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Senior Taxes

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Senior Taxes

Senior taxes 3. Senior taxes   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. Senior taxes Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. Senior taxes Certain contracts held by a charitable remainder trust. Senior taxes Excise Taxes. Senior taxes Indoor tanning services. Senior taxes Application for Recognition of ExemptionPolitical activity. Senior taxes Private delivery service. Senior taxes Amendments to organizing documents required. Senior taxes How to show reasonable action and good faith. Senior taxes Not acting reasonably and in good faith. Senior taxes Prejudicing the interest of the Government. Senior taxes Procedure for requesting extension. Senior taxes More information. Senior taxes Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. Senior taxes Grass roots expenditures. Senior taxes Lobbying nontaxable amount. Senior taxes Grass roots nontaxable amount. Senior taxes Organization that no longer qualifies. Senior taxes Tax on organization. Senior taxes Tax on managers. Senior taxes Taxes on organizations. Senior taxes Taxes on managers. Senior taxes Political expenditures. Senior taxes Correction of expenditure. Senior taxes Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. Senior taxes Religious. Senior taxes Charitable. Senior taxes Scientific. Senior taxes Testing for public safety. Senior taxes Literary. Senior taxes Educational. Senior taxes Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). Senior taxes The prevention of cruelty to children or animals. Senior taxes To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. Senior taxes A trust is a fund or foundation and will qualify. Senior taxes However, an individual or a partnership will not qualify. Senior taxes Examples. Senior taxes   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. Senior taxes Child care organizations. Senior taxes   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. Senior taxes Instrumentalities. Senior taxes   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). Senior taxes Examples of a qualifying instrumentality might include state schools, universities, or hospitals. Senior taxes However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. Senior taxes A state or municipality itself does not qualify for exemption. Senior taxes Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. Senior taxes Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. Senior taxes Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. Senior taxes Fundraising events. Senior taxes   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. Senior taxes This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. Senior taxes   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. Senior taxes If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. Senior taxes You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. Senior taxes See Disclosure of Quid Pro Quo Contributions in chapter 2. Senior taxes Exemption application not filed. Senior taxes   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. Senior taxes Separate fund—contributions that are deductible. Senior taxes   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. Senior taxes   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. Senior taxes A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. Senior taxes Personal benefit contracts. Senior taxes   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. Senior taxes   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. Senior taxes Certain annuity contracts. Senior taxes   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). Senior taxes Certain contracts held by a charitable remainder trust. Senior taxes   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. Senior taxes Excise tax. Senior taxes   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. Senior taxes The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. Senior taxes Excise Taxes. Senior taxes   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. Senior taxes Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. Senior taxes Indoor tanning services. Senior taxes   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. Senior taxes For more information, go to IRS. Senior taxes gov and select Affordable Care Act Tax Provisions. Senior taxes Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. Senior taxes For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. Senior taxes See the organization headings that follow for specific information your organization may need to provide. Senior taxes Form 1023. Senior taxes   Your organization must file its application for recognition of exemption on Form 1023. Senior taxes See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. Senior taxes Some organizations are not required to file Form 1023. Senior taxes See Organizations Not Required To File Form 1023, later. Senior taxes    Additional information to help you complete your application can be found online. Senior taxes Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. Senior taxes See Exemption Requirements - Section 501(c)(3) Organizations. Senior taxes   Form 1023 and accompanying statements must show that all of the following are true. Senior taxes The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. Senior taxes ) specified in the introduction to this chapter. Senior taxes No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. Senior taxes You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. Senior taxes The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. Senior taxes See Political activity, next, and Lobbying Expenditures , near the end of this chapter. Senior taxes Political activity. Senior taxes   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). Senior taxes Such participation or intervention includes the publishing or distributing of statements. Senior taxes   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Senior taxes Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. Senior taxes Effective date of exemption. Senior taxes   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. Senior taxes These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. Senior taxes If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. Senior taxes Otherwise, exemption will be recognized only from the date of receipt. Senior taxes The date of receipt is the date of the U. Senior taxes S. Senior taxes postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. Senior taxes Private delivery service. Senior taxes   If a private delivery service designated by the IRS, rather than the U. Senior taxes S. Senior taxes Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. Senior taxes The following private delivery services have been designated by the IRS. Senior taxes DHL Express (DHL): DHL “Same Day” Service. Senior taxes Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Senior taxes United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Senior taxes M. Senior taxes , UPS Worldwide Express Plus, and UPS Worldwide Express. Senior taxes Amendments to organizing documents required. Senior taxes   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. Senior taxes If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. Senior taxes Extensions of time for filing. Senior taxes   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. Senior taxes Automatic 12-month extension. Senior taxes Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. Senior taxes To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. Senior taxes 9100-2. Senior taxes ” Discretionary extensions. Senior taxes An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. Senior taxes How to show reasonable action and good faith. Senior taxes   An organization acted reasonably and showed good faith if at least one of the following is true. Senior taxes The organization requests relief before its failure to file is discovered by the IRS. Senior taxes The organization failed to file because of intervening events beyond its control. Senior taxes The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. Senior taxes The organization reasonably relied upon the written advice of the IRS. Senior taxes The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. Senior taxes An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. Senior taxes Not acting reasonably and in good faith. Senior taxes   An organization has not acted reasonably and in good faith under the following circumstances. Senior taxes It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. Senior taxes It was informed of the requirement to file and related tax consequences, but chose not to file. Senior taxes It uses hindsight in requesting relief. Senior taxes The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. Senior taxes Prejudicing the interest of the Government. Senior taxes   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. Senior taxes Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. Senior taxes The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. Senior taxes The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. Senior taxes Procedure for requesting extension. Senior taxes   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. Senior taxes A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. Senior taxes Any documents relevant to the application. Senior taxes An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. Senior taxes If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. Senior taxes This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Senior taxes ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. Senior taxes This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. Senior taxes The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. Senior taxes These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Senior taxes ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. Senior taxes The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. Senior taxes The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. Senior taxes   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. Senior taxes Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. Senior taxes More information. Senior taxes   For more information about these procedures, see Regulations sections 301. Senior taxes 9100-1, 301. Senior taxes 9100-2, 301. Senior taxes 9100-3, Revenue Procedure 2013-4, section 6. Senior taxes 04, 2013-1 I. Senior taxes R. Senior taxes B. Senior taxes 126, and Revenue Procedure 2013-8, 2013-1 I. Senior taxes R. Senior taxes B. Senior taxes 237. Senior taxes See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. Senior taxes Notification from the IRS. Senior taxes   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. Senior taxes Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. Senior taxes These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. Senior taxes Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). Senior taxes These organizations are exempt automatically if they meet the requirements of section 501(c)(3). Senior taxes Filing Form 1023 to establish exemption. Senior taxes   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. Senior taxes By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. Senior taxes A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. Senior taxes Private foundations. Senior taxes   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. Senior taxes Gross receipts test. Senior taxes   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. Senior taxes   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. Senior taxes For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. Senior taxes The organization must file Form 1023 within 90 days after the end of its second tax year. Senior taxes   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. Senior taxes However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. Senior taxes Example. Senior taxes   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. Senior taxes It was incorporated on January 1, 2009, and files returns on a calendar-year basis. Senior taxes It did not file a Form 1023. Senior taxes The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. Senior taxes Therefore, it did not have to file Form 1023 and is exempt for those years. Senior taxes However, for 2010, 2011, and 2012 the total gross receipts were $15,900. Senior taxes Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. Senior taxes If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. Senior taxes The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. Senior taxes   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. Senior taxes See the procedures for this extension discussed earlier. Senior taxes Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. Senior taxes This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. Senior taxes Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. Senior taxes These conditions for exemption are referred to as the organizational test. Senior taxes Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. Senior taxes Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). Senior taxes The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. Senior taxes Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. Senior taxes Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. Senior taxes In interpreting an organization's articles, the law of the state where the organization was created is controlling. Senior taxes If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. Senior taxes The following are examples illustrating the organizational test. Senior taxes Example 1. Senior taxes Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). Senior taxes These articles appropriately limit the organization's purposes. Senior taxes The organization meets the organizational test. Senior taxes Example 2. Senior taxes An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. Senior taxes The organization will not be properly limited as to its purposes since all research is not scientific. Senior taxes The organization does not meet the organizational test. Senior taxes Example 3. Senior taxes An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). Senior taxes The organization meets the organizational test. Senior taxes Example 4. Senior taxes If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. Senior taxes Example 5. Senior taxes If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. Senior taxes On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. Senior taxes Example 6. Senior taxes If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. Senior taxes Such purposes are vague and may be accomplished other than in an exempt manner. Senior taxes Example 7. Senior taxes A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. Senior taxes A hospital may or may not be exempt depending on the manner in which it is operated. Senior taxes Example 8. Senior taxes An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. Senior taxes Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. Senior taxes This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. Senior taxes If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. Senior taxes Dedication. Senior taxes   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. Senior taxes Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. Senior taxes Distribution. Senior taxes   Revenue Procedure 82-2, 1982-1 C. Senior taxes B. Senior taxes 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. Senior taxes The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. Senior taxes   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. Senior taxes Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. Senior taxes Sample articles of organization. Senior taxes   See sample articles of organization in the Appendix in the back of this publication. Senior taxes Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. Senior taxes In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. Senior taxes You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. Senior taxes If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. Senior taxes See also Private Schools , discussed later. Senior taxes Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. Senior taxes Advocacy of a position. Senior taxes   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. Senior taxes The mere presentation of unsupported opinion is not educational. Senior taxes Method not educational. Senior taxes   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). Senior taxes The following factors may indicate that the method is not educational. Senior taxes The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. Senior taxes The facts that purport to support the viewpoint are distorted. Senior taxes The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. Senior taxes The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. Senior taxes   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. Senior taxes Qualifying organizations. Senior taxes   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. Senior taxes College book stores, cafeterias, restaurants, etc. Senior taxes   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. Senior taxes Alumni association. Senior taxes   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. Senior taxes If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . Senior taxes Athletic organization. Senior taxes   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. Senior taxes If it is not so engaged, your organization may be exempt as a social club described in chapter 4. Senior taxes Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. Senior taxes If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. Senior taxes Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. Senior taxes The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. Senior taxes (This information also must be projected, so far as may be feasible, for the next academic year. Senior taxes ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. Senior taxes A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. Senior taxes A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. Senior taxes The public school district and county in which the school is located. Senior taxes How to determine racial composition. Senior taxes   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. Senior taxes Nevertheless, a statement of the method by which the racial composition was determined must be supplied. Senior taxes The identity of individual students or members of the faculty and administrative staff should not be included with this information. Senior taxes   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. Senior taxes Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. Senior taxes Also, the school must circulate information that clearly states the school's admission policies. Senior taxes A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. Senior taxes The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. Senior taxes The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. Senior taxes Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. Senior taxes A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. Senior taxes A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. Senior taxes Policy statement. Senior taxes   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. Senior taxes Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. Senior taxes Publicity requirement. Senior taxes   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. Senior taxes Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. Senior taxes To satisfy this requirement, the school must use one of the following two methods. Senior taxes Method one. Senior taxes   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. Senior taxes Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Senior taxes When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. Senior taxes If this method is used, the notice must meet the following printing requirements. Senior taxes It must appear in a section of the newspaper likely to be read by prospective students and their families. Senior taxes It must occupy at least 3 column inches. Senior taxes It must have its title printed in at least 12 point bold face type. Senior taxes It must have the remaining text printed in at least 8 point type. Senior taxes The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. Senior taxes It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. Senior taxes   Method two. Senior taxes   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. Senior taxes If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. Senior taxes In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. Senior taxes The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. Senior taxes Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Senior taxes Exceptions. Senior taxes   The publicity requirements will not apply in the following situations. Senior taxes First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. Senior taxes These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. Senior taxes If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. Senior taxes Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . Senior taxes   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. Senior taxes The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. Senior taxes   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. Senior taxes Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. Senior taxes   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. Senior taxes The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. Senior taxes In this regard, it is each school's responsibility to determine whether either of the exceptions applies. Senior taxes Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. Senior taxes Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. Senior taxes Facilities and programs. Senior taxes   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. Senior taxes Scholarship and loan programs. Senior taxes   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. Senior taxes This must be known throughout the general community being served by the school and should be referred to in its publicity. Senior taxes Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. Senior taxes Certification. Senior taxes   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. Senior taxes   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. Senior taxes Recordkeeping requirements. Senior taxes With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. Senior taxes Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. Senior taxes Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. Senior taxes Copies of all materials used by or on behalf of the school to solicit contributions. Senior taxes Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. Senior taxes (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. Senior taxes ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. Senior taxes However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. Senior taxes The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. Senior taxes Similarly, the IRS does not require a school to keep records prohibited under state or federal law. Senior taxes Exceptions. Senior taxes   The school does not have to independently maintain these records for IRS use if both of the following are true. Senior taxes Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. Senior taxes The school maintains copies of these reports from which this information is readily obtainable. Senior taxes If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. Senior taxes Failure to maintain records. Senior taxes   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. Senior taxes Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. Senior taxes However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. Senior taxes Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). Senior taxes Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. Senior taxes Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. Senior taxes Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. Senior taxes The rest of this section contains a description of the information to be provided by certain specific organizations. Senior taxes This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. Senior taxes Each of the following organizations must submit the information described. Senior taxes Charitable organization supporting education. Senior taxes   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. Senior taxes Scholarships. Senior taxes   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. Senior taxes Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. Senior taxes How and by whom the recipients are or will be selected. Senior taxes If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. Senior taxes If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. Senior taxes A copy of the scholarship application form and any brochures or literature describing the scholarship program. Senior taxes Hospital. Senior taxes   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. Senior taxes   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. Senior taxes You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. Senior taxes Submit also an appraisal showing the fair rental value of the rented space. Senior taxes Clinic. Senior taxes   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. Senior taxes Home for the aged. Senior taxes   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. Senior taxes Community nursing bureau. Senior taxes   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. Senior taxes Organization providing loans. Senior taxes   If you make, or will make, loans for charitable and educational purposes, submit the following information. Senior taxes An explanation of the circumstances under which such loans are, or will be, made. Senior taxes Criteria for selection, including the rules of eligibility. Senior taxes How and by whom the recipients are or will be selected. Senior taxes Manner of repayment of the loan. Senior taxes Security required, if any. Senior taxes Interest charged, if any, and when payable. Senior taxes Copies in duplicate of the loan application and any brochures or literature describing the loan program. Senior taxes Public-interest law firms. Senior taxes   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. Senior taxes How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. Senior taxes Whether the organization will accept fees for its services. Senior taxes A description of the cases litigated or to be litigated and how they benefit the public generally. Senior taxes Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. Senior taxes Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. Senior taxes Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. Senior taxes Acceptance of attorneys' fees. Senior taxes   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. Senior taxes Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. Senior taxes   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. Senior taxes All fee awards must be paid to the organization and not to its individual staff attorneys. Senior taxes Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. Senior taxes Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. Senior taxes   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. Senior taxes   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. Senior taxes Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. Senior taxes That the particular religious beliefs of the organization are truly and sincerely held. Senior taxes That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. Senior taxes Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. Senior taxes If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. Senior taxes Churches. Senior taxes   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. Senior taxes In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. Senior taxes   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. Senior taxes Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. Senior taxes The IRS considers the facts and circumstances of each organization applying for church status. Senior taxes Convention or association of churches. Senior taxes   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. Senior taxes Integrated auxiliaries. Senior taxes   An organization is an integrated auxiliary of a church if all the following are true. Senior taxes The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). Senior taxes It is affiliated with a church or a convention or association of churches. Senior taxes It is internally supported. Senior taxes An organization is internally supported unless both of the following are true. Senior taxes It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). Senior taxes It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. Senior taxes Special rule. Senior taxes   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. Senior taxes   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. Senior taxes   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. Senior taxes Scientific Organizations You must show that your organization's research will be carried on in the public interest. Senior taxes Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. Senior taxes Aiding in the scientific education of college or university students. Senior taxes Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th
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IRS Provides Tax Relief to Victims of Hurricane Isaac; Return filing and Tax Payment Deadline Extended to Jan. 11, 2013

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IR-2012-70, Sept. 5, 2012

Updated 9/17/12 to include additional parishes

Updated 9/10/12 to include additional parishes and counties.

WASHINGTON –– The Internal Revenue Service is providing tax relief to individuals and businesses affected by Hurricane Isaac.

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Louisiana and Mississippi will receive tax relief, and other locations may be added in coming days based on additional damage assessments by FEMA.

The tax relief postpones various tax filing and payment deadlines that occurred on or after Aug. 26. As a result, affected individuals and businesses will have until Jan. 11, 2013 to file these returns and pay any taxes due. This includes corporations and businesses that previously obtained an extension until Sept. 17, 2012, to file their 2011 returns and individuals and businesses that received a similar extension until Oct. 15. It also includes the estimated tax payment for the third quarter of 2012, normally due Sept. 17.

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. In addition, the IRS is waiving failure-to-deposit penalties for federal employment and excise tax deposits normally due on or after Aug. 26 and before Sept. 10, if the deposits are made by Sept. 10, 2012. Details on available relief, including information on how to claim a disaster loss by amending a prior-year tax return, can be found on the disaster relief page on IRS.gov.

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov.

So far, IRS filing and payment relief applies to the following localities:

  • In Louisiana: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington and West Feliciana parishes;
  • In Mississippi: Adams, Amite, Clarke, Forrest, George, Hancock, Harrison, Hinds, Jackson, Lincoln, Marion, Pearl River, Pike, Stone, Walthall, Warren and Wilkinson counties.

 

Page Last Reviewed or Updated: 25-Sep-2013

The Senior Taxes

Senior taxes 1. Senior taxes   Application, Approval, and Appeal Procedures Table of Contents Introduction Topics - This chapter discusses: Application ProceduresForms Required Required Inclusions Miscellaneous Procedures Rulings and Determination LettersEffective Date of Exemption Revocation or Modification of Exemption Appeal ProceduresAppeals Office Consideration EO Technical Consideration Administrative Remedies Appeal to Courts Group Exemption LetterCentral Organization Application Procedure Keeping the Group Exemption Letter in Force Events Causing Loss of Group Exemption Introduction If your organization is one of the organizations described in this publication and is seeking recognition of tax-exempt status from the IRS, you should follow the procedures described in this chapter and the instructions that accompany the appropriate application forms. Senior taxes For information on section 501(c)(3) organizations, go to Section 501(c)(3) Organizations chapter 3. Senior taxes If your organization is seeking exemption under one of the other paragraphs of section 501(c), see chapter 4. Senior taxes Topics - This chapter discusses: Application procedures that generally apply to all organizations discussed in this publication, including the application forms; Rulings and determination letters (approvals/disapprovals); Appeal procedures available if an adverse determination letter is proposed; and Group exemption letters. Senior taxes Application Procedures Oral requests for recognition of exemption will not be considered by the IRS. Senior taxes Your application for tax-exempt status must be in writing using the appropriate forms as discussed below. Senior taxes Forms Required If your organization is seeking recognition of exemption from federal income tax, it must use a specific application prescribed by the IRS in Revenue Procedure 2013–9, sec. Senior taxes 3. Senior taxes If your organization is a central organization with exempt status, see Group Exemption Letter , later. Senior taxes All applications must be signed by an authorized individual. Senior taxes Form 1023, Application for Recognition of Exemption. Senior taxes   File Form 1023 if you are seeking recognition of exemption under section: 501(c)(3) Corporations, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports, or prevention of cruelty for children or animals, 501(e) Cooperative hospital service organization, 501(f) Cooperative service organization of operating educational organizations, 501(k) Certain organizations providing child care, 501(n) Charitable risk pools, and 501(q) Credit counseling organizations. Senior taxes Form 1024, Application for Recognition of Exemption Under Section 501(a). Senior taxes    File Form 1024 if you are seeking recognition of exemption under section: 501(c)(2) Title holding corporations, 501(c)(4) Civic leagues, social welfare organizations, 501(c)(5) Labor, agricultural, or horticultural organizations, 501(c)(6) Business leagues, chambers of commerce, etc. Senior taxes , 501(c)(7) Social clubs, 501(c)(8) Fraternal beneficiary societies, orders, or associations, 501(c)(9) Voluntary employees’ beneficiary associations, 501(c)(10) Domestic fraternal societies, orders, etc. Senior taxes , 501(c)(12) Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies, 501(c)(13) Cemetery companies, 501(c)(15) Mutual insurance companies or associations, 501(c)(17) Trusts providing for the payment of supplemental unemployment compensation benefits, 501(c)(19) A post, organization, auxiliary unit, etc. Senior taxes of past or present members of the Armed Forces of the United States, and 501(c)(25) Title holding corporations or trusts. Senior taxes  Form 8718, User Fee for Exempt Organization Determination Letter Request, must also be sent along with Form 1024. Senior taxes Letter application. Senior taxes   If your organization is seeking recognition of exemption under section 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), or (29), submit a letter application with Form 8718. Senior taxes See Required Inclusions for the information to include with the letter application. Senior taxes Form 1028. Senior taxes   Use Form 1028 if your organization is a farmers’ cooperative seeking recognition of exemption under section 521. Senior taxes You must also submit Form 8718. Senior taxes Form 8871. Senior taxes    Use Form 8871 if you are a political party or campaign committee for a candidate for federal, state or local office seeking to be treated as tax-exempt under section 527. Senior taxes See Political Organization Income Tax Return , later. Senior taxes    Some organizations do not have to use specific application forms. Senior taxes The application your organization must use is specified in the chapter in this publication dealing with your kind of organization. Senior taxes It is also shown in the Organization Reference Chart, later. Senior taxes Power of attorney. Senior taxes   If your organization expects to be represented by an individual such as an attorney, CPA, officer or other person authorized to practice before the IRS, whether in person or by correspondence, you must file a Form 2848 with your exemption application. Senior taxes The power of attorney must specifically authorize an individual to represent your organization. Senior taxes You cannot name an organization, firm, etc. Senior taxes as your representative. Senior taxes Form 2848, Power of Attorney and Declaration of Representative, can be used for this purpose. Senior taxes The categories of individuals who can represent you before the IRS are listed on the form. Senior taxes Non-exemption for terrorist organizations. Senior taxes   An organization that is identified or designated as a terrorist organization within the meaning of section 501(p)(2) is not eligible to apply for recognition of exemption. Senior taxes User fee. Senior taxes   The law requires the payment of a user fee for determination letter requests such as your application for recognition of tax-exempt status. Senior taxes If you are filing Form 1023, user fee information is included in Part XI. Senior taxes If you are required to apply for recognition of exemption by submitting Form 1024, a letter application, etc. Senior taxes and you must pay a user fee, you should use Form 8718 to figure the amount of your user fee and to pay it. Senior taxes Your payment must accompany your request. Senior taxes The IRS will not process a request unless the fee has been paid. Senior taxes    For the current user fee amount and processing time for applications go to IRS. Senior taxes gov and select “Charities and Non-Profits” from the buttons near the top. Senior taxes Then select the underlined link “How to Apply To Be Tax-Exempt” for the latest user fees or I want to check the status of my application for more information. Senior taxes You can also call 1-877-829-5500. Senior taxes Required Inclusions Employer identification number (EIN). Senior taxes   Every exempt organization must have an EIN, whether or not it has any employees. Senior taxes An EIN is required before an exemption application is submitted. Senior taxes Information on how to apply for an EIN by using one of the following methods can be found at Employer ID Numbers (EIN): Online— This is the preferred method for requesting an EIN. Senior taxes The EIN is issued immediately once the application information is validated. Senior taxes By telephone at 1-800-829-4933, from 7:00 a. Senior taxes m. Senior taxes to 7:00 p. Senior taxes m. Senior taxes local time, Monday through Friday. Senior taxes The EIN is provided over the phone to an authorized individual. Senior taxes By mailing or faxing Form SS-4, Application for Employer Identification Number. Senior taxes If the faxed Form SS-4 includes the taxpayer's fax number, a fax will be sent back with the EIN within four (4) business days. Senior taxes    Use only one method for each entity so you do not receive more than one EIN for an entity. Senior taxes   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. Senior taxes Organizing documents. Senior taxes   Your application should include a copy of the organizing or enabling document that is signed by a principal officer or is accompanied by a written declaration signed by an authorized individual certifying that the document is a complete and accurate copy of the original or meets the requirements of a conformed copy. Senior taxes   If your organizing or enabling document are articles of incorporation, include evidence that it was filed and approved by a state official. Senior taxes (For example, a stamped “Filed” copy dated by the Secretary of State is prima facie evidence that it was filed and approved by a state official. Senior taxes ) A copy of the articles of incorporation can also be submitted with a written declaration signed by an authorized individual indicating the copy is complete and was filed and approved by the state, including the date filed. Senior taxes Bylaws. Senior taxes   Bylaws alone are not organizing documents. Senior taxes However, if your organization has adopted bylaws, include a current copy. Senior taxes The bylaws need not be signed if submitted as an attachment. Senior taxes   If your organization's name has been officially changed by an amendment to your organizing instruments, you should also attach a conformed copy of that amendment to your application. Senior taxes    Bylaws may be considered an organizing document only if they are properly structured (includes name, purpose, signatures, and intent to form an organization). Senior taxes Conformed copy. Senior taxes   A conformed copy is a copy that agrees with the original and all amendments to it. Senior taxes If the original document required a signature, the copy should either be signed by a principal officer or, if not signed, be accompanied by a written declaration signed by an authorized officer of the organization. Senior taxes With either option, the officer must certify that the document is a complete and accurate copy of the original. Senior taxes A certificate of incorporation should be approved and dated by an appropriate state official. Senior taxes Attachments. Senior taxes    When submitting attachments, every attachment should show your organization's name and EIN. Senior taxes It should also state that it is an attachment to your application form and identify the part and line item number to which it applies. Senior taxes Original documents. Senior taxes   Do not submit original documents because they become part of the IRS file and cannot be returned. Senior taxes Description of activities. Senior taxes   Your application must include a full description of the proposed activities of your organization, including each of the fundraising activities of a section 501(c)(3) organization and a narrative description of anticipated receipts and contemplated expenditures. Senior taxes When describing the activities in which your organization expects to engage, you must include the standards, criteria, procedures, or other means that your organization adopted or planned for carrying out those activities. Senior taxes   To determine the information you need to provide, you should study the part of this publication that applies to your organization. Senior taxes The appropriate chapter will describe the purposes and activities that your organization must pursue, engage in, and include in your application in order to achieve exempt status. Senior taxes   Often, your organization's articles of organization (or other organizing instruments) contain descriptions of your organization's purposes and activities. Senior taxes   Your application should describe completely and in detail your past, present, and planned activities. Senior taxes Financial data. Senior taxes   You must include in your application financial statements showing your receipts and expenditures and a balance sheet for the current year and the 3 preceding years (or for the number of years your organization was in existence, if less than 4 years). Senior taxes For each accounting period, you must describe the sources of your receipts and the nature of your expenditures. Senior taxes   If you have not yet begun operations, or have operated for less than 1 year, a proposed budget for 2 full accounting periods and a current statement of assets and liabilities will be acceptable. Senior taxes Exempt status established in application. Senior taxes   If your application and its supporting documents show that your organization meets the requirements for tax-exempt status under the Code section you applied, the IRS will issue a favorable determination letter or ruling. Senior taxes Miscellaneous Procedures To help in processing your application, be sure to attach all schedules, statements, and other documents required by the application form. Senior taxes If you do not attach them, you may have to resubmit your application or you may otherwise encounter a delay in processing your application. Senior taxes Incomplete application. Senior taxes   If an application is not complete and does not contain all the required attachments found under Required Inclusions, the IRS may return it to you for completion. Senior taxes The IRS may keep the application and send a letter requesting the missing information if most of the information has been received. Senior taxes   If the IRS returns the application or requests additional information from you, that application will be considered filed on the date the substantially completed application is postmarked, or if no postmark, received at the IRS. Senior taxes   Generally, the user fee will not be refunded if an incomplete application is filed. Senior taxes   Additional information may be requested if necessary to clarify the nature of your organization. Senior taxes Application made under wrong paragraph of section 501(c). Senior taxes   Occasionally, an organization appears to qualify for exemption under a paragraph of section 501(c) that is different from the one for which the organization applied. Senior taxes If the application was made on Form 1024, which applies to more than one paragraph of section 501(c), the organization can be recognized as exempt under any paragraph to which the form applies if the organization has agreed to have its application considered under that paragraph. Senior taxes It must also supply any additional information required for the application under the new paragraph. Senior taxes Different application form needed. Senior taxes   If a different application form is required for your organization, the IRS will so advise your organization and will provide the appropriate application form for your convenience in reapplying under that paragraph, if you wish to do so. Senior taxes Although supporting information previously furnished need not be duplicated, you must provide any necessary additional information required for the application. Senior taxes If your reply is not received within a limited time, your application will be processed only for the paragraph under which you originally applied. Senior taxes   When a specific application form is needed for the paragraph under which your organization qualifies, that form is required before a letter recognizing exemption can be issued. Senior taxes This includes cases in which a determination letter is modified to recognize an organization's exempt status under a paragraph other than the paragraph under which it originally established exemption. Senior taxes IRS responses. Senior taxes   Organizations that submit a complete application will receive an acknowledgment from the IRS. Senior taxes Others will receive a letter requesting more information or returning an incomplete application. Senior taxes Applicants also will be notified if the application is forwarded to EO Technical Office for consideration. Senior taxes These letters will be sent out as soon as possible after receipt of the organization's application. Senior taxes Withdrawal of application. Senior taxes   An application may be withdrawn at any time before the issuance of a ruling or determination letter upon the written request of a principal officer or authorized representative of your organization. Senior taxes However, the withdrawal will not prevent the information contained in the application from being used by the IRS in any subsequent examination of your organization's returns. Senior taxes The information forwarded with an application will not be returned to your organization and, generally, when an application is withdrawn, the user fee paid will not be refunded. Senior taxes Requests for withholding of information from the public. Senior taxes   The law requires many exempt organizations and private foundations to make their application forms and annual information returns available for public inspection. Senior taxes The law also requires the IRS to make available for public inspection, in accordance with section 6104 and the related regulations, your approved application for recognition of exemption (including any papers submitted in support of the application) and the ruling or determination letter (discussed later, under Rulings and Determination Letters . Senior taxes )   Any information submitted in the application or in support of it that relates to any trade secret, patent, process, style of work, or apparatus, upon request, can be withheld from public inspection if the IRS determines that the disclosure of such information would adversely affect the organization. Senior taxes Your request must: Identify the material to be withheld (the document, page, paragraph, and line) by clearly marking it “Not Subject To Public Inspection. Senior taxes ” Include the reasons for your organization's position that the information is of the type that can be withheld from public inspection. Senior taxes Be filed with the office where your organization files the documents in which the material to be withheld is contained. Senior taxes Where to file. Senior taxes   Send your application for exempt status and Form 8718, (if required) to: Internal Revenue Service PO Box 12192 Covington, KY 41012-0192   Your application will be considered by EO Determinations, who will either issue a favorable determination letter to your organization, issue an adverse determination letter denying the exempt status claimed in the application, or refer the case to the Exempt Organizations Technical Office (EO Technical). Senior taxes    Form 8940, Request for Miscellaneous Determination. Senior taxes You can request miscellaneous determinations under sections 507, 509(a), 4940, 4942, 4945, and 6033 with Form 8940. Senior taxes Nonexempt charitable trusts also file Form 8940 for an initial determination of section 509(a)(3) status or change to their type. Senior taxes See Form 8940 and instructions for more information. Senior taxes Requests other than applications. Senior taxes Requests other than applications for recognition of exemption or Form 8940 (for example, requests for rulings involving feeder organizations, application of excise taxes to activities of private foundations, taxation of unrelated business income, etc. Senior taxes ) should be sent to: Internal Revenue Service  Attention: EO Letter Rulings PO Box 27720 McPherson Station Washington, DC 20038 These requests, similar to applications for recognition of exemption previously discussed, must be accompanied by the appropriate user fee. Senior taxes The schedule for user fees, including those for requests other than applications, can be found in Revenue Procedure 2013-8, 2013-1 I. Senior taxes R. Senior taxes B. Senior taxes 237. Senior taxes Referral to EO Technical. Senior taxes   EO Determinations will refer to EO Technical any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. Senior taxes EO Determinations can request technical advice on any technical or procedural question that cannot be resolved on the basis of law, regulations, or a clearly applicable revenue ruling or other published precedent. Senior taxes An organization can request that an issue be referred to EO Technical for technical advice if it feels that a lack of uniformity exists as to the disposition of the issue or if an issue is so unusual or complex as to warrant consideration by EO Technical. Senior taxes If a determination letter is issued based on technical advice from EO Technical regarding qualification for exemption or foundation status, no further administrative appeal is available on the issue that was the subject of technical advice. Senior taxes Reminder. Senior taxes   The law requires payment of a user fee for determination letter requests. Senior taxes Go to IRS. Senior taxes gov/Charities and select Current User Fees-Exempt Organizations to find the required payment. Senior taxes Payment must accompany each request. Senior taxes Rulings and Determination Letters Elimination of the advance public charity status. Senior taxes   New regulations eliminate the advance ruling process for a section 501(c)(3) organization. Senior taxes Under the new regulations, a new section 501(c)(3) organization will be classified as a publicly supported organization and not a private foundation if it can show when it applies for tax-exempt status that it reasonably can be expected to be publicly supported. Senior taxes The new rules no longer require the organization to file Form 8734, Support Schedule for Advance Ruling Period, after completing its first 5 tax years. Senior taxes See Elimination of the Advance Ruling Process . Senior taxes An organization must describe fully the activities in which it expects to engage. Senior taxes This includes standards, procedures, or other means adopted or planned by the organization for carrying out its activities, expected sources of funds, and the nature of its contemplated expenses. Senior taxes When an organization does not supply the information previously mentioned under Application Procedures , or fails to furnish a sufficiently detailed description of its proposed activities to permit a conclusion that it will clearly be exempt, a proposed adverse determination letter or ruling may be issued. Senior taxes Adverse determination. Senior taxes   A proposed adverse ruling or determination letter will be issued to an organization that has not provided sufficiently detailed information to establish that it qualifies for exemption or if the information provided establishes that it does not qualify for exemption. Senior taxes An organization can appeal a proposed adverse ruling or determination letter. Senior taxes See Appeal Procedures , later. Senior taxes Effective Date of Exemption A ruling or determination letter recognizing exemption is usually effective as of the date of formation of an organization if, during the period before the date of the ruling or determination letter, its purposes and activities were those required by the law. Senior taxes (See Application for Recognition of Exemption in chapter 3 for the special rule for organizations applying for recognition of exemption under section 501(c)(3). Senior taxes ) Upon obtaining recognition of exemption, the organization can file a claim for a refund of income taxes paid for the period for which its exempt status is recognized. Senior taxes If an organization is required to alter its activities or substantially amend its charter to qualify, the ruling or determination letter recognizing exemption will be effective as of the date specified in the letter. Senior taxes If a nonsubstantive amendment is made, such as correction of a clerical error in the enabling instrument or the addition of a dissolution clause, exemption will ordinarily be recognized as of the date of formation if the activities of the organization before the ruling or determination are consistent with the exemption requirements. Senior taxes A ruling or determination letter recognizing exemption cannot be relied on if there is a material change, inconsistent with exemption, in the character, the purpose, or the method of operation of the organization. Senior taxes Also, a ruling or determination letter cannot be relied on if it is based on any inaccurate material factual representations. Senior taxes Revocation or Modification of Exemption A ruling or determination letter recognizing exemption may be revoked or modified by: A notice to the organization to which the ruling or determination letter originally was issued, Enactment of legislation or ratification of a tax treaty, A decision of the United States Supreme Court, Issuance of temporary or final regulations, or Issuance of a revenue ruling, a revenue procedure, or other statement published in the Internal Revenue Bulletin or Cumulative Bulletin. Senior taxes When revocation takes effect. Senior taxes   If the organization omitted or misstated a material fact, operated in a manner materially different from that originally represented, or, with regard to organizations to which section 503 applies, engaged in a prohibited transaction (such as diverting corpus or income from its exempt purpose), the revocation or modification may be retroactive. Senior taxes Material change in organization. Senior taxes   If there is a material change, inconsistent with exemption, in the character, purpose, or method of operation of the organization, revocation or modification will ordinarily take effect as of the date of that material change. Senior taxes Relief from retroactivity. Senior taxes   If a ruling or determination letter was issued in error or the IRS changed its position after issuing a letter or ruling, and if section 7805(b) relief is granted, retroactivity of the revocation or modification ordinarily will be limited to a date not earlier than that on which the original ruling or determination letter was modified or revoked. Senior taxes For more information on requesting section 7805(b) relief, see Revenue Procedure 2013-4, 2013-1 I. Senior taxes R. Senior taxes B. Senior taxes 126, sec. Senior taxes 13 (or later update). Senior taxes Foundations. Senior taxes   The determination of the effective date is the same for the revocation or modification of foundation status or operating foundation status unless the effective date is expressly covered by statute or regulations. Senior taxes Written notice. Senior taxes   If an EO area manager concludes, as a result of examining an information return or considering information from any other source, that a ruling or determination letter should be revoked or modified, the organization will be advised in writing of the proposed action and the reasons for it. Senior taxes   The organization will also be advised of its right to protest the proposed action by requesting Appeals Office consideration. Senior taxes The appeal procedures are discussed next. Senior taxes Appeal Procedures If your organization applies for tax-exempt status and EO Determination decides your organization does not qualify, your organization will be advised of its rights to protest the determination by requesting Appeals Office consideration. Senior taxes This process does not apply to determinations issued by EO Technical. Senior taxes Your organization must submit a statement of its views fully explaining its reasoning. Senior taxes The statement must be submitted within 30 days from the date of the adverse determination letter and must state whether it wishes Appeals Office consideration. Senior taxes Representation. Senior taxes   A principal officer or trustee can represent an organization at any level of appeal within the IRS. Senior taxes Also, an attorney, certified public accountant, or individual enrolled to practice before the IRS can represent the organization. Senior taxes   If the organization's representative attends a conference without a principal officer or trustee, the representative must file a proper power of attorney or a tax information authorization before receiving or inspecting confidential information. Senior taxes Form 2848 or Form 8821, Tax Information Authorization, as appropriate (or any other properly written power of attorney or authorization), can be used for this purpose. Senior taxes These forms can be obtained from the IRS. Senior taxes For more information, see Publication 947, Practice Before the IRS and Power of Attorney. Senior taxes Appeals Office Consideration EO Determinations will consider the statement protesting and appealing (hereinafter appealing) the adverse determination and decide if the information affects its determination. Senior taxes If the appeal does not provide a basis to reconsider its adverse determination, it will forward the appeal and case file to the Appeals Office. Senior taxes For more information about the role of the Appeals Office, see Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues. Senior taxes The appeal should include the following information. Senior taxes The organization's name, address, daytime telephone number, and employer identification number. Senior taxes A statement that the organization wants to protest the determination. Senior taxes A copy of the letter showing the determination you disagree with, or the date and symbols on the determination letter. Senior taxes A statement of facts supporting the organization's position in any contested factual issue. Senior taxes A statement outlining the law or other authority the organization is relying on. Senior taxes A statement as to whether a conference at the Appeals Office is desired. Senior taxes The statement of facts in item 4 must be declared true under penalties of perjury. Senior taxes This may be done by adding to the protest the following signed declaration:   “Under penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and statements and, to the best of my knowledge and belief, it is true, correct, and complete. Senior taxes ”           Signature. Senior taxes   If the organization's representative submits the appeal, a substitute declaration must be included, stating: That the representative prepared the appeal and accompanying documents, and Whether the representative knows personally that the statements of fact contained in the appeal and accompanying documents are true and correct. Senior taxes Be sure the appeal contains all of the information requested. Senior taxes Incomplete appeals will be returned for completion. Senior taxes If a conference is requested, it will be held at the Appeals Office, unless the organization requests that the meeting be held at a field office convenient to both parties. Senior taxes The Appeals Office, after considering the organization's appeal as well as information presented in any conference held, will notify the organization of its decision and issue an appropriate determination letter. Senior taxes An adverse decision can be appealed to the courts (discussed later). Senior taxes The Appeals Office must request technical advice from EO Technical on any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. Senior taxes If an organization believes that its case involves such an issue, it should ask the Appeals Office to request technical advice. Senior taxes Any determination letter issued on the basis of technical advice from EO Technical cannot be appealed to the Appeals Office for those issues that were the subject of the technical advice from EO Technical. Senior taxes EO Technical Consideration If an application is referred to EO Technical for issuance of a ruling and an adverse ruling is issued, the organization will be informed of the basis for the conclusion, its right to file a protest within 30 days, and its right to have a conference with EO Technical. Senior taxes Administrative Remedies In the case of an application under section 501(c)(3), all of the following actions, called administrative remedies, must be completed by your organization before an unfavorable ruling or determination letter from the IRS can be appealed to the courts. Senior taxes The filing of a substantially completed application Form 1023 or group exemption request under section 501(c)(3) (described earlier in this chapter) or the filing of a request for a determination of foundation status (see Private Foundations and Public Charities in chapter 3). Senior taxes In the case of a late-filed application, requesting relief under Regulations section 301. Senior taxes 9100 regarding applications for extensions of time for making an election or application for relief from tax (see Application for Recognition of Exemption in chapter 3). Senior taxes The timely submission of all additional information requested to perfect an exemption application or request for determination of private foundation status. Senior taxes Exhaustion of all administrative appeals available within the IRS, including protest of an adverse ruling issued by EO Technical in the case of an exemption application. Senior taxes The actions just described will not be considered completed until the IRS has had a reasonable time to act upon the appeal or protest, as the case may be. Senior taxes An organization will not be considered to have exhausted its administrative remedies before the earlier of: The completion of the steps just listed and the sending by certified or registered mail of a notice of final determination, or The expiration of the 270-day period in which the IRS has not issued a notice of final determination and the organization has taken, in a timely manner, all reasonable steps to secure a ruling or determination. Senior taxes 270-day period. Senior taxes   The 270-day period will be considered by the IRS to begin on the date a substantially completed Form 1023 or group exemption request is sent to the IRS. Senior taxes See Application Procedures , earlier, for information needed to complete Form 1023. Senior taxes   If the application does not contain all of the required items, it will not be further processed and may be returned to the applicant for completion. Senior taxes The 270-day period, in this event, will not be considered as starting until the date the application is remailed to the IRS with the requested information, or, if a postmark is not evident, on the date the IRS receives a substantially completed application. Senior taxes Appeal to Courts If the IRS issues an unfavorable determination letter or ruling to your organization and you have exhausted all the administrative remedies just discussed, your organization can seek judicial remedies. Senior taxes For example, if your organization has paid the tax resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a refund in a U. Senior taxes S. Senior taxes District Court or the U. Senior taxes S. Senior taxes Court of Federal Claims. Senior taxes Or, if your organization elected not to pay the tax deficiency resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a redetermination of the tax deficiencies in the United States Tax Court. Senior taxes For more information on these types of suits, get Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. Senior taxes In certain situations, your organization can file suit for a declaratory judgment in the U. Senior taxes S. Senior taxes District Court for the District of Columbia, the U. Senior taxes S. Senior taxes Court of Federal Claims, or the U. Senior taxes S. Senior taxes Tax Court. Senior taxes This remedy is available if your organization received an adverse notice of final determination, or if the IRS failed to make a timely determination on your initial or continuing qualification or classification as an exempt organization. Senior taxes However, your exempt status claim must be as: An organization qualifying under section 501(c)(3), An organization to which a deduction for a contribution is allowed under section 170(c)(2), An organization that is a private foundation under section 509(a), A private operating foundation under section 4942(j)(3), or A cooperative organization that is exempt from tax under section 521. Senior taxes Adverse notice of final determination. Senior taxes   The adverse notice of final determination referred to above is a ruling or determination letter sent by certified or registered mail holding that your organization: Is not described in section 501(c)(3) or section 170(c)(2), Is a private foundation as defined in section 4942(j)(3), or Is a public charity described in a part of section 509(a) or section 170(b)(1)(A) other than the part under which your organization requested classification. Senior taxes Favorable court rulings - IRS procedure. Senior taxes   If a suit results in a final determination that your organization is exempt from tax, the IRS will issue a favorable ruling or determination letter, provided your organization has filed an application for exemption and submitted a statement that the underlying facts and applicable law are the same as in the period considered by the court. Senior taxes Group Exemption Letter A group exemption letter is a ruling or determination letter issued to a central organization recognizing on a group basis the exemption under section 501(c) of subordinate organizations on whose behalf the central organization has applied for recognition of exemption. Senior taxes A central organization is an organization that has one or more subordinates under its general supervision or control. Senior taxes A subordinate organization is a chapter, local, post, or unit of a central organization. Senior taxes A central organization may be a subordinate itself, such as a state organization that has subordinate units and is itself affiliated with a national (central) organization. Senior taxes A subordinate organization may or may not be incorporated, but it must have an organizing document. Senior taxes A subordinate that is organized and operated in a foreign country cannot be included in a group exemption letter. Senior taxes A subordinate described in section 501(c)(3) cannot be included in a group exemption letter if it is a private foundation described in section 509(a). Senior taxes If your organization is a subordinate controlled by a central organization (for example, a church, a veterans' organization, or a fraternal organization), you should check with the central organization to see if it has been issued a group exemption letter that covers your organization. Senior taxes If it has, you do not have to file a separate application unless your organization no longer wants to be included in the group exemption letter. Senior taxes If the group exemption letter does not cover your organization, ask your central organization about being included in the next annual group ruling update that it submits to the IRS. Senior taxes Central Organization Application Procedure If your organization is a central organization with affiliated subordinates under its control, it can apply for a group exemption letter for its subordinates, provided it has obtained recognition of its own exemption before or concurrently with the group exemption. Senior taxes You should make the application for such subordinates by letter instead of submitting either Form 1023 or 1024. Senior taxes This procedure relieves each of the subordinates covered by a group exemption letter from filing its own application. Senior taxes A central organization obtains its own recognition of exemption by sending its application to the IRS address shown on Form 8718 or Form 1023. Senior taxes If the central organization has previously obtained recognition of its own exemption, it must indicate its employer identification number and the date of the letter recognizing its exemption. Senior taxes It need not forward documents already submitted. Senior taxes However, if it has not already done so, the central organization must submit a copy of any amendment to its governing instruments or internal regulations as well as any information about changes in its character, purposes, or method of operation. Senior taxes Employer identification number. Senior taxes   The central organization must have an EIN before it submits a completed exemption or group exemption application. Senior taxes Each subordinate must have its own EIN, even if it has no employees. Senior taxes When submitting its group exemption application, the central organization must provide an EIN for each subordinate organization. Senior taxes Information required for subordinate organizations. Senior taxes   In addition to the information required to obtain recognition of its own exemption, the central organization must submit information for those subordinates to be included in the group exemption letter. Senior taxes The information should be forwarded in a letter signed by a principal officer of the central organization setting forth or including as attachments the following. Senior taxes Information verifying that the subordinates: Are affiliated with the central organization at the close of its annual accounting period; Are subject to its general supervision or control; Are all eligible to qualify for exemption under the same paragraph of section 501(c), though not necessarily the paragraph under which the central organization itself is exempt; Are not private foundations if the application for a group exemption letter involves section 501(c)(3); Are all on the same accounting period as the central organization if they are to be included in group returns; and Are organizations that have been formed within the 15-month period preceding the date of submission of the group exemption application if they are claiming section 501(c)(3) status and are subject to the requirements of section 508(a) and wish to be recognized as exempt from their dates of creation (a group exemption letter may be issued covering subordinates, one or more of which have not been organized within the 15-month period preceding the date of submission, if all subordinates are willing to be recognized as exempt only from the date of application). Senior taxes A detailed description of the purposes and activities of the subordinates, including the sources of receipts and the nature of expenditures. Senior taxes A sample copy of a uniform governing instrument (such as a charter or articles of association) adopted by the subordinates, or, in its absence, copies of representative instruments. Senior taxes An affirmation to the effect that, to the best of the officer's knowledge, the purposes and activities of the subordinates are as stated in (2) and (3), above. Senior taxes A statement that each of the subordinates has provided a written authorization to the central organization, signed by an authorized officer of the subordinate, agreeing to be included in the group exemption (see also New 501(c)(3) organizations that want to be included , later in this section). Senior taxes A list of subordinates to be included in the group exemption letter to which the IRS has issued an outstanding ruling or determination letter relating to exemption. Senior taxes If the application for a group exemption letter involves section 501(c)(3) and is subject to the provisions of the Code requiring that it give timely notice that it is not a private foundation (see Private Foundations in chapter 3), an affirmation to the effect that, to the best of the officer's knowledge and belief, no subordinate to be included in the group exemption letter is a private foundation as defined in section 509(a). Senior taxes For each subordinate that is a school claiming exemption under section 501(c)(3), the information required by Revenue Ruling 71-447, 1971-2 C. Senior taxes B. Senior taxes 230 and Revenue Procedure 75-50, 1975-2 C. Senior taxes B. Senior taxes 587 (these requirements are fully described in chapter 3, under Private Schools ; see also Schedule B, Form 1023). Senior taxes For any school affiliated with a church, the information to show that the provisions of Revenue Ruling 75-231, 1975-1 C. Senior taxes B. Senior taxes 158, have been met. Senior taxes A list of the names, mailing addresses, actual addresses if different, and EINs of subordinates to be included in the group exemption letter. Senior taxes A current directory of subordinates may be furnished instead of the list if it includes the required information and if the subordinates not to be included in the group exemption letter are identified. Senior taxes New 501(c)(3) organizations that want to be included. Senior taxes   A new organization, described in section 501(c)(3), that wants to be included in a group exemption letter must submit its authorization (as explained in item number 5, earlier, under Information required for subordinate organizations ) to the central organization before the end of the 15th month after it was formed in order to satisfy the requirement of section 508(a). Senior taxes The central organization must also include this subordinate in its next annual submission of information, as discussed later, under Information Required Annually . Senior taxes Keeping the Group Exemption Letter in Force Continued effectiveness of a group exemption letter is based on the following conditions. Senior taxes The continued existence of the central organization. Senior taxes The continued qualification of the central organization for exemption under section 501(c). Senior taxes The submission by the central organization of the information regarding its subordinate organizations that is required annually (described under Information Required Annually). Senior taxes The annual filing of an information return (Form 990, for example) by the central organization if required. Senior taxes The continued effectiveness of a group exemption letter as to a particular subordinate is based on these four conditions, as well as on the continued conformity by the subordinate to the requirements for inclusion in a group exemption letter, the authorization for inclusion, and the annual filing of any required information return for the subordinate. Senior taxes Information Required Annually To maintain a group exemption letter, the central organization must submit annually, at least 90 days before the close of its annual accounting period, all of the following information. Senior taxes Information about all changes in the purposes, character, or method of operation of the subordinates included in the group exemption letter. Senior taxes A separate list (that includes the names, mailing addresses, actual addresses if different, and EINs of the affected subordinates) for each of the three following categories. Senior taxes Subordinates that have changed their names or addresses during the year. Senior taxes Subordinates no longer to be included in the group exemption letter because they no longer exist or have disaffiliated from or withdrawn their authorization to the central organization. Senior taxes Subordinates to be added to the group exemption letter because they are newly organized or affiliated or because they have recently authorized the central organization to include them. Senior taxes An annotated directory of subordinates will not be accepted for this purpose. Senior taxes If there were none of the above changes, the central organization must submit a statement to that effect. Senior taxes The same information about new subordinates that was required in the initial application for group exemption. Senior taxes (This information is listed in items 1 through 10, under Information required for subordinate organizations. Senior taxes , earlier. Senior taxes ) If a new subordinate does not differ in any material respects from the subordinates included in the application for group exemption, however, a statement to this effect may be submitted in lieu of detailed information. Senior taxes The organization should send this information to:   Ogden Service Center  Mail Stop 6271 Ogden, UT 84404-4749 Submitting the required information annually does not relieve the central organization or any of its subordinates of the duty to submit any other information that may be required by an EO area manager to determine whether the conditions for continued exemption are being met. Senior taxes Events Causing Loss of Group Exemption A group exemption letter no longer has effect, for either a particular subordinate or the group as a whole, when: The central organization notifies the IRS that it is going out of existence, The central organization notifies the IRS, by its annual submission or otherwise, that any of its subordinates will no longer fulfill the conditions for continued effectiveness, explained earlier, or The IRS notifies the central organization or the affected subordinate that the group exemption letter will no longer have effect for some or all of the group because the conditions for continued effectiveness of a group exemption letter have not been fulfilled. Senior taxes When notice is given under any of these three conditions, the IRS will no longer recognize the exempt status of the affected subordinates until they file separate applications on their own behalf or the central organization files complete supporting information for their reinclusion in the group exemption at the time of its annual submission. Senior taxes However, when the notice is given by the IRS and the withdrawal of recognition is based on the failure of the organization to comply with the requirements for recognition of tax-exempt status under the particular subsection of section 501(c), the revocation will ordinarily take effect as of the date of that failure. Senior taxes The notice, however, will be given only after the appeal procedures described earlier in this chapter are completed. Senior taxes Prev  Up  Next   Home   More Online Publications