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Online 1040ez Filing

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Online 1040ez Filing

Online 1040ez filing Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Online 1040ez filing S. Online 1040ez filing Taxpayer Identification NumbersUnexpected payment. Online 1040ez filing Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Online 1040ez filing Electronic reporting. Online 1040ez filing Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Online 1040ez filing S. Online 1040ez filing Real Property InterestForeign corporations. Online 1040ez filing Domestic corporations. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing real property holding corporations. Online 1040ez filing Partnerships. Online 1040ez filing Trusts and estates. Online 1040ez filing Domestically controlled QIE. Online 1040ez filing Late filing of certifications or notices. Online 1040ez filing Certifications. Online 1040ez filing Liability of agent or qualified substitute. Online 1040ez filing Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Online 1040ez filing Withholding of Tax In most cases, a foreign person is subject to U. Online 1040ez filing S. Online 1040ez filing tax on its U. Online 1040ez filing S. Online 1040ez filing source income. Online 1040ez filing Most types of U. Online 1040ez filing S. Online 1040ez filing source income received by a foreign person are subject to U. Online 1040ez filing S. Online 1040ez filing tax of 30%. Online 1040ez filing A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Online 1040ez filing The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Online 1040ez filing The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Online 1040ez filing In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Online 1040ez filing S. Online 1040ez filing source income. Online 1040ez filing Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Online 1040ez filing NRA withholding does not include withholding under section 1445 of the Code (see U. Online 1040ez filing S. Online 1040ez filing Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Online 1040ez filing A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Online 1040ez filing However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Online 1040ez filing S. Online 1040ez filing person is not required to withhold. Online 1040ez filing In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Online 1040ez filing Withholding Agent You are a withholding agent if you are a U. Online 1040ez filing S. Online 1040ez filing or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Online 1040ez filing A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Online 1040ez filing S. Online 1040ez filing branch of certain foreign banks and insurance companies. Online 1040ez filing You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Online 1040ez filing Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Online 1040ez filing In most cases, the U. Online 1040ez filing S. Online 1040ez filing person who pays an amount subject to NRA withholding is the person responsible for withholding. Online 1040ez filing However, other persons may be required to withhold. Online 1040ez filing For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Online 1040ez filing In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Online 1040ez filing Liability for tax. Online 1040ez filing   As a withholding agent, you are personally liable for any tax required to be withheld. Online 1040ez filing This liability is independent of the tax liability of the foreign person to whom the payment is made. Online 1040ez filing If you fail to withhold and the foreign payee fails to satisfy its U. Online 1040ez filing S. Online 1040ez filing tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Online 1040ez filing   The applicable tax will be collected only once. Online 1040ez filing If the foreign person satisfies its U. Online 1040ez filing S. Online 1040ez filing tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Online 1040ez filing Determination of amount to withhold. Online 1040ez filing   You must withhold on the gross amount subject to NRA withholding. Online 1040ez filing You cannot reduce the gross amount by any deductions. Online 1040ez filing However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Online 1040ez filing   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Online 1040ez filing In no case, however, should you withhold more than 30% of the total amount paid. Online 1040ez filing Or, you may make a reasonable estimate of the amount from U. Online 1040ez filing S. Online 1040ez filing sources and put a corresponding part of the amount due in escrow until the amount from U. Online 1040ez filing S. Online 1040ez filing sources can be determined, at which time withholding becomes due. Online 1040ez filing When to withhold. Online 1040ez filing   Withholding is required at the time you make a payment of an amount subject to withholding. Online 1040ez filing A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Online 1040ez filing A payment is considered made to a person if it is paid for that person's benefit. Online 1040ez filing For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Online 1040ez filing A payment also is considered made to a person if it is made to that person's agent. Online 1040ez filing   A U. Online 1040ez filing S. Online 1040ez filing partnership should withhold when any distributions that include amounts subject to withholding are made. Online 1040ez filing However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Online 1040ez filing S. Online 1040ez filing partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Online 1040ez filing If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Online 1040ez filing A U. Online 1040ez filing S. Online 1040ez filing trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Online 1040ez filing To the extent a U. Online 1040ez filing S. Online 1040ez filing trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Online 1040ez filing Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Online 1040ez filing (See Returns Required , later. Online 1040ez filing ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Online 1040ez filing Form 1099 reporting and backup withholding. Online 1040ez filing    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Online 1040ez filing S. Online 1040ez filing person. Online 1040ez filing You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Online 1040ez filing S. Online 1040ez filing person that is subject to Form 1099 reporting if any of the following apply. Online 1040ez filing The U. Online 1040ez filing S. Online 1040ez filing person has not provided its taxpayer identification number (TIN) in the manner required. Online 1040ez filing The IRS notifies you that the TIN furnished by the payee is incorrect. Online 1040ez filing There has been a notified payee underreporting. Online 1040ez filing There has been a payee certification failure. Online 1040ez filing In most cases, a TIN must be provided by a U. Online 1040ez filing S. Online 1040ez filing non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Online 1040ez filing A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Online 1040ez filing You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Online 1040ez filing S. Online 1040ez filing person. Online 1040ez filing For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Online 1040ez filing S. Online 1040ez filing person subject to Form 1099 reporting. Online 1040ez filing See Identifying the Payee , later, for more information. Online 1040ez filing Also see Section S. Online 1040ez filing Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Online 1040ez filing Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Online 1040ez filing Wages paid to employees. Online 1040ez filing   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Online 1040ez filing See Pay for Personal Services Performed , later. Online 1040ez filing Effectively connected income by partnerships. Online 1040ez filing   A withholding agent that is a partnership (whether U. Online 1040ez filing S. Online 1040ez filing or foreign) is also responsible for withholding on its income effectively connected with a U. Online 1040ez filing S. Online 1040ez filing trade or business that is allocable to foreign partners. Online 1040ez filing See Partnership Withholding on Effectively Connected Income , later, for more information. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing real property interest. Online 1040ez filing   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Online 1040ez filing S. Online 1040ez filing real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Online 1040ez filing S. Online 1040ez filing real property interest to a shareholder, partner, or beneficiary that is a foreign person. Online 1040ez filing See U. Online 1040ez filing S. Online 1040ez filing Real Property Interest , later. Online 1040ez filing Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Online 1040ez filing It does not apply to payments made to U. Online 1040ez filing S. Online 1040ez filing persons. Online 1040ez filing Usually, you determine the payee's status as a U. Online 1040ez filing S. Online 1040ez filing or foreign person based on the documentation that person provides. Online 1040ez filing See Documentation , later. Online 1040ez filing However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Online 1040ez filing Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Online 1040ez filing However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing agent of foreign person. Online 1040ez filing   If you make a payment to a U. Online 1040ez filing S. Online 1040ez filing person and you have actual knowledge that the U. Online 1040ez filing S. Online 1040ez filing person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Online 1040ez filing However, if the U. Online 1040ez filing S. Online 1040ez filing person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Online 1040ez filing   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Online 1040ez filing S. Online 1040ez filing person and not as a payment to a foreign person. Online 1040ez filing You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Online 1040ez filing Disregarded entities. Online 1040ez filing   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Online 1040ez filing The payee of a payment made to a disregarded entity is the owner of the entity. Online 1040ez filing   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Online 1040ez filing   If the owner is a U. Online 1040ez filing S. Online 1040ez filing person, you do not apply NRA withholding. Online 1040ez filing However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Online 1040ez filing You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Online 1040ez filing Flow-Through Entities The payees of payments (other than income effectively connected with a U. Online 1040ez filing S. Online 1040ez filing trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Online 1040ez filing This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Online 1040ez filing Income that is, or is deemed to be, effectively connected with the conduct of a U. Online 1040ez filing S. Online 1040ez filing trade or business of a flow-through entity is treated as paid to the entity. Online 1040ez filing All of the following are flow-through entities. Online 1040ez filing A foreign partnership (other than a withholding foreign partnership). Online 1040ez filing A foreign simple or foreign grantor trust (other than a withholding foreign trust). Online 1040ez filing A fiscally transparent entity receiving income for which treaty benefits are claimed. Online 1040ez filing See Fiscally transparent entity , later. Online 1040ez filing In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Online 1040ez filing You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Online 1040ez filing You must determine whether the owners or beneficiaries of a flow-through entity are U. Online 1040ez filing S. Online 1040ez filing or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Online 1040ez filing You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Online 1040ez filing If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Online 1040ez filing See Documentation and Presumption Rules , later. Online 1040ez filing Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Online 1040ez filing Foreign partnerships. Online 1040ez filing    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Online 1040ez filing If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Online 1040ez filing However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Online 1040ez filing If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Online 1040ez filing Example 1. Online 1040ez filing A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Online 1040ez filing S. Online 1040ez filing citizen. Online 1040ez filing You make a payment of U. Online 1040ez filing S. Online 1040ez filing source interest to the partnership. Online 1040ez filing It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Online 1040ez filing S. Online 1040ez filing citizen. Online 1040ez filing The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Online 1040ez filing You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Online 1040ez filing Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Online 1040ez filing Report the payment to the U. Online 1040ez filing S. Online 1040ez filing citizen on Form 1099-INT. Online 1040ez filing Example 2. Online 1040ez filing A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Online 1040ez filing The second partnership has two partners, both nonresident alien individuals. Online 1040ez filing You make a payment of U. Online 1040ez filing S. Online 1040ez filing source interest to the first partnership. Online 1040ez filing It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Online 1040ez filing In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Online 1040ez filing The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Online 1040ez filing Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Online 1040ez filing Example 3. Online 1040ez filing You make a payment of U. Online 1040ez filing S. Online 1040ez filing source dividends to a withholding foreign partnership. Online 1040ez filing The partnership has two partners, both foreign corporations. Online 1040ez filing You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Online 1040ez filing You must treat the partnership as the payee of the dividends. Online 1040ez filing Foreign simple and grantor trust. Online 1040ez filing   A trust is foreign unless it meets both of the following tests. Online 1040ez filing A court within the United States is able to exercise primary supervision over the administration of the trust. Online 1040ez filing One or more U. Online 1040ez filing S. Online 1040ez filing persons have the authority to control all substantial decisions of the trust. Online 1040ez filing   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Online 1040ez filing A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Online 1040ez filing   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Online 1040ez filing The payees of a payment made to a foreign grantor trust are the owners of the trust. Online 1040ez filing However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Online 1040ez filing If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Online 1040ez filing Example. Online 1040ez filing A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Online 1040ez filing S. Online 1040ez filing citizen. Online 1040ez filing You make a payment of interest to the foreign trust. Online 1040ez filing It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Online 1040ez filing S. Online 1040ez filing citizen. Online 1040ez filing The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Online 1040ez filing You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Online 1040ez filing Report the payment to the nonresident aliens on Forms 1042-S. Online 1040ez filing Report the payment to the U. Online 1040ez filing S. Online 1040ez filing citizen on Form 1099-INT. Online 1040ez filing Fiscally transparent entity. Online 1040ez filing   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Online 1040ez filing The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Online 1040ez filing ). Online 1040ez filing The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Online 1040ez filing An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Online 1040ez filing Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Online 1040ez filing   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Online 1040ez filing Example. Online 1040ez filing Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Online 1040ez filing A has two interest holders, B and C. Online 1040ez filing B is a corporation organized under the laws of country Y. Online 1040ez filing C is a corporation organized under the laws of country Z. Online 1040ez filing Both countries Y and Z have an income tax treaty in force with the United States. Online 1040ez filing A receives royalty income from U. Online 1040ez filing S. Online 1040ez filing sources that is not effectively connected with the conduct of a trade or business in the United States. Online 1040ez filing For U. Online 1040ez filing S. Online 1040ez filing income tax purposes, A is treated as a partnership. Online 1040ez filing Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Online 1040ez filing The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Online 1040ez filing Accordingly, A is fiscally transparent in its jurisdiction, country X. Online 1040ez filing B and C are not fiscally transparent under the laws of their respective countries of incorporation. Online 1040ez filing Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Online 1040ez filing Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Online 1040ez filing S. Online 1040ez filing source royalty income for purposes of the U. Online 1040ez filing S. Online 1040ez filing -Y income tax treaty. Online 1040ez filing Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Online 1040ez filing Therefore, A is not treated as fiscally transparent under the laws of country Z. Online 1040ez filing Accordingly, C is not treated as deriving its share of the U. Online 1040ez filing S. Online 1040ez filing source royalty income for purposes of the U. Online 1040ez filing S. Online 1040ez filing -Z income tax treaty. Online 1040ez filing Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Online 1040ez filing This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Online 1040ez filing You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Online 1040ez filing An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Online 1040ez filing A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Online 1040ez filing In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Online 1040ez filing You must determine whether the customers or account holders of a foreign intermediary are U. Online 1040ez filing S. Online 1040ez filing or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Online 1040ez filing You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Online 1040ez filing If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Online 1040ez filing See Documentation and Presumption Rules , later. Online 1040ez filing Nonqualified intermediary. Online 1040ez filing   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Online 1040ez filing The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Online 1040ez filing Example. Online 1040ez filing You make a payment of interest to a foreign bank that is a nonqualified intermediary. Online 1040ez filing The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Online 1040ez filing S. Online 1040ez filing person for whom the bank is collecting the payments. Online 1040ez filing The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Online 1040ez filing The account holders are the payees of the interest payment. Online 1040ez filing You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Online 1040ez filing S. Online 1040ez filing person on Form 1099-INT. Online 1040ez filing Qualified intermediary. Online 1040ez filing   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Online 1040ez filing S. Online 1040ez filing intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Online 1040ez filing You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Online 1040ez filing In this situation, the QI is required to withhold the tax. Online 1040ez filing You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Online 1040ez filing   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Online 1040ez filing If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Online 1040ez filing S. Online 1040ez filing person. Online 1040ez filing Branches of financial institutions. Online 1040ez filing   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Online 1040ez filing The countries with approved KYC rules are listed on IRS. Online 1040ez filing gov. Online 1040ez filing QI withholding agreement. Online 1040ez filing   Foreign financial institutions and foreign branches of U. Online 1040ez filing S. Online 1040ez filing financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Online 1040ez filing   A QI is entitled to certain simplified withholding and reporting rules. Online 1040ez filing In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Online 1040ez filing   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Online 1040ez filing These forms, and the procedures required to obtain a QI withholding agreement are available at www. Online 1040ez filing irs. Online 1040ez filing gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Online 1040ez filing Documentation. Online 1040ez filing   A QI is not required to forward documentation obtained from foreign account holders to the U. Online 1040ez filing S. Online 1040ez filing withholding agent from whom the QI receives a payment of U. Online 1040ez filing S. Online 1040ez filing source income. Online 1040ez filing The QI maintains such documentation at its location and provides the U. Online 1040ez filing S. Online 1040ez filing withholding agent with withholding rate pools. Online 1040ez filing A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Online 1040ez filing   A QI is required to provide the U. Online 1040ez filing S. Online 1040ez filing withholding agent with information regarding U. Online 1040ez filing S. Online 1040ez filing persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Online 1040ez filing   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Online 1040ez filing This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Online 1040ez filing Form 1042-S reporting. Online 1040ez filing   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Online 1040ez filing Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Online 1040ez filing Collective refund procedures. Online 1040ez filing   A QI may seek a refund on behalf of its direct account holders. Online 1040ez filing The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing branches of foreign banks and foreign insurance companies. Online 1040ez filing   Special rules apply to a U. Online 1040ez filing S. Online 1040ez filing branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Online 1040ez filing If you agree to treat the branch as a U. Online 1040ez filing S. Online 1040ez filing person, you may treat the branch as a U. Online 1040ez filing S. Online 1040ez filing payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Online 1040ez filing S. Online 1040ez filing branch on which the agreement is evidenced. Online 1040ez filing If you treat the branch as a U. Online 1040ez filing S. Online 1040ez filing payee, you are not required to withhold. Online 1040ez filing Even though you agree to treat the branch as a U. Online 1040ez filing S. Online 1040ez filing person, you must report the payment on Form 1042-S. Online 1040ez filing   A financial institution organized in a U. Online 1040ez filing S. Online 1040ez filing possession is treated as a U. Online 1040ez filing S. Online 1040ez filing branch. Online 1040ez filing The special rules discussed in this section apply to a possessions financial institution. Online 1040ez filing   If you are paying a U. Online 1040ez filing S. Online 1040ez filing branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Online 1040ez filing S. Online 1040ez filing person for amounts subject to NRA withholding. Online 1040ez filing Consequently, amounts not subject to NRA withholding that are paid to a U. Online 1040ez filing S. Online 1040ez filing branch are not subject to Form 1099 reporting or backup withholding. Online 1040ez filing   Alternatively, a U. Online 1040ez filing S. Online 1040ez filing branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Online 1040ez filing In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Online 1040ez filing See Nonqualified Intermediaries under  Documentation, later. Online 1040ez filing   If the U. Online 1040ez filing S. Online 1040ez filing branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Online 1040ez filing Withholding foreign partnership and foreign trust. Online 1040ez filing   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Online 1040ez filing A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Online 1040ez filing   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Online 1040ez filing A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Online 1040ez filing You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Online 1040ez filing WP and WT withholding agreements. Online 1040ez filing   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Online 1040ez filing Also see the following items. Online 1040ez filing Revenue Procedure 2004-21. Online 1040ez filing Revenue Procedure 2005-77. Online 1040ez filing Employer identification number (EIN). Online 1040ez filing   A completed Form SS-4 must be submitted with the application for being a WP or WT. Online 1040ez filing The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Online 1040ez filing Documentation. Online 1040ez filing   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Online 1040ez filing The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Online 1040ez filing The Form W-8IMY must contain the WP-EIN or WT-EIN. Online 1040ez filing Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Online 1040ez filing A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Online 1040ez filing S. Online 1040ez filing person. Online 1040ez filing It also includes a foreign branch of a U. Online 1040ez filing S. Online 1040ez filing financial institution if the foreign branch is a qualified intermediary. Online 1040ez filing In most cases, the U. Online 1040ez filing S. Online 1040ez filing branch of a foreign corporation or partnership is treated as a foreign person. Online 1040ez filing Nonresident alien. Online 1040ez filing   A nonresident alien is an individual who is not a U. Online 1040ez filing S. Online 1040ez filing citizen or a resident alien. Online 1040ez filing A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Online 1040ez filing Married to U. Online 1040ez filing S. Online 1040ez filing citizen or resident alien. Online 1040ez filing   Nonresident alien individuals married to U. Online 1040ez filing S. Online 1040ez filing citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Online 1040ez filing However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Online 1040ez filing Wages paid to these individuals are subject to graduated withholding. Online 1040ez filing See Wages Paid to Employees—Graduated Withholding . Online 1040ez filing Resident alien. Online 1040ez filing   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Online 1040ez filing Green card test. Online 1040ez filing An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Online 1040ez filing This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Online 1040ez filing Substantial presence test. Online 1040ez filing An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Online 1040ez filing Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Online 1040ez filing   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Online 1040ez filing This exception is for a limited period of time. Online 1040ez filing   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Online 1040ez filing Note. Online 1040ez filing   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Online 1040ez filing For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Online 1040ez filing Resident of a U. Online 1040ez filing S. Online 1040ez filing possession. Online 1040ez filing   A bona fide resident of Puerto Rico, the U. Online 1040ez filing S. Online 1040ez filing Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Online 1040ez filing S. Online 1040ez filing citizen or a U. Online 1040ez filing S. Online 1040ez filing national is treated as a nonresident alien for the withholding rules explained here. Online 1040ez filing A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Online 1040ez filing   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Online 1040ez filing S. Online 1040ez filing Possessions. Online 1040ez filing Foreign corporations. Online 1040ez filing   A foreign corporation is one that does not fit the definition of a domestic corporation. Online 1040ez filing A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Online 1040ez filing Guam or Northern Mariana Islands corporations. Online 1040ez filing   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Online 1040ez filing Note. Online 1040ez filing   The provisions discussed below under U. Online 1040ez filing S. Online 1040ez filing Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing Virgin Islands and American Samoa corporations. Online 1040ez filing   A corporation created or organized in, or under the laws of, the U. Online 1040ez filing S. Online 1040ez filing Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Online 1040ez filing S. Online 1040ez filing Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Online 1040ez filing S. Online 1040ez filing Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Online 1040ez filing Foreign private foundations. Online 1040ez filing   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Online 1040ez filing Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Online 1040ez filing Other foreign organizations, associations, and charitable institutions. Online 1040ez filing   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Online 1040ez filing In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Online 1040ez filing   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Online 1040ez filing   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing branches of foreign persons. Online 1040ez filing   In most cases, a payment to a U. Online 1040ez filing S. Online 1040ez filing branch of a foreign person is a payment made to the foreign person. Online 1040ez filing However, you may treat payments to U. Online 1040ez filing S. Online 1040ez filing branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Online 1040ez filing S. Online 1040ez filing regulatory supervision as payments made to a U. Online 1040ez filing S. Online 1040ez filing person, if you and the U. Online 1040ez filing S. Online 1040ez filing branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Online 1040ez filing For this purpose, a financial institution organized under the laws of a U. Online 1040ez filing S. Online 1040ez filing possession is treated as a U. Online 1040ez filing S. Online 1040ez filing branch. Online 1040ez filing Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Online 1040ez filing The payee is a U. Online 1040ez filing S. Online 1040ez filing person. Online 1040ez filing The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Online 1040ez filing In most cases, you must get the documentation before you make the payment. Online 1040ez filing The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Online 1040ez filing See Standards of Knowledge , later. Online 1040ez filing If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Online 1040ez filing For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Online 1040ez filing The specific types of documentation are discussed in this section. Online 1040ez filing However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Online 1040ez filing As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Online 1040ez filing Section 1446 withholding. Online 1040ez filing   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Online 1040ez filing In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Online 1040ez filing This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Online 1040ez filing Joint owners. Online 1040ez filing    If you make a payment to joint owners, you need to get documentation from each owner. Online 1040ez filing Form W-9. Online 1040ez filing   In most cases, you can treat the payee as a U. Online 1040ez filing S. Online 1040ez filing person if the payee gives you a Form W-9. Online 1040ez filing The Form W-9 can be used only by a U. Online 1040ez filing S. Online 1040ez filing person and must contain the payee's taxpayer identification number (TIN). Online 1040ez filing If there is more than one owner, you may treat the total amount as paid to a U. Online 1040ez filing S. Online 1040ez filing person if any one of the owners gives you a Form W-9. Online 1040ez filing See U. Online 1040ez filing S. Online 1040ez filing Taxpayer Identification Numbers , later. Online 1040ez filing U. Online 1040ez filing S. Online 1040ez filing persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Online 1040ez filing Form W-8. Online 1040ez filing   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Online 1040ez filing Until further notice, you can rely upon Forms W-8 that contain a P. Online 1040ez filing O. Online 1040ez filing box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Online 1040ez filing S. Online 1040ez filing person and that a street address is available. Online 1040ez filing You may rely on Forms W-8 for which there is a U. Online 1040ez filing S. Online 1040ez filing mailing address provided you received the form prior to December 31, 2001. Online 1040ez filing   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Online 1040ez filing You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Online 1040ez filing S. Online 1040ez filing possession. Online 1040ez filing Other documentation. Online 1040ez filing   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Online 1040ez filing The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Online 1040ez filing These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Online 1040ez filing Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Online 1040ez filing Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Online 1040ez filing   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Online 1040ez filing   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Online 1040ez filing For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Online 1040ez filing Claiming treaty benefits. Online 1040ez filing   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Online 1040ez filing S. Online 1040ez filing TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Online 1040ez filing   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Online 1040ez filing   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Online 1040ez filing See Fiscally transparent entity discussed earlier under Flow-Through Entities. Online 1040ez filing   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Online 1040ez filing For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Online 1040ez filing   The exemptions from, or reduced rates of, U. Online 1040ez filing S. Online 1040ez filing tax vary under each treaty. Online 1040ez filing You must check the provisions of the tax treaty that apply. Online 1040ez filing Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Online 1040ez filing   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Online 1040ez filing You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Online 1040ez filing Exceptions to TIN requirement. Online 1040ez filing   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Online 1040ez filing Income from marketable securities (discussed next). Online 1040ez filing Unexpected payments to an individual (discussed under U. Online 1040ez filing S. Online 1040ez filing Taxpayer Identification Numbers ). Online 1040ez filing Marketable securities. Online 1040ez filing   A Form W-8BEN provided to claim treaty benefits does not need a U. Online 1040ez filing S. Online 1040ez filing TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Online 1040ez filing For this purpose, income from a marketable security consists of the following items. Online 1040ez filing Dividends and interest from stocks and debt obligations that are actively traded. Online 1040ez filing Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Online 1040ez filing Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Online 1040ez filing Income related to loans of any of the above securities. Online 1040ez filing Offshore accounts. Online 1040ez filing   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Online 1040ez filing   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Online 1040ez filing However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Online 1040ez filing An offshore account is an account maintained at an office or branch of a U. Online 1040ez filing S. Online 1040ez filing or foreign bank or other financial institution at any location outside the United States. Online 1040ez filing   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Online 1040ez filing This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Online 1040ez filing In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Online 1040ez filing Documentary evidence. Online 1040ez filing   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Online 1040ez filing To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Online 1040ez filing Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Online 1040ez filing Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Online 1040ez filing In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Online 1040ez filing Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Online 1040ez filing   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Online 1040ez filing (See Effectively Connected Income , later. Online 1040ez filing )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Online 1040ez filing   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Online 1040ez filing S. Online 1040ez filing trade or business is subject to withholding under section 1446. Online 1040ez filing If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Online 1040ez filing    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Online 1040ez filing Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Online 1040ez filing   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Online 1040ez filing S. Online 1040ez filing possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Online 1040ez filing   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Online 1040ez filing   See Foreign Governments and Certain Other Foreign Organizations , later. Online 1040ez filing Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Online 1040ez filing The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Online 1040ez filing The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Online 1040ez filing Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Online 1040ez filing S. Online 1040ez filing Branches for United States Tax Withholding. Online 1040ez filing   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Online 1040ez filing S. Online 1040ez filing branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Online 1040ez filing S. Online 1040ez filing branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Online 1040ez filing S. Online 1040ez filing person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Online 1040ez filing For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Online 1040ez filing 1446-5. Online 1040ez filing Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Online 1040ez filing A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Online 1040ez filing The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Online 1040ez filing The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Online 1040ez filing Responsibilities. Online 1040ez filing   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Online 1040ez filing However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Online 1040ez filing Instead, it provides you with a withholding statement that contains withholding rate pool information. Online 1040ez filing A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Online 1040ez filing A qualified intermediary is required to provide you with information regarding U. Online 1040ez filing S. Online 1040ez filing persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Online 1040ez filing S. Online 1040ez filing person unless it has assumed Form 1099 reporting and backup withholding responsibility. Online 1040ez filing For the alternative procedure for providing rate pool information for U. Online 1040ez filing S. Online 1040ez filing non-exempt persons, see the Form W-8IMY instructions. Online 1040ez filing   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Online 1040ez filing   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Online 1040ez filing Primary responsibility not assumed. Online 1040ez filing   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Online 1040ez filing Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Online 1040ez filing S. Online 1040ez filing person subject to Form 1099 reporting and/or backup withholding. Online 1040ez filing The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Online 1040ez filing Primary NRA withholding responsibility assumed. Online 1040ez filing   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Online 1040ez filing S. Online 1040ez filing person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Online 1040ez filing The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Online 1040ez filing Primary NRA and Form 1099 responsibility assumed. Online 1040ez filing   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Online 1040ez filing It is not necessary to associate the payment with withholding rate pools. Online 1040ez filing Example. Online 1040ez filing You make a payment of dividends to a QI. Online 1040ez filing It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Online 1040ez filing S. Online 1040ez filing individual who provides it with a Form W-9. Online 1040ez filing Each customer is entitled to 20% of the dividend payment. Online 1040ez filing The QI does not assume any primary withholding responsibility. Online 1040ez filing The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Online 1040ez filing S. Online 1040ez filing individual. Online 1040ez filing You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Online 1040ez filing The part of the payment allocable to the U. Online 1040ez filing S. Online 1040ez filing individual (20%) is reportable on Form 1099-DIV. Online 1040ez filing Smaller partnerships and trusts. Online 1040ez filing   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Online 1040ez filing It is a foreign partnership or foreign simple or grantor trust. Online 1040ez filing It is a direct account holder of the QI. Online 1040ez filing It does not have any partner, beneficiary, or owner that is a U. Online 1040ez filing S. Online 1040ez filing person or a pass- through partner, beneficiary, or owner. Online 1040ez filing   For information on these rules, see section 4A. Online 1040ez filing 01 of the QI agreement. Online 1040ez filing This is found in Appendix 3 of Revenue Procedure 2003-64. Online 1040ez filing Also see Revenue Procedure 2004-21. Online 1040ez filing Related partnerships and trusts. Online 1040ez filing    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Online 1040ez filing It is a foreign partnership or foreign simple or grantor trust. Online 1040ez filing It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Online 1040ez filing For information on these rules, see section 4A. Online 1040ez filing 02 of the QI agreement. Online 1040ez filing This is found in Appendix 3 of Revenue Procedure 2003-64. Online 1040ez filing Also see Revenue Procedure 2005-77. Online 1040ez filing Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Online 1040ez filing S. Online 1040ez filing branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Online 1040ez filing S. Online 1040ez filing branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Online 1040ez filing The NQI, flow-through entity, or U. Online 1040ez filing S. Online 1040ez filing branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Online 1040ez filing A withholding statement must be updated to keep the information accurate prior to each payment. Online 1040ez filing Withholding statement. Online 1040ez filing   In most cases, a withholding statement must contain the following information. Online 1040ez filing The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Online 1040ez filing The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Online 1040ez filing The status of the person for whom the documentation has been provided, such as whether the person is a U. Online 1040ez filing S. Online 1040ez filing exempt recipient (U. Online 1040ez filing S. Online 1040ez filing person exempt from Form 1099 reporting), U. Online 1040ez filing S. Online 1040ez filing non-exempt recipient (U. Online 1040ez filing S. Online 1040ez filing person subject to Form 1099 reporting), or a foreign person. Online 1040ez filing For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Online 1040ez filing S. Online 1040ez filing branch. Online 1040ez filing The type of recipient the person is, based on the recipient codes used on Form 1042-S. Online 1040ez filing Information allocating each payment, by income type, to each payee (including U. Online 1040ez filing S. Online 1040ez filing exempt and U. Online 1040ez filing S. Online 1040ez filing non-exempt recipients) for whom documentation has been provided. Online 1040ez filing The rate of withholding that applies to each foreign person to whom a payment is allocated. Online 1040ez filing A foreign payee's country of residence. Online 1040ez filing If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Online 1040ez filing ). Online 1040ez filing In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Online 1040ez filing The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Online 1040ez filing S. Online 1040ez filing branch from which the payee will directly receive a payment. Online 1040ez filing Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Online 1040ez filing Alternative procedure. Online 1040ez filing   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Online 1040ez filing S. Online 1040ez filing exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Online 1040ez filing To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Online 1040ez filing You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Online 1040ez filing    This alternative procedure cannot be used for payments to U. Online 1040ez filing S. Online 1040ez filing non-exempt recipients. Online 1040ez filing Therefore, an NQI must always provide you with allocation information for all U. Online 1040ez filing S. Online 1040ez filing non-exempt recipients prior to a payment being made. Online 1040ez filing Pooled withholding information. Online 1040ez filing   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Online 1040ez filing A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Online 1040ez filing For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Online 1040ez filing The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Online 1040ez filing Failure to provide allocation information. Online 1040ez filing   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Online 1040ez filing You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Online 1040ez filing An NQI is deemed to have f
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The Online 1040ez Filing

Online 1040ez filing Publication 557 - Additional Material Table of Contents Appendix. Online 1040ez filing Sample Articles of Organization, continued Organization Reference Chart Section of 1986 Code Description of organization General nature of activities Application  Form Annual return required to be  filed Contributions  allowable 501(c)(1) Corporations Organized under Act of Congress (including Federal Credit Unions) Instrumentalities of the  United States No Form None Yes, if made for exclusively public purposes 501(c)(2) Title Holding Corporation For Exempt Organization Holding title to property of an  exempt organization 1024 9901 or 990-EZ8 No2 501(c)(3) Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations Activities of nature implied by description of class of organization 1023 9901 or 990-EZ8, or 990-PF Yes, generally 501(c)(4) Civic Leagues, Social Welfare Organizations, and Local Associations of Employees Promotion of community welfare; charitable, educational, or recreational 1024 9901 or 990-EZ8 No, generally 2, 3 501(c)(5) Labor, Agricultural, and Horticultural Organizations Educational or instructive, the  purpose being to improve conditions of work, and to improve products of efficiency 1024 9901 or 990-EZ8 No2 501(c)(6) Business Leagues, Chambers of Commerce, Real Estate Boards, etc. Online 1040ez filing Improvement of business  conditions of one or more lines of business 1024 9901 or 990-EZ8 No2 501(c)(7) Social and Recreational Clubs Pleasure, recreation, social activities 1024 9901 or 990-EZ8 No2 501(c)(8) Fraternal Beneficiary Societies  and Associations Lodge providing for payment of life, sickness, accident or other benefits  to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. Online 1040ez filing 501(c)(3) purposes 501(c)(9) Voluntary Employees Beneficiary Associations Providing for payment of life, sickness, accident, or other benefits to members 1024 9901 or 990-EZ8 No2 501(c)(10) Domestic Fraternal Societies  and Associations Lodge devoting its net earnings to charitable, fraternal, and other  specified purposes. Online 1040ez filing No life, sickness, or accident benefits to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. Online 1040ez filing 501(c)(3) purposes 501(c)(11) Teachers' Retirement Fund Associations Teachers' association for payment of retirement benefits Letter6 9901 or 990-EZ8 No2 501(c)(12) Benevolent Life Insurance Associations, Mutual Ditch or  Irrigation Companies, Mutual or Cooperative Telephone Companies, etc. Online 1040ez filing Activities of a mutually beneficial  nature similar to those implied by the description of class of organization 1024 9901 or 990-EZ8 No2 501(c)(13) Cemetery Companies Burials and incidental activities 1024 9901 or 990-EZ8 Yes, generally 501(c)(14) State-Chartered Credit Unions,  Mutual Reserve Funds Loans to members Letter6 9901 or 990-EZ8 No2 501(c)(15) Mutual Insurance Companies or Associations Providing insurance to members substantially at cost 1024 9901 or 990-EZ8 No2 501(c)(16) Cooperative Organizations to  Finance Crop Operations Financing crop operations in  conjunction with activities of a marketing  or purchasing association Form 1120-C6 9901 or 990-EZ8 No2 501(c)(17) Supplemental Unemployment  Benefit Trusts Provides for payment of  supplemental unemployment compensation benefits 1024 9901 or 990-EZ8 No2 501(c)(18) Employee Funded Pension Trust (created before June 25, 1959) Payment of benefits under a  pension plan funded by employees Letter6 9901 or 990-EZ8 No2 501(c)(19) Post or Organization of Past or  Present Members of the Armed Forces Activities implied by nature of organization 1024 9901 or 990-EZ8 No, generally7 501(c)(21) Black Lung Benefit Trusts Funded by coal mine operators to satisfy their liability for disability or  death due to black lung diseases Letter6 990-BL No4 501(c)(22) Withdrawal Liability Payment Fund To provide funds to meet the  liability of employers withdrawing from  a multi-employer pension fund Letter6 9901 or 990-EZ8 No5 501(c)(23) Veterans' Organization (created before 1880) To provide insurance and other  benefits to veterans Letter6 9901 or 990-EZ8 No, generally7 501(c)(25) Title Holding Corporations or Trusts with Multiple Parent Corporations Holding title and paying over  income from property to 35 or fewer parents or beneficiaries 1024 9901 or 990-EZ8 No 501(c)(26) State-Sponsored Organization Providing Health Coverage for High-Risk Individuals Provides health care coverage to high-risk individuals Letter6 9901 or 990-EZ8 No 501(c)(27) State-Sponsored Workers' Compensation Reinsurance Organization Reimburses members for losses  under workers' compensation acts Letter6 9901 or 990-EZ8 No 501(c)(28) National Railroad Retirement Investment Trust Manages and invests the assets of the Railroad Retirement Account No Form 99011 No11 501(c)(29) CO-OP health insurance issuers A qualified health insurance issuer which has received a loan or grant under the CO-OP program Letter and Form 871814 9901 No13 501(d) Religious and Apostolic Associations Regular business activities;  Communal religious community No Form 10659 No2 501(e) Cooperative Hospital Service Organizations Performs cooperative services for hospitals 1023 9901 or 990-EZ8 Yes 501(f) Cooperative Service Organizations  of Operating Educational Organizations Performs collective investment  services for educational organizations 1023 9901 or 990-EZ8 Yes 501(k) Child Care Organizations Provides care for children 1023 9901 or 990-EZ8 Yes 501(n) Charitable Risk Pools Pools certain insurance risks of sec. Online 1040ez filing 501(c)(3) organizations 1023 9901 or 990-EZ8 Yes 501(q) Credit Counseling Organization Credit counseling services 1023 102312 No 521(a) Farmers' Cooperative Associations Cooperative marketing and  purchasing for agricultural procedures 1028 1120-C No 527 Political organizations A party, committee, fund,  association, etc. Online 1040ez filing , that directly or indirectly accepts contributions or makes expenditures for political campaigns 8871 1120-POL10 9901 or 990-EZ8 No 1For exceptions to the filing requirement, see chapter 2 and the form instructions. Online 1040ez filing Note: For annual tax periods beginning after 2006, most tax-exempt organizations, other than churches, are required to file an annual Form 990, 990-EZ, or 990-PF with the IRS or to submit an annual electronic notice, Form 990-N (e-Postcard), to the IRS. Online 1040ez filing Tax-exempt organizations failing to file an annual return or submit an annual notice as required for 3 consecutive years will automatically lose their tax-exempt status. Online 1040ez filing    2An organization exempt under a subsection of section 501 other than 501(c)(3) can establish a charitable fund, contributions to which are deductible. Online 1040ez filing Such a fund must itself meet the requirements of section 501(c)(3) and the related notice requirements of section 508(a). Online 1040ez filing    3Contributions to volunteer fire companies and similar organizations are deductible, but only if made for exclusively public purposes. Online 1040ez filing    4Deductible as a business expense to the extent allowed by section 192. Online 1040ez filing    5Deductible as a business expense to the extent allowed by section 194A. Online 1040ez filing 6Application is by letter to the address shown on Form 8718. Online 1040ez filing A copy of the organizing document should be attached and the letter should be signed by an officer. Online 1040ez filing    7Contributions to these organizations are deductible only if 90% or more of the organization's members are war veterans. Online 1040ez filing    8For limits on the use of Form 990-EZ, see chapter 2 and the general instructions for Form 990-EZ (or Form 990). Online 1040ez filing    9Although the organization files a partnership return, all distributions are deemed dividends. Online 1040ez filing The members are not entitled to pass through treatment of the organization's income or expenses. Online 1040ez filing    10Form 1120-POL is required only if the organization has taxable income as defined in section 527(c). Online 1040ez filing    11Only required to annually file so much of the Form 990 that relates to the names and addresses of the officers, directors, trustees, and key employees, and their titles, compensation, and hours devoted to their positions (Part VII of Form 990), and to complete Item I in the Heading of Form 990 to confirm its tax-exempt status under section 501(c)(28). Online 1040ez filing    12See section 501(q) if the organization provides credit counseling services and seeks recognition of exemption under section 501(c)(4). Online 1040ez filing Use Form 1024 if applying for recognition under section 501(c)(4). Online 1040ez filing    13See section 501(c)(29) for details. Online 1040ez filing    14See Revenue Procedure 2012-11, sec. Online 1040ez filing 4. Online 1040ez filing 01, 2012-7 I. Online 1040ez filing R. Online 1040ez filing B. Online 1040ez filing 368, for details. Online 1040ez filing Appendix. Online 1040ez filing Sample Articles of Organization The following are examples of Articles of Incorporation (Draft A) and a declaration of trust (Draft B) that contain the required information as to purposes and powers of an organization and disposition of its assets upon dissolution. Online 1040ez filing You should bear in mind that requirements for these instruments may vary under applicable state law. Online 1040ez filing See Private Foundations and Public Charities , earlier for the special provisions required in a private foundation's governing instrument in order for it to qualify for exemption. Online 1040ez filing DRAFT A  Articles of Incorporation of the undersigned, a majority of whom are citizens of the United States, desiring to form a Non-Profit Corporation under the Non-Profit Corporation Law of , do hereby certify: First: The name of the Corporation shall be . Online 1040ez filing Second: The place in this state where the principal office of the Corporation is to be located is the City of , County. Online 1040ez filing Third: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Online 1040ez filing Fourth: The names and addresses of the persons who are the initial trustees of the corporation are as follows: Name , Address Fifth: No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. Online 1040ez filing No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Online 1040ez filing Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Online 1040ez filing   If reference to federal law in articles of incorporation imposes a limitation that is invalid in your state, you may wish to substitute the following for the last sentence of the preceding paragraph: “Notwithstanding any other provision of these articles, this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes of this corporation. Online 1040ez filing ” Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Online 1040ez filing Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes. Online 1040ez filing   In witness whereof, we have hereunto subscribed our names this day of , 20. Online 1040ez filing Appendix. Online 1040ez filing Sample Articles of Organization, continued Draft B The Charitable Trust. Online 1040ez filing Declaration of Trust made as of the day of , 20 , by , of , and , of , who hereby declare and agree that they have received this day from , as Donor, the sum of Ten Dollars ($10) and that they will hold and manage the same, and any additions to it, in trust, as follows: First: This trust shall be called “The Charitable Trust. Online 1040ez filing ” Second: The trustees may receive and accept property, whether real, personal, or mixed, by way of gift, bequest, or devise, from any person, firm, trust, or corporation, to be held, administered, and disposed of in accordance with and pursuant to the provisions of this Declaration of Trust; but no gift, bequest, or devise of any such property shall be received and accepted if it is conditioned or limited in such manner as to require the disposition of the income or its principal to any person or organization other than a “charitable organization” or for other than “charitable purposes” within the meaning of such terms as defined in Article Third of this Declaration of Trust, or as shall, in the opinion of the trustees, jeopardize the federal income tax exemption of this trust pursuant to section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Online 1040ez filing Third: a) The principal and income of all property received and accepted by the trustees to be administered under this Declaration of Trust shall be held in trust by them, and the trustees may make payments or distributions from income or principal, or both, to or for the use of such charitable organizations, within the meaning of that term as defined in paragraph C, in such amounts and for such charitable purposes of the trust as the trustees shall from time to time select and determine; and the trustees may make payments or distributions from income or principal, or both, directly for such charitable purposes, within the meaning of that term as defined in paragraph D, in such amounts as the trustees shall from time to time select and determine without making use of any other charitable organization. Online 1040ez filing The trustees may also make payments or distributions of all or any part of the income or principal to states, territories, or possessions of the United States, any political subdivision of any of the foregoing, or to the United States or the District of Columbia but only for charitable purposes within the meaning of that term as defined in paragraph D. Online 1040ez filing Income or principal derived from contributions by corporations shall be distributed by the trustees for use solely within the United States or its possessions. Online 1040ez filing No part of the net earnings of this trust shall inure or be payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of this trust shall be the carrying on of propaganda, or otherwise attempting to influence legislation. Online 1040ez filing No part of the activities of this trust shall be the participation in, or intervention in (including the publishing or distributing of statements), any political campaign on behalf of or in opposition to any candidate for public office. Online 1040ez filing b) The trust shall continue forever unless the trustees terminate it and distribute all of the principal and income, which action may be taken by the trustees in their discretion at any time. Online 1040ez filing On such termination, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Online 1040ez filing The donor authorizes and empowers the trustees to form and organize a nonprofit corporation limited to the uses and purposes provided for in this Declaration of Trust, such corporation to be organized under the laws of any state or under the laws of the United States as may be determined by the trustees; such corporation when organized to have power to administer and control the affairs and property and to carry out the uses, objects, and purposes of this trust. Online 1040ez filing Upon the creation and organization of such corporation, the trustees are authorized and empowered to convey, transfer, and deliver to such corporation all the property and assets to which this trust may be or become entitled. Online 1040ez filing The charter, bylaws, and other provisions for the organization and management of such corporation and its affairs and property shall be such as the trustees shall determine, consistent with the provisions of this paragraph. Online 1040ez filing c) In this Declaration of Trust and in any amendments to it, references to “charitable organizations” or “charitable organization” mean corporations, trusts, funds, foundations, or community chests created or organized in the United States or in any of its possessions, whether under the laws of the United States, any state or territory, the District of Columbia, or any possession of the United States, organized and operated exclusively for charitable purposes, no part of the net earnings of which inures or is payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which do not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of or in opposition to any candidate for public office. Online 1040ez filing It is intended that the organization described in this paragraph C shall be entitled to exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Online 1040ez filing d) In this Declaration of Trust and in any amendments to it, the term “charitable purposes” shall be limited to and shall include only religious, charitable, scientific, literary, or educational purposes within the meaning of those terms as used in section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, but only such purposes as also constitute public charitable purposes under the law of trusts of the State of. Online 1040ez filing Fourth: This Declaration of Trust may be amended at any time or times by written instrument or instruments signed and sealed by the trustees, and acknowledged by any of the trustees, provided that no amendment shall authorize the trustees to conduct the affairs of this trust in any manner or for any purpose contrary to the provisions of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Online 1040ez filing An amendment of the provisions of this Article Fourth (or any amendment to it) shall be valid only if and to the extent that such amendment further restricts the trustees' amending power. Online 1040ez filing All instruments amending this Declaration of Trust shall be noted upon or kept attached to the executed original of this Declaration of Trust held by the trustees. Online 1040ez filing Fifth: Any trustee under this Declaration of Trust may, by written instrument, signed and acknowledged, resign his office. Online 1040ez filing The number of trustees shall be at all times not less than two, and whenever for any reason the number is reduced to one, there shall be, and at any other time there may be, appointed one or more additional trustees. Online 1040ez filing Appointments shall be made by the trustee or trustees for the time in office by written instruments signed and acknowledged. Online 1040ez filing Any succeeding or additional trustee shall, upon his or her acceptance of the office by written instrument signed and acknowledged, have the same powers, rights, and duties, and the same title to the trust estate jointly with the surviving or remaining trustee or trustees as if originally appointed. Online 1040ez filing  None of the trustees shall be required to furnish any bond or surety. Online 1040ez filing None of them shall be responsible or liable for the acts or omissions of any other of the trustees or of any predecessor or of a custodian, agent, depositary, or counsel selected with reasonable care. Online 1040ez filing  The one or more trustees, whether original or successor, for the time being in office, shall have full authority to act even though one or more vacancies may exist. Online 1040ez filing A trustee may, by appropriate written instrument, delegate all or any part of his or her powers to another or others of the trustees for such periods and subject to such conditions as such delegating trustee may determine. Online 1040ez filing  The trustees serving under this Declaration of Trust are authorized to pay to themselves amounts for reasonable expenses incurred and reasonable compensation for services rendered in the administration of this trust, but in no event shall any trustee who has made a contribution to this trust ever receive any compensation thereafter. Online 1040ez filing Sixth: In extension and not in limitation of the common law and statutory powers of trustees and other powers granted in this Declaration of Trust, the trustees shall have the following discretionary powers. Online 1040ez filing a) To invest and reinvest the principal and income of the trust in such property, real, personal, or mixed, and in such manner as they shall deem proper, and from time to time to change investments as they shall deem advisable; to invest in or retain any stocks, shares, bonds, notes, obligations, or personal or real property (including without limitation any interests in or obligations of any corporation, association, business trust, investment trust, common trust fund, or investment company) although some or all of the property so acquired or retained is of a kind or size which but for this express authority would not be considered proper and although all of the trust funds are invested in the securities of one company. Online 1040ez filing No principal or income, however, shall be loaned, directly or indirectly, to any trustee or to anyone else, corporate or otherwise, who has at any time made a contribution to this trust, nor to anyone except on the basis of an adequate interest charge and with adequate security. Online 1040ez filing b) To sell, lease, or exchange any personal, mixed, or real property, at public auction or by private contract, for such consideration and on such terms as to credit or otherwise, and to make such contracts and enter into such undertakings relating to the trust property, as they consider advisable, whether or not such leases or contracts may extend beyond the duration of the trust. Online 1040ez filing c) To borrow money for such periods, at such rates of interest, and upon such terms as the trustees consider advisable, and as security for such loans to mortgage or pledge any real or personal property with or without power of sale; to acquire or hold any real or personal property, subject to any mortgage or pledge on or of property acquired or held by this trust. Online 1040ez filing d) To execute and deliver deeds, assignments, transfers, mortgages, pledges, leases, covenants, contracts, promissory notes, releases, and other instruments, sealed or unsealed, incident to any transaction in which they engage. Online 1040ez filing e) To vote, to give proxies, to participate in the reorganization, merger, or consolidation of any concern, or in the sale, lease, disposition, or distribution of its assets; to join with other security holders in acting through a committee, depositary, voting trustees, or otherwise, and in this connection to delegate authority to such committee, depositary, or trustees and to deposit securities with them or transfer securities to them; to pay assessments levied on securities or to exercise subscription rights in respect of securities. Online 1040ez filing f) To employ a bank or trust company as custodian of any funds or securities and to delegate to it such powers as they deem appropriate; to hold trust property without indication of fiduciary capacity but only in the name of a registered nominee, provided the trust property is at all times identified as such on the books of the trust; to keep any or all of the trust property or funds in any place or places in the United States of America; to employ clerks, accountants, investment counsel, investment agents, and any special services, and to pay the reasonable compensation and expenses of all such services in addition to the compensation of the trustees. Online 1040ez filing Seventh: The trustees' powers are exercisable solely in the fiduciary capacity consistent with and in furtherance of the charitable purposes of this trust as specified in Article Third and not otherwise. Online 1040ez filing Eighth: In this Declaration of Trust and in any amendment to it, references to “trustees” mean the one or more trustees, whether original or successor, for the time being in office. Online 1040ez filing Ninth: Any person may rely on a copy, certified by a notary public, of the executed original of this Declaration of Trust held by the trustees, and of any of the notations on it and writings attached to it, as fully as he might rely on the original documents themselves. Online 1040ez filing Any such person may rely fully on any statements of fact certified by anyone who appears from such original documents or from such certified copy to be a trustee under this Declaration of Trust. Online 1040ez filing No one dealing with the trustees need inquire concerning the validity of anything the trustees purport to do. Online 1040ez filing No one dealing with the trustees need see to the application of anything paid or transferred to or upon the order of the trustees of the trust. Online 1040ez filing Tenth: This Declaration of Trust is to be governed in all respects by the laws of the State of . Online 1040ez filing Trustee Trustee Prev  Up  Next   Home   More Online Publications