE SECTION 9. Federal income tax form 1040ez DRAFTING INFORMATION SECTION 1. Federal income tax form 1040ez PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Federal income tax form 1040ez Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Federal income tax form 1040ez In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Federal income tax form 1040ez Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Federal income tax form 1040ez The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Federal income tax form 1040ez SECTION 2. Federal income tax form 1040ez BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Federal income tax form 1040ez 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Federal income tax form 1040ez A description of the program can be found at www. Federal income tax form 1040ez makinghomeaffordable. Federal income tax form 1040ez gov. Federal income tax form 1040ez . Federal income tax form 1040ez 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Federal income tax form 1040ez These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Federal income tax form 1040ez . Federal income tax form 1040ez 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Federal income tax form 1040ez The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Federal income tax form 1040ez However, as noted in section 2. Federal income tax form 1040ez 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Federal income tax form 1040ez (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Federal income tax form 1040ez ”) . Federal income tax form 1040ez 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Federal income tax form 1040ez . Federal income tax form 1040ez 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Federal income tax form 1040ez The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Federal income tax form 1040ez (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Federal income tax form 1040ez ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Federal income tax form 1040ez Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Federal income tax form 1040ez Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Federal income tax form 1040ez . Federal income tax form 1040ez 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Federal income tax form 1040ez (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Federal income tax form 1040ez ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Federal income tax form 1040ez . Federal income tax form 1040ez 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Federal income tax form 1040ez If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Federal income tax form 1040ez These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Federal income tax form 1040ez The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Federal income tax form 1040ez The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Federal income tax form 1040ez For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Federal income tax form 1040ez ” . Federal income tax form 1040ez 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Federal income tax form 1040ez . Federal income tax form 1040ez 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Federal income tax form 1040ez 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Federal income tax form 1040ez . Federal income tax form 1040ez 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Federal income tax form 1040ez SECTION 3. Federal income tax form 1040ez BACKGROUND—APPLICABLE PROVISIONS OF LAW . Federal income tax form 1040ez 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Federal income tax form 1040ez See § 61(a)(12). Federal income tax form 1040ez . Federal income tax form 1040ez 02 Under § 1. Federal income tax form 1040ez 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Federal income tax form 1040ez In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Federal income tax form 1040ez However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Federal income tax form 1040ez See § 1. Federal income tax form 1040ez 1001-3(c)(6). Federal income tax form 1040ez . Federal income tax form 1040ez 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Federal income tax form 1040ez 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Federal income tax form 1040ez If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Federal income tax form 1040ez See also § 1. Federal income tax form 1040ez 61-12(c). Federal income tax form 1040ez . Federal income tax form 1040ez 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Federal income tax form 1040ez If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Federal income tax form 1040ez See, e. Federal income tax form 1040ez g. Federal income tax form 1040ez , §§ 1. Federal income tax form 1040ez 1272-1(c)(5) and 1. Federal income tax form 1040ez 1274-2(d). Federal income tax form 1040ez . Federal income tax form 1040ez 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Federal income tax form 1040ez Section 108(a)(1)(E) and 108(a)(1)(B). Federal income tax form 1040ez (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Federal income tax form 1040ez ) . Federal income tax form 1040ez 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Federal income tax form 1040ez . Federal income tax form 1040ez 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Federal income tax form 1040ez See §§ 108(h) and 163(h)(3)(B)(i). Federal income tax form 1040ez . Federal income tax form 1040ez 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Federal income tax form 1040ez Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Federal income tax form 1040ez . Federal income tax form 1040ez 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Federal income tax form 1040ez . Federal income tax form 1040ez 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Federal income tax form 1040ez Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Federal income tax form 1040ez . Federal income tax form 1040ez 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Federal income tax form 1040ez See § 108(h)(1). Federal income tax form 1040ez If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Federal income tax form 1040ez See § 108(b). Federal income tax form 1040ez For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Federal income tax form 1040ez . Federal income tax form 1040ez 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Federal income tax form 1040ez See Form 982 instructions and Publication 4681. Federal income tax form 1040ez This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Federal income tax form 1040ez . Federal income tax form 1040ez 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Federal income tax form 1040ez See Notice 2003-18, 2003-1 C. Federal income tax form 1040ez B. Federal income tax form 1040ez 699, and Rev. Federal income tax form 1040ez Rul. Federal income tax form 1040ez 79-356, 1979-2 C. Federal income tax form 1040ez B. Federal income tax form 1040ez 28. Federal income tax form 1040ez However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Federal income tax form 1040ez See Rev. Federal income tax form 1040ez Rul. Federal income tax form 1040ez 2005-46, 2005-2 C. Federal income tax form 1040ez B. Federal income tax form 1040ez 120, and Rev. Federal income tax form 1040ez Rul. Federal income tax form 1040ez 75-246, 1975-1 C. Federal income tax form 1040ez B. Federal income tax form 1040ez 24. Federal income tax form 1040ez . Federal income tax form 1040ez 14 Under § 451 and § 1. Federal income tax form 1040ez 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Federal income tax form 1040ez . Federal income tax form 1040ez 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Federal income tax form 1040ez See § 6041(a) and (d) and § 1. Federal income tax form 1040ez 6041-1(a)(1) and (b). Federal income tax form 1040ez . Federal income tax form 1040ez 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Federal income tax form 1040ez See § 6050P(a)-(c) and §§ 1. Federal income tax form 1040ez 6050P-1(a) and 1. Federal income tax form 1040ez 6050P-2(a) and (d). Federal income tax form 1040ez . Federal income tax form 1040ez 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Federal income tax form 1040ez These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Federal income tax form 1040ez Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Federal income tax form 1040ez ” . Federal income tax form 1040ez 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Federal income tax form 1040ez These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Federal income tax form 1040ez Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Federal income tax form 1040ez SECTION 4. Federal income tax form 1040ez FEDERAL INCOME TAX TREATMENT . Federal income tax form 1040ez 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Federal income tax form 1040ez See § 1. Federal income tax form 1040ez 1001-3. Federal income tax form 1040ez At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Federal income tax form 1040ez See also § 61(a)(12) and § 1. Federal income tax form 1040ez 61-12(c). Federal income tax form 1040ez . Federal income tax form 1040ez 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Federal income tax form 1040ez Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Federal income tax form 1040ez Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Federal income tax form 1040ez . Federal income tax form 1040ez 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Federal income tax form 1040ez Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Federal income tax form 1040ez . Federal income tax form 1040ez 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Federal income tax form 1040ez Therefore, for purposes of § 1. Federal income tax form 1040ez 1001-3, the date of the modification is the date of the permanent modification. Federal income tax form 1040ez . Federal income tax form 1040ez 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Federal income tax form 1040ez 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Federal income tax form 1040ez Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Federal income tax form 1040ez The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Federal income tax form 1040ez . Federal income tax form 1040ez 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Federal income tax form 1040ez . Federal income tax form 1040ez 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Federal income tax form 1040ez This is consistent with Rev. Federal income tax form 1040ez Rul. Federal income tax form 1040ez 2009-19, 2009-28 I. Federal income tax form 1040ez R. Federal income tax form 1040ez B. Federal income tax form 1040ez 111, which addressed the treatment of Pay-for-Performance Success Payments. Federal income tax form 1040ez . Federal income tax form 1040ez 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Federal income tax form 1040ez If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Federal income tax form 1040ez . Federal income tax form 1040ez 09 As described in section 2. Federal income tax form 1040ez 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Federal income tax form 1040ez To the extent that the HAMP-PRA borrower is described in section 4. Federal income tax form 1040ez 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Federal income tax form 1040ez To the extent that the HAMP-PRA borrower is described in section 4. Federal income tax form 1040ez 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Federal income tax form 1040ez SECTION 5. Federal income tax form 1040ez INFORMATION-REPORTING OBLIGATIONS . Federal income tax form 1040ez 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Federal income tax form 1040ez A copy of this form is required to be furnished to the borrower. Federal income tax form 1040ez . Federal income tax form 1040ez 02 As stated in sections 4. Federal income tax form 1040ez 01 and 4. Federal income tax form 1040ez 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Federal income tax form 1040ez . Federal income tax form 1040ez 03 An investor is an applicable entity that is required under § 1. Federal income tax form 1040ez 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Federal income tax form 1040ez Under § 1. Federal income tax form 1040ez 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Federal income tax form 1040ez Identifiable events determine when Forms 1099-C have to be issued. Federal income tax form 1040ez Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Federal income tax form 1040ez This rule under § 1. Federal income tax form 1040ez 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Federal income tax form 1040ez . Federal income tax form 1040ez 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Federal income tax form 1040ez That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Federal income tax form 1040ez . Federal income tax form 1040ez 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Federal income tax form 1040ez 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Federal income tax form 1040ez Under § 6041, these payments are not subject to information reporting. Federal income tax form 1040ez See Notice 2011-14, 2011-11 I. Federal income tax form 1040ez R. Federal income tax form 1040ez B. Federal income tax form 1040ez 544, 546. Federal income tax form 1040ez . Federal income tax form 1040ez 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Federal income tax form 1040ez 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Federal income tax form 1040ez The payment is subject to the information reporting requirements of § 6041, as described in section 3. Federal income tax form 1040ez 15 of this revenue procedure. Federal income tax form 1040ez Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Federal income tax form 1040ez SECTION 6. Federal income tax form 1040ez HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Federal income tax form 1040ez 01 In general. Federal income tax form 1040ez The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Federal income tax form 1040ez As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Federal income tax form 1040ez Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Federal income tax form 1040ez A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Federal income tax form 1040ez 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Federal income tax form 1040ez Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Federal income tax form 1040ez 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Federal income tax form 1040ez . Federal income tax form 1040ez 02 HAMP-PRA borrower options. Federal income tax form 1040ez A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Federal income tax form 1040ez 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Federal income tax form 1040ez If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Federal income tax form 1040ez 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Federal income tax form 1040ez . Federal income tax form 1040ez 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Federal income tax form 1040ez (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Federal income tax form 1040ez (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Federal income tax form 1040ez 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Federal income tax form 1040ez 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Federal income tax form 1040ez This section 6. Federal income tax form 1040ez 03(2) applies only if the change to reporting the discharge using the method described in section 6. Federal income tax form 1040ez 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Federal income tax form 1040ez To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Federal income tax form 1040ez (3) Example. Federal income tax form 1040ez The following example illustrates the application of section 6. Federal income tax form 1040ez 03(2) of this revenue procedure. Federal income tax form 1040ez In 2010, B’s basis in B’s principal residence was $330,000. Federal income tax form 1040ez In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Federal income tax form 1040ez B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Federal income tax form 1040ez The trial period plan effective date also fell in 2010. Federal income tax form 1040ez B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Federal income tax form 1040ez 02(2) of this revenue procedure. Federal income tax form 1040ez That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Federal income tax form 1040ez The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Federal income tax form 1040ez For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Federal income tax form 1040ez 02(1) of this revenue procedure. Federal income tax form 1040ez Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Federal income tax form 1040ez 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Federal income tax form 1040ez (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Federal income tax form 1040ez 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Federal income tax form 1040ez 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Federal income tax form 1040ez Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Federal income tax form 1040ez 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Federal income tax form 1040ez Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Federal income tax form 1040ez (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Federal income tax form 1040ez 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Federal income tax form 1040ez The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Federal income tax form 1040ez (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Federal income tax form 1040ez The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Federal income tax form 1040ez The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Federal income tax form 1040ez . Federal income tax form 1040ez 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Federal income tax form 1040ez (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Federal income tax form 1040ez Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Federal income tax form 1040ez Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Federal income tax form 1040ez If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Federal income tax form 1040ez (2) A HAMP-PRA borrower who has been using the method described in section 6. Federal income tax form 1040ez 02(1) of this revenue procedure may change to the method described in section 6. Federal income tax form 1040ez 02(2) but must comply with the consistency and open-year requirements described in section 6. Federal income tax form 1040ez 01 of this revenue procedure. Federal income tax form 1040ez SECTION 7. Federal income tax form 1040ez PENALTY RELIEF FOR 2012 . Federal income tax form 1040ez 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Federal income tax form 1040ez 03 through 5. Federal income tax form 1040ez 04 and section 8. Federal income tax form 1040ez 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Federal income tax form 1040ez 01 through 4. Federal income tax form 1040ez 04 of this revenue procedure) that is required to be reported for 2012. Federal income tax form 1040ez (2) Not later than March 28, 2013, a statement is sent to the Service. Federal income tax form 1040ez It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Federal income tax form 1040ez 01(1) of this revenue procedure. Federal income tax form 1040ez The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Federal income tax form 1040ez 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Federal income tax form 1040ez 06 and 8. Federal income tax form 1040ez 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Federal income tax form 1040ez . Federal income tax form 1040ez 03 Section 8. Federal income tax form 1040ez 03 and 8. Federal income tax form 1040ez 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Federal income tax form 1040ez SECTION 8. Federal income tax form 1040ez SCOPE AND EFFECTIVE DATE . Federal income tax form 1040ez 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Federal income tax form 1040ez . Federal income tax form 1040ez 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Federal income tax form 1040ez . Federal income tax form 1040ez 03 Because of the effective date in section 8. Federal income tax form 1040ez 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Federal income tax form 1040ez 03 through 5. Federal income tax form 1040ez 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Federal income tax form 1040ez 03 through 5. Federal income tax form 1040ez 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Federal income tax form 1040ez . Federal income tax form 1040ez 04 Because of the effective date in section 8. Federal income tax form 1040ez 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Federal income tax form 1040ez 06 of this revenue procedure. Federal income tax form 1040ez SECTION 9. Federal income tax form 1040ez DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Federal income tax form 1040ez Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Federal income tax form 1040ez Pflanz and Sheldon A. Federal income tax form 1040ez Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Federal income tax form 1040ez Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Federal income tax form 1040ez For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Federal income tax form 1040ez Prev  Up  Next   Home   More Internal Revenue Bulletins
Español

Multifamily Housing Office

The Multifamily Housing Office administers the Department of Housing and Urban Development's multifamily housing programs through a network of local offices across the country.

Contact the Agency or Department

Website: Multifamily Housing Office

Phone Number: (202) 708-1112 (Housing and Urban Development)

TTY: (202) 708-1455 (Housing and Urban Development)

The Federal Income Tax Form 1040ez

Federal income tax form 1040ez 3. Federal income tax form 1040ez   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. Federal income tax form 1040ez Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. Federal income tax form 1040ez Certain contracts held by a charitable remainder trust. Federal income tax form 1040ez Excise Taxes. Federal income tax form 1040ez Indoor tanning services. Federal income tax form 1040ez Application for Recognition of ExemptionPolitical activity. Federal income tax form 1040ez Private delivery service. Federal income tax form 1040ez Amendments to organizing documents required. Federal income tax form 1040ez How to show reasonable action and good faith. Federal income tax form 1040ez Not acting reasonably and in good faith. Federal income tax form 1040ez Prejudicing the interest of the Government. Federal income tax form 1040ez Procedure for requesting extension. Federal income tax form 1040ez More information. Federal income tax form 1040ez Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. Federal income tax form 1040ez Grass roots expenditures. Federal income tax form 1040ez Lobbying nontaxable amount. Federal income tax form 1040ez Grass roots nontaxable amount. Federal income tax form 1040ez Organization that no longer qualifies. Federal income tax form 1040ez Tax on organization. Federal income tax form 1040ez Tax on managers. Federal income tax form 1040ez Taxes on organizations. Federal income tax form 1040ez Taxes on managers. Federal income tax form 1040ez Political expenditures. Federal income tax form 1040ez Correction of expenditure. Federal income tax form 1040ez Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. Federal income tax form 1040ez Religious. Federal income tax form 1040ez Charitable. Federal income tax form 1040ez Scientific. Federal income tax form 1040ez Testing for public safety. Federal income tax form 1040ez Literary. Federal income tax form 1040ez Educational. Federal income tax form 1040ez Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). Federal income tax form 1040ez The prevention of cruelty to children or animals. Federal income tax form 1040ez To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. Federal income tax form 1040ez A trust is a fund or foundation and will qualify. Federal income tax form 1040ez However, an individual or a partnership will not qualify. Federal income tax form 1040ez Examples. Federal income tax form 1040ez   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. Federal income tax form 1040ez Child care organizations. Federal income tax form 1040ez   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. Federal income tax form 1040ez Instrumentalities. Federal income tax form 1040ez   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). Federal income tax form 1040ez Examples of a qualifying instrumentality might include state schools, universities, or hospitals. Federal income tax form 1040ez However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. Federal income tax form 1040ez A state or municipality itself does not qualify for exemption. Federal income tax form 1040ez Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. Federal income tax form 1040ez Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. Federal income tax form 1040ez Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. Federal income tax form 1040ez Fundraising events. Federal income tax form 1040ez   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. Federal income tax form 1040ez This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. Federal income tax form 1040ez   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. Federal income tax form 1040ez If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. Federal income tax form 1040ez You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. Federal income tax form 1040ez See Disclosure of Quid Pro Quo Contributions in chapter 2. Federal income tax form 1040ez Exemption application not filed. Federal income tax form 1040ez   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. Federal income tax form 1040ez Separate fund—contributions that are deductible. Federal income tax form 1040ez   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. Federal income tax form 1040ez   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. Federal income tax form 1040ez A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. Federal income tax form 1040ez Personal benefit contracts. Federal income tax form 1040ez   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. Federal income tax form 1040ez   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. Federal income tax form 1040ez Certain annuity contracts. Federal income tax form 1040ez   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). Federal income tax form 1040ez Certain contracts held by a charitable remainder trust. Federal income tax form 1040ez   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. Federal income tax form 1040ez Excise tax. Federal income tax form 1040ez   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. Federal income tax form 1040ez The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. Federal income tax form 1040ez Excise Taxes. Federal income tax form 1040ez   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. Federal income tax form 1040ez Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. Federal income tax form 1040ez Indoor tanning services. Federal income tax form 1040ez   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. Federal income tax form 1040ez For more information, go to IRS. Federal income tax form 1040ez gov and select Affordable Care Act Tax Provisions. Federal income tax form 1040ez Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. Federal income tax form 1040ez For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. Federal income tax form 1040ez See the organization headings that follow for specific information your organization may need to provide. Federal income tax form 1040ez Form 1023. Federal income tax form 1040ez   Your organization must file its application for recognition of exemption on Form 1023. Federal income tax form 1040ez See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. Federal income tax form 1040ez Some organizations are not required to file Form 1023. Federal income tax form 1040ez See Organizations Not Required To File Form 1023, later. Federal income tax form 1040ez    Additional information to help you complete your application can be found online. Federal income tax form 1040ez Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. Federal income tax form 1040ez See Exemption Requirements - Section 501(c)(3) Organizations. Federal income tax form 1040ez   Form 1023 and accompanying statements must show that all of the following are true. Federal income tax form 1040ez The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. Federal income tax form 1040ez ) specified in the introduction to this chapter. Federal income tax form 1040ez No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. Federal income tax form 1040ez You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. Federal income tax form 1040ez The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. Federal income tax form 1040ez See Political activity, next, and Lobbying Expenditures , near the end of this chapter. Federal income tax form 1040ez Political activity. Federal income tax form 1040ez   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). Federal income tax form 1040ez Such participation or intervention includes the publishing or distributing of statements. Federal income tax form 1040ez   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Federal income tax form 1040ez Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. Federal income tax form 1040ez Effective date of exemption. Federal income tax form 1040ez   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. Federal income tax form 1040ez These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. Federal income tax form 1040ez If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. Federal income tax form 1040ez Otherwise, exemption will be recognized only from the date of receipt. Federal income tax form 1040ez The date of receipt is the date of the U. Federal income tax form 1040ez S. Federal income tax form 1040ez postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. Federal income tax form 1040ez Private delivery service. Federal income tax form 1040ez   If a private delivery service designated by the IRS, rather than the U. Federal income tax form 1040ez S. Federal income tax form 1040ez Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. Federal income tax form 1040ez The following private delivery services have been designated by the IRS. Federal income tax form 1040ez DHL Express (DHL): DHL “Same Day” Service. Federal income tax form 1040ez Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Federal income tax form 1040ez United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Federal income tax form 1040ez M. Federal income tax form 1040ez , UPS Worldwide Express Plus, and UPS Worldwide Express. Federal income tax form 1040ez Amendments to organizing documents required. Federal income tax form 1040ez   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. Federal income tax form 1040ez If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. Federal income tax form 1040ez Extensions of time for filing. Federal income tax form 1040ez   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. Federal income tax form 1040ez Automatic 12-month extension. Federal income tax form 1040ez Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. Federal income tax form 1040ez To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. Federal income tax form 1040ez 9100-2. Federal income tax form 1040ez ” Discretionary extensions. Federal income tax form 1040ez An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. Federal income tax form 1040ez How to show reasonable action and good faith. Federal income tax form 1040ez   An organization acted reasonably and showed good faith if at least one of the following is true. Federal income tax form 1040ez The organization requests relief before its failure to file is discovered by the IRS. Federal income tax form 1040ez The organization failed to file because of intervening events beyond its control. Federal income tax form 1040ez The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. Federal income tax form 1040ez The organization reasonably relied upon the written advice of the IRS. Federal income tax form 1040ez The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. Federal income tax form 1040ez An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. Federal income tax form 1040ez Not acting reasonably and in good faith. Federal income tax form 1040ez   An organization has not acted reasonably and in good faith under the following circumstances. Federal income tax form 1040ez It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. Federal income tax form 1040ez It was informed of the requirement to file and related tax consequences, but chose not to file. Federal income tax form 1040ez It uses hindsight in requesting relief. Federal income tax form 1040ez The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. Federal income tax form 1040ez Prejudicing the interest of the Government. Federal income tax form 1040ez   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. Federal income tax form 1040ez Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. Federal income tax form 1040ez The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. Federal income tax form 1040ez The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. Federal income tax form 1040ez Procedure for requesting extension. Federal income tax form 1040ez   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. Federal income tax form 1040ez A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. Federal income tax form 1040ez Any documents relevant to the application. Federal income tax form 1040ez An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. Federal income tax form 1040ez If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. Federal income tax form 1040ez This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Federal income tax form 1040ez ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. Federal income tax form 1040ez This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. Federal income tax form 1040ez The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. Federal income tax form 1040ez These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Federal income tax form 1040ez ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. Federal income tax form 1040ez The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. Federal income tax form 1040ez The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. Federal income tax form 1040ez   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. Federal income tax form 1040ez Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. Federal income tax form 1040ez More information. Federal income tax form 1040ez   For more information about these procedures, see Regulations sections 301. Federal income tax form 1040ez 9100-1, 301. Federal income tax form 1040ez 9100-2, 301. Federal income tax form 1040ez 9100-3, Revenue Procedure 2013-4, section 6. Federal income tax form 1040ez 04, 2013-1 I. Federal income tax form 1040ez R. Federal income tax form 1040ez B. Federal income tax form 1040ez 126, and Revenue Procedure 2013-8, 2013-1 I. Federal income tax form 1040ez R. Federal income tax form 1040ez B. Federal income tax form 1040ez 237. Federal income tax form 1040ez See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. Federal income tax form 1040ez Notification from the IRS. Federal income tax form 1040ez   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. Federal income tax form 1040ez Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. Federal income tax form 1040ez These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. Federal income tax form 1040ez Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). Federal income tax form 1040ez These organizations are exempt automatically if they meet the requirements of section 501(c)(3). Federal income tax form 1040ez Filing Form 1023 to establish exemption. Federal income tax form 1040ez   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. Federal income tax form 1040ez By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. Federal income tax form 1040ez A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. Federal income tax form 1040ez Private foundations. Federal income tax form 1040ez   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. Federal income tax form 1040ez Gross receipts test. Federal income tax form 1040ez   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. Federal income tax form 1040ez   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. Federal income tax form 1040ez For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. Federal income tax form 1040ez The organization must file Form 1023 within 90 days after the end of its second tax year. Federal income tax form 1040ez   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. Federal income tax form 1040ez However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. Federal income tax form 1040ez Example. Federal income tax form 1040ez   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. Federal income tax form 1040ez It was incorporated on January 1, 2009, and files returns on a calendar-year basis. Federal income tax form 1040ez It did not file a Form 1023. Federal income tax form 1040ez The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. Federal income tax form 1040ez Therefore, it did not have to file Form 1023 and is exempt for those years. Federal income tax form 1040ez However, for 2010, 2011, and 2012 the total gross receipts were $15,900. Federal income tax form 1040ez Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. Federal income tax form 1040ez If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. Federal income tax form 1040ez The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. Federal income tax form 1040ez   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. Federal income tax form 1040ez See the procedures for this extension discussed earlier. Federal income tax form 1040ez Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. Federal income tax form 1040ez This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. Federal income tax form 1040ez Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. Federal income tax form 1040ez These conditions for exemption are referred to as the organizational test. Federal income tax form 1040ez Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. Federal income tax form 1040ez Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). Federal income tax form 1040ez The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. Federal income tax form 1040ez Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. Federal income tax form 1040ez Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. Federal income tax form 1040ez In interpreting an organization's articles, the law of the state where the organization was created is controlling. Federal income tax form 1040ez If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. Federal income tax form 1040ez The following are examples illustrating the organizational test. Federal income tax form 1040ez Example 1. Federal income tax form 1040ez Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). Federal income tax form 1040ez These articles appropriately limit the organization's purposes. Federal income tax form 1040ez The organization meets the organizational test. Federal income tax form 1040ez Example 2. Federal income tax form 1040ez An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. Federal income tax form 1040ez The organization will not be properly limited as to its purposes since all research is not scientific. Federal income tax form 1040ez The organization does not meet the organizational test. Federal income tax form 1040ez Example 3. Federal income tax form 1040ez An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). Federal income tax form 1040ez The organization meets the organizational test. Federal income tax form 1040ez Example 4. Federal income tax form 1040ez If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. Federal income tax form 1040ez Example 5. Federal income tax form 1040ez If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. Federal income tax form 1040ez On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. Federal income tax form 1040ez Example 6. Federal income tax form 1040ez If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. Federal income tax form 1040ez Such purposes are vague and may be accomplished other than in an exempt manner. Federal income tax form 1040ez Example 7. Federal income tax form 1040ez A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. Federal income tax form 1040ez A hospital may or may not be exempt depending on the manner in which it is operated. Federal income tax form 1040ez Example 8. Federal income tax form 1040ez An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. Federal income tax form 1040ez Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. Federal income tax form 1040ez This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. Federal income tax form 1040ez If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. Federal income tax form 1040ez Dedication. Federal income tax form 1040ez   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. Federal income tax form 1040ez Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. Federal income tax form 1040ez Distribution. Federal income tax form 1040ez   Revenue Procedure 82-2, 1982-1 C. Federal income tax form 1040ez B. Federal income tax form 1040ez 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. Federal income tax form 1040ez The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. Federal income tax form 1040ez   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. Federal income tax form 1040ez Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. Federal income tax form 1040ez Sample articles of organization. Federal income tax form 1040ez   See sample articles of organization in the Appendix in the back of this publication. Federal income tax form 1040ez Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. Federal income tax form 1040ez In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. Federal income tax form 1040ez You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. Federal income tax form 1040ez If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. Federal income tax form 1040ez See also Private Schools , discussed later. Federal income tax form 1040ez Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. Federal income tax form 1040ez Advocacy of a position. Federal income tax form 1040ez   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. Federal income tax form 1040ez The mere presentation of unsupported opinion is not educational. Federal income tax form 1040ez Method not educational. Federal income tax form 1040ez   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). Federal income tax form 1040ez The following factors may indicate that the method is not educational. Federal income tax form 1040ez The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. Federal income tax form 1040ez The facts that purport to support the viewpoint are distorted. Federal income tax form 1040ez The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. Federal income tax form 1040ez The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. Federal income tax form 1040ez   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. Federal income tax form 1040ez Qualifying organizations. Federal income tax form 1040ez   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. Federal income tax form 1040ez College book stores, cafeterias, restaurants, etc. Federal income tax form 1040ez   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. Federal income tax form 1040ez Alumni association. Federal income tax form 1040ez   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. Federal income tax form 1040ez If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . Federal income tax form 1040ez Athletic organization. Federal income tax form 1040ez   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. Federal income tax form 1040ez If it is not so engaged, your organization may be exempt as a social club described in chapter 4. Federal income tax form 1040ez Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. Federal income tax form 1040ez If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. Federal income tax form 1040ez Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. Federal income tax form 1040ez The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. Federal income tax form 1040ez (This information also must be projected, so far as may be feasible, for the next academic year. Federal income tax form 1040ez ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. Federal income tax form 1040ez A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. Federal income tax form 1040ez A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. Federal income tax form 1040ez The public school district and county in which the school is located. Federal income tax form 1040ez How to determine racial composition. Federal income tax form 1040ez   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. Federal income tax form 1040ez Nevertheless, a statement of the method by which the racial composition was determined must be supplied. Federal income tax form 1040ez The identity of individual students or members of the faculty and administrative staff should not be included with this information. Federal income tax form 1040ez   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. Federal income tax form 1040ez Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. Federal income tax form 1040ez Also, the school must circulate information that clearly states the school's admission policies. Federal income tax form 1040ez A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. Federal income tax form 1040ez The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. Federal income tax form 1040ez The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. Federal income tax form 1040ez Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. Federal income tax form 1040ez A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. Federal income tax form 1040ez A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. Federal income tax form 1040ez Policy statement. Federal income tax form 1040ez   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. Federal income tax form 1040ez Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. Federal income tax form 1040ez Publicity requirement. Federal income tax form 1040ez   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. Federal income tax form 1040ez Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. Federal income tax form 1040ez To satisfy this requirement, the school must use one of the following two methods. Federal income tax form 1040ez Method one. Federal income tax form 1040ez   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. Federal income tax form 1040ez Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Federal income tax form 1040ez When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. Federal income tax form 1040ez If this method is used, the notice must meet the following printing requirements. Federal income tax form 1040ez It must appear in a section of the newspaper likely to be read by prospective students and their families. Federal income tax form 1040ez It must occupy at least 3 column inches. Federal income tax form 1040ez It must have its title printed in at least 12 point bold face type. Federal income tax form 1040ez It must have the remaining text printed in at least 8 point type. Federal income tax form 1040ez The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. Federal income tax form 1040ez It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. Federal income tax form 1040ez   Method two. Federal income tax form 1040ez   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. Federal income tax form 1040ez If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. Federal income tax form 1040ez In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. Federal income tax form 1040ez The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. Federal income tax form 1040ez Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Federal income tax form 1040ez Exceptions. Federal income tax form 1040ez   The publicity requirements will not apply in the following situations. Federal income tax form 1040ez First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. Federal income tax form 1040ez These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. Federal income tax form 1040ez If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. Federal income tax form 1040ez Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . Federal income tax form 1040ez   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. Federal income tax form 1040ez The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. Federal income tax form 1040ez   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. Federal income tax form 1040ez Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. Federal income tax form 1040ez   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. Federal income tax form 1040ez The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. Federal income tax form 1040ez In this regard, it is each school's responsibility to determine whether either of the exceptions applies. Federal income tax form 1040ez Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. Federal income tax form 1040ez Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. Federal income tax form 1040ez Facilities and programs. Federal income tax form 1040ez   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. Federal income tax form 1040ez Scholarship and loan programs. Federal income tax form 1040ez   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. Federal income tax form 1040ez This must be known throughout the general community being served by the school and should be referred to in its publicity. Federal income tax form 1040ez Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. Federal income tax form 1040ez Certification. Federal income tax form 1040ez   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. Federal income tax form 1040ez   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. Federal income tax form 1040ez Recordkeeping requirements. Federal income tax form 1040ez With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. Federal income tax form 1040ez Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. Federal income tax form 1040ez Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. Federal income tax form 1040ez Copies of all materials used by or on behalf of the school to solicit contributions. Federal income tax form 1040ez Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. Federal income tax form 1040ez (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. Federal income tax form 1040ez ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. Federal income tax form 1040ez However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. Federal income tax form 1040ez The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. Federal income tax form 1040ez Similarly, the IRS does not require a school to keep records prohibited under state or federal law. Federal income tax form 1040ez Exceptions. Federal income tax form 1040ez   The school does not have to independently maintain these records for IRS use if both of the following are true. Federal income tax form 1040ez Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. Federal income tax form 1040ez The school maintains copies of these reports from which this information is readily obtainable. Federal income tax form 1040ez If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. Federal income tax form 1040ez Failure to maintain records. Federal income tax form 1040ez   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. Federal income tax form 1040ez Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. Federal income tax form 1040ez However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. Federal income tax form 1040ez Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). Federal income tax form 1040ez Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. Federal income tax form 1040ez Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. Federal income tax form 1040ez Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. Federal income tax form 1040ez The rest of this section contains a description of the information to be provided by certain specific organizations. Federal income tax form 1040ez This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. Federal income tax form 1040ez Each of the following organizations must submit the information described. Federal income tax form 1040ez Charitable organization supporting education. Federal income tax form 1040ez   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. Federal income tax form 1040ez Scholarships. Federal income tax form 1040ez   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. Federal income tax form 1040ez Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. Federal income tax form 1040ez How and by whom the recipients are or will be selected. Federal income tax form 1040ez If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. Federal income tax form 1040ez If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. Federal income tax form 1040ez A copy of the scholarship application form and any brochures or literature describing the scholarship program. Federal income tax form 1040ez Hospital. Federal income tax form 1040ez   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. Federal income tax form 1040ez   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. Federal income tax form 1040ez You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. Federal income tax form 1040ez Submit also an appraisal showing the fair rental value of the rented space. Federal income tax form 1040ez Clinic. Federal income tax form 1040ez   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. Federal income tax form 1040ez Home for the aged. Federal income tax form 1040ez   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. Federal income tax form 1040ez Community nursing bureau. Federal income tax form 1040ez   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. Federal income tax form 1040ez Organization providing loans. Federal income tax form 1040ez   If you make, or will make, loans for charitable and educational purposes, submit the following information. Federal income tax form 1040ez An explanation of the circumstances under which such loans are, or will be, made. Federal income tax form 1040ez Criteria for selection, including the rules of eligibility. Federal income tax form 1040ez How and by whom the recipients are or will be selected. Federal income tax form 1040ez Manner of repayment of the loan. Federal income tax form 1040ez Security required, if any. Federal income tax form 1040ez Interest charged, if any, and when payable. Federal income tax form 1040ez Copies in duplicate of the loan application and any brochures or literature describing the loan program. Federal income tax form 1040ez Public-interest law firms. Federal income tax form 1040ez   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. Federal income tax form 1040ez How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. Federal income tax form 1040ez Whether the organization will accept fees for its services. Federal income tax form 1040ez A description of the cases litigated or to be litigated and how they benefit the public generally. Federal income tax form 1040ez Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. Federal income tax form 1040ez Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. Federal income tax form 1040ez Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. Federal income tax form 1040ez Acceptance of attorneys' fees. Federal income tax form 1040ez   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. Federal income tax form 1040ez Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. Federal income tax form 1040ez   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. Federal income tax form 1040ez All fee awards must be paid to the organization and not to its individual staff attorneys. Federal income tax form 1040ez Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. Federal income tax form 1040ez Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. Federal income tax form 1040ez   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. Federal income tax form 1040ez   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. Federal income tax form 1040ez Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. Federal income tax form 1040ez That the particular religious beliefs of the organization are truly and sincerely held. Federal income tax form 1040ez That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. Federal income tax form 1040ez Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. Federal income tax form 1040ez If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. Federal income tax form 1040ez Churches. Federal income tax form 1040ez   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. Federal income tax form 1040ez In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. Federal income tax form 1040ez   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. Federal income tax form 1040ez Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. Federal income tax form 1040ez The IRS considers the facts and circumstances of each organization applying for church status. Federal income tax form 1040ez Convention or association of churches. Federal income tax form 1040ez   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. Federal income tax form 1040ez Integrated auxiliaries. Federal income tax form 1040ez   An organization is an integrated auxiliary of a church if all the following are true. Federal income tax form 1040ez The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). Federal income tax form 1040ez It is affiliated with a church or a convention or association of churches. Federal income tax form 1040ez It is internally supported. Federal income tax form 1040ez An organization is internally supported unless both of the following are true. Federal income tax form 1040ez It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). Federal income tax form 1040ez It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. Federal income tax form 1040ez Special rule. Federal income tax form 1040ez   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. Federal income tax form 1040ez   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. Federal income tax form 1040ez   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. Federal income tax form 1040ez Scientific Organizations You must show that your organization's research will be carried on in the public interest. Federal income tax form 1040ez Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. Federal income tax form 1040ez Aiding in the scientific education of college or university students. Federal income tax form 1040ez Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th