Tax Amendment Form 20111040ez Free Online FilingWhere To Get Tax Form 1040x1040ezformsFederal Income Tax Ez Form 20112012 Tax Amendment FormIrs 2012 Tax Form2012 Tax Amendment1040ez 2014 FormsDfas MilWhere Can I File Only My State Taxes For FreeFile Taxes 2006Can I File My 2011 Taxes2012 Tax Return FormH&r Block 1040nrTaxact Online 2010Turbotax For 2010 Tax YearFree File For State Income TaxFree Income Tax SitesBlank Printable 1040ez FormCan Amended Returns Be E FiledForm 1040 EzTax Filing Deadline 2010Free Income Tax SoftwareFree 2010 Tax Return2010 1040 Tax FormFile My 2009 Taxes Online FreeTaxslayer For MilitaryFree 2012 Tax Return SoftwareTurbo Tax File 2012H&r BlockTurbotax Online 2012E-file State Taxes Free1040ez On LineIrs Income Tax Forms 2010H&r Tax Cut2011 Federal Tax FilingState Income TaxesAmended 2009 Tax Return InstructionsTurbo Tax 2010 2011
1040nr free 2. 1040nr free Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. 1040nr free Employment Tax ReturnsException. 1040nr free FUTA tax exception. 1040nr free FICA tax exemption election. 1040nr free Revoking the election. 1040nr free Definitions. 1040nr free Effect on employees. 1040nr free Political Organization Income Tax ReturnExempt function. 1040nr free Political organization taxable income. 1040nr free Separate fund. 1040nr free Failure to file. 1040nr free Failure to pay on time. 1040nr free Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. 1040nr free Publicly traded securities. 1040nr free Exceptions. 1040nr free Form 8283. 1040nr free Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. 1040nr free Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. 1040nr free S. 1040nr free Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. 1040nr free Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. 1040nr free S. 1040nr free Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. 1040nr free B. 1040nr free 418, www. 1040nr free irs. 1040nr free gov/pub/irs-tege/rp1995-48. 1040nr free pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. 1040nr free S. 1040nr free possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. 1040nr free Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. 1040nr free If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. 1040nr free On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). 1040nr free Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. 1040nr free Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. 1040nr free Form 990-N is due by the 15th day of the fifth month after the close of the tax year. 1040nr free For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. 1040nr free To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. 1040nr free Exceptions. 1040nr free This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. 1040nr free Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. 1040nr free Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. 1040nr free The following political organizations are not required to file Form 990 or Form 990-EZ. 1040nr free A state or local committee of a political party. 1040nr free A political committee of a state or local candidate. 1040nr free A caucus or association of state or local officials. 1040nr free A political organization that is required to report as a political committee under the Federal Election Campaign Act. 1040nr free A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. 1040nr free Form 990-EZ. 1040nr free This is a shortened version of Form 990. 1040nr free It is designed for use by small exempt organizations and nonexempt charitable trusts. 1040nr free Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. 1040nr free Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. 1040nr free If your organization does not meet either of these conditions, you cannot file Form 990-EZ. 1040nr free Instead you must file Form 990. 1040nr free Group return. 1040nr free A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. 1040nr free This return is in addition to the central organization's separate annual return if it must file a return. 1040nr free It cannot be included in the group return. 1040nr free See the instructions for Form 990 for the conditions under which this procedure may be used. 1040nr free In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. 1040nr free Schedule A (Form 990 or 990-EZ). 1040nr free Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. 1040nr free Schedule B (Form 990, Form 990-EZ, or 990-PF). 1040nr free Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. 1040nr free Schedule O (Form 990). 1040nr free Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. 1040nr free Other schedules may be required to be filed with Form 990 or 990-EZ. 1040nr free See the instructions for Form 990 or the instructions for Form 990-EZ for more information. 1040nr free Report significant new or changed program services and changes to organizational documents. 1040nr free An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. 1040nr free EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. 1040nr free See Miscellaneous Rules, Organization Changes and Exempt Status, later. 1040nr free Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. 1040nr free These organizations are discussed in chapter 3. 1040nr free Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. 1040nr free If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. 1040nr free See Regulations section 301. 1040nr free 6033-4 for more information. 1040nr free The IRS may waive the requirement to file electronically in cases of undue hardship. 1040nr free For information on filing a waiver, see Notice 2010-13, 2010-4 I. 1040nr free R. 1040nr free B. 1040nr free 327, available at www. 1040nr free irs. 1040nr free gov/ir/2010-04_IRSB/ar14. 1040nr free html. 1040nr free Form 990. 1040nr free An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. 1040nr free Form 990-PF. 1040nr free An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. 1040nr free Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. 1040nr free Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. 1040nr free Extension of time to file. 1040nr free Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. 1040nr free Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. 1040nr free For more information, see Form 8868 and its instructions. 1040nr free When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. 1040nr free However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. 1040nr free Application for exemption pending. 1040nr free An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. 1040nr free If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. 1040nr free For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. 1040nr free State reporting requirements. 1040nr free Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. 1040nr free See the instructions for those forms. 1040nr free Form 8870. 1040nr free Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. 1040nr free For more information, see Form 8870 and the instructions for that form. 1040nr free Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. 1040nr free The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. 1040nr free gov. 1040nr free This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. 1040nr free The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. 1040nr free It also includes the effective date of the automatic revocation and the date it was posted to the list. 1040nr free The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. 1040nr free Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. 1040nr free S. 1040nr free Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. 1040nr free S. 1040nr free Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. 1040nr free In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). 1040nr free An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). 1040nr free In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. 1040nr free For more information about automatic revocation, go to IRS. 1040nr free gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. 1040nr free Penalties Penalties for failure to file. 1040nr free Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. 1040nr free The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. 1040nr free Maximum penalty. 1040nr free The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. 1040nr free Organization with gross receipts over $1 million. 1040nr free For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. 1040nr free Managers. 1040nr free If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. 1040nr free Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. 1040nr free The penalty is $10 a day for each day that a return is not filed after the period given for filing. 1040nr free The maximum penalty imposed on all persons with respect to any one return is $5,000. 1040nr free Exception for reasonable cause. 1040nr free No penalty will be imposed if reasonable cause for failure to file timely can be shown. 1040nr free Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. 1040nr free Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. 1040nr free If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. 1040nr free Estimated tax. 1040nr free Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. 1040nr free Use Form 990-W to figure your organization's estimated tax payments. 1040nr free Travel tour programs. 1040nr free Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. 1040nr free Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. 1040nr free Example. 1040nr free ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). 1040nr free As part of its activities, ABC operates a travel tour program. 1040nr free The program is open to all current members of ABC and their guests. 1040nr free ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. 1040nr free Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. 1040nr free XYZ pays ABC a per person fee for each participant. 1040nr free Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. 1040nr free The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. 1040nr free Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. 1040nr free Therefore, ABC's tour program is an unrelated trade or business. 1040nr free For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. 1040nr free Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. 1040nr free For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. 1040nr free Small Business Health Care Tax Credit. 1040nr free If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. 1040nr free Go to IRS. 1040nr free gov and select Affordable Care Act Tax Provisions for more details. 1040nr free See Small Business Health Care Tax Credit at www. 1040nr free irs. 1040nr free gov/newsroom/article/0,,id=223666,00. 1040nr free html. 1040nr free Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. 1040nr free The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). 1040nr free The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. 1040nr free The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. 1040nr free This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. 1040nr free The credit can be as high as $6,240 for qualified tax-exempt organizations. 1040nr free The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. 1040nr free The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. 1040nr free All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. 1040nr free The process for certifying veterans for this credit is the same for all employers. 1040nr free For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. 1040nr free Notice 2012-13, 2012-9 I. 1040nr free R. 1040nr free B. 1040nr free 421, also provides additional guidance on submission Form 8850. 1040nr free Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. 1040nr free 22, 2011, and before January 1, 2013. 1040nr free After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. 1040nr free File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. 1040nr free It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. 1040nr free In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. 1040nr free Trust fund recovery penalty. 1040nr free If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. 1040nr free The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. 1040nr free The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. 1040nr free Exception. 1040nr free The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. 1040nr free This exception does not apply if it results in no one being liable for the penalty. 1040nr free FICA and FUTA tax exceptions. 1040nr free Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. 1040nr free FUTA tax exception. 1040nr free Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. 1040nr free FICA tax exemption election. 1040nr free Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. 1040nr free To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. 1040nr free The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. 1040nr free The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. 1040nr free Revoking the election. 1040nr free The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. 1040nr free Such revocation will apply retroactively to the beginning of the 2-year period. 1040nr free Definitions. 1040nr free For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. 1040nr free The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. 1040nr free Effect on employees. 1040nr free If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. 1040nr free However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. 1040nr free The tax applies to income of $108. 1040nr free 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. 1040nr free Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. 1040nr free Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. 1040nr free Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. 1040nr free S. 1040nr free Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. 1040nr free A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. 1040nr free See Forms 990 and 990-EZ , earlier. 1040nr free Political organization. 1040nr free A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. 1040nr free Exempt function. 1040nr free An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. 1040nr free It also includes certain office expenses of a holder of public office or an office in a political organization. 1040nr free Certain political organizations are required to notify the IRS that they are section 527 organizations. 1040nr free These organizations must use Form 8871. 1040nr free Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. 1040nr free For a discussion on these forms, see Reporting Requirements for a Political Organization, later. 1040nr free Political organization taxable income. 1040nr free Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. 1040nr free To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. 1040nr free Exempt organization not a political organization. 1040nr free An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. 1040nr free These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. 1040nr free Separate fund. 1040nr free A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. 1040nr free The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. 1040nr free Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. 1040nr free Due date. 1040nr free Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. 1040nr free Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. 1040nr free If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. 1040nr free Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. 1040nr free Extension of time to file. 1040nr free Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. 1040nr free The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. 1040nr free Failure to file. 1040nr free A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. 1040nr free For more information about filing Form 1120-POL, refer to the instructions accompanying the form. 1040nr free Failure to pay on time. 1040nr free An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. 1040nr free The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. 1040nr free Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. 1040nr free The organization is also required to periodically report certain contributions received and expenditures made by the organization. 1040nr free To notify the IRS of section 527 treatment, an organization must file Form 8871. 1040nr free To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. 1040nr free Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. 1040nr free However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. 1040nr free It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. 1040nr free S. 1040nr free C. 1040nr free 431(4)). 1040nr free It is a state or local candidate committee. 1040nr free It is a state or local committee of a political party. 1040nr free It is a section 501(c) organization that has made an “exempt function expenditure. 1040nr free ” All other political organizations are required to file Form 8871. 1040nr free An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. 1040nr free Employer identification number. 1040nr free If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. 1040nr free IRS. 1040nr free gov/businesses/small. 1040nr free By telephone at 1-800-829-4933 from 7:00 a. 1040nr free m. 1040nr free to 10:00 p. 1040nr free m. 1040nr free in the organization's local time zone. 1040nr free By mailing or faxing Form SS-4. 1040nr free 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. 1040nr free Due dates. 1040nr free The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. 1040nr free If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. 1040nr free When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. 1040nr free If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. 1040nr free How to file. 1040nr free An organization must file Form 8871 electronically via the IRS Internet website at www. 1040nr free IRS. 1040nr free gov/polorgs (Keyword: political orgs). 1040nr free Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. 1040nr free After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. 1040nr free Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. 1040nr free Penalties Failure to file. 1040nr free An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. 1040nr free Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. 1040nr free Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. 1040nr free If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. 1040nr free The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. 1040nr free Fraudulent returns. 1040nr free Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. 1040nr free Waiver of penalties. 1040nr free The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. 1040nr free Additional information. 1040nr free For more information on Form 8871, see the form and its instructions. 1040nr free For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. 1040nr free Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). 1040nr free A political organization that is subject to tax on its income because it did not file or amend Form 8871. 1040nr free A qualified state or local political organization (QSLPO), discussed below. 1040nr free All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. 1040nr free Qualified state or local political organization. 1040nr free A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). 1040nr free It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. 1040nr free The state agency and the organization make the reports publicly available. 1040nr free No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. 1040nr free Information required on Form 8872. 1040nr free If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. 1040nr free If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. 1040nr free For additional information that is required, see Form 8872. 1040nr free Due dates. 1040nr free The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). 1040nr free If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. 1040nr free Election year filing. 1040nr free In election years, Form 8872 must be filed on either a quarterly or a monthly basis. 1040nr free Both a pre-election report and a post-election report are also required to be filed in an election year. 1040nr free An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). 1040nr free Nonelection year filing. 1040nr free In nonelection years, the form must be filed on a semiannual or monthly basis. 1040nr free A complete listing of these filing periods are in the Form 8872 Instructions. 1040nr free A nonelection year is any odd-numbered year. 1040nr free How to file. 1040nr free Form 8872 can be filed either electronically or by mail. 1040nr free However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. 1040nr free To file by mail, send Form 8872 to the: Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. 1040nr free File electronically via the IRS internet website at www. 1040nr free IRS. 1040nr free gov/polorgs. 1040nr free You will need a user ID and password to electronically file Form 8872. 1040nr free Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. 1040nr free Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. 1040nr free If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. 1040nr free You can also fax your request to (801) 620-3249. 1040nr free It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. 1040nr free Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. 1040nr free The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. 1040nr free Fraudulent returns. 1040nr free Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. 1040nr free Waiver of penalties. 1040nr free The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. 1040nr free Donee Information Return Dispositions of donated property. 1040nr free If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. 1040nr free However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. 1040nr free Form 8282 must be filed with the IRS within 125 days after the disposition. 1040nr free Additionally, a copy of Form 8282 must be given to the donor. 1040nr free If the organization fails to file the required information return, penalties may apply. 1040nr free Charitable deduction property. 1040nr free This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. 1040nr free Publicly traded securities. 1040nr free These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. 1040nr free Appraisal summary. 1040nr free If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. 1040nr free below. 1040nr free Exceptions. 1040nr free A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. 1040nr free 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. 1040nr free The donee organization is not a qualified appraiser for the purpose of valuing the donated property. 1040nr free For more information, get Publication 561, Determining the Value of Donated Property. 1040nr free Form 8283. 1040nr free For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. 1040nr free The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. 1040nr free The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. 1040nr free The signature does not represent concurrence in the appraised value of the contributed property. 1040nr free A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. 1040nr free The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. 1040nr free A copy of Form 8283 must be given to the donee. 1040nr free Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. 1040nr free In other situations, the donee organization is required to provide information to the donor. 1040nr free A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. 1040nr free (See Disclosure statement. 1040nr free later. 1040nr free ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. 1040nr free See Quid pro quo contribution below for an example. 1040nr free Failure to make the required disclosure may result in a penalty to the organization. 1040nr free A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. 1040nr free In certain circumstances, an organization may be able to meet both of these requirements with the same written document. 1040nr free Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. 1040nr free Quid pro quo contribution. 1040nr free A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. 1040nr free Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. 1040nr free Generally, a written statement is required for each payment, whenever the contribution portion is over $75. 1040nr free Example. 1040nr free If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. 1040nr free In this example, the charitable part of the payment is $60. 1040nr free Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. 1040nr free If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. 1040nr free Disclosure statement. 1040nr free The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. 1040nr free The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. 1040nr free If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. 1040nr free No disclosure statement is required if any of the following are true. 1040nr free The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. 1040nr free B. 1040nr free 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. 1040nr free B. 1040nr free 507 (as adjusted for inflation), Revenue Procedure 92-49. 1040nr free There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). 1040nr free There is only an intangible religious benefit provided to the donor. 1040nr free The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. 1040nr free For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. 1040nr free A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. 1040nr free The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. 1040nr free Good faith estimate of fair market value (FMV). 1040nr free An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. 1040nr free The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. 1040nr free Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. 1040nr free Example 1. 1040nr free A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. 1040nr free The tennis professional provides 1-hour lessons on a commercial basis for $100. 1040nr free A good faith estimate of the lesson's FMV is $100. 1040nr free Example 2. 1040nr free For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. 1040nr free A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. 1040nr free If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. 1040nr free Example 3. 1040nr free For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. 1040nr free The artist does not provide tours on a commercial basis. 1040nr free Tours of the museum normally are free to the public. 1040nr free A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. 1040nr free Penalty for failure to disclose. 1040nr free A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. 1040nr free The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. 1040nr free The charity can avoid the penalty if it can show that the failure was due to reasonable cause. 1040nr free Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. 1040nr free The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. 1040nr free The donor is responsible for requesting and obtaining the written acknowledgment from the donee. 1040nr free A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. 1040nr free Quid pro quo contribution. 1040nr free If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. 1040nr free See Disclosure of Quid Pro Quo Contributions earlier. 1040nr free Form of acknowledgment. 1040nr free Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. 1040nr free For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. 1040nr free Cash contributions. 1040nr free To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. 1040nr free In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. 1040nr free Contributions by payroll deduction. 1040nr free An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. 1040nr free For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. 1040nr free The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. 1040nr free Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. 1040nr free The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. 1040nr free See section 3. 1040nr free 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. 1040nr free Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. 1040nr free The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. 1040nr free The organization must file the report on Copy A of Form 1098-C. 1040nr free An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. 1040nr free S. 1040nr free Information Returns. 1040nr free See the Instructions for Form 1096 for the correct filing location. 1040nr free An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. 1040nr free Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. 1040nr free IRS. 1040nr free gov/pub/irs-pdf/p1220. 1040nr free pdf. 1040nr free Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. 1040nr free However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. 1040nr free See the Instructions for Form 1098-C. 1040nr free Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. 1040nr free The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. 1040nr free For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. 1040nr free R. 1040nr free B. 1040nr free 1287, at www. 1040nr free irs. 1040nr free gov/irb/2005-25_IRB/2005-25_IRB/ar09. 1040nr free html. 1040nr free Material improvements or significant intervening use. 1040nr free To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. 1040nr free Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. 1040nr free For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. 1040nr free Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. 1040nr free Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. 1040nr free Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. 1040nr free Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. 1040nr free To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. 1040nr free Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. 1040nr free Penalties. 1040nr free If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. 1040nr free Other penalties may apply. 1040nr free See Part O in the 2012 General Instructions for Certain Information Returns. 1040nr free An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. 1040nr free If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. 1040nr free Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. 1040nr free The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. 1040nr free 6%. 1040nr free The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. 1040nr free 6%. 1040nr free Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. 1040nr free The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. 1040nr free To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. 1040nr free Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. 1040nr free Form 8899. 1040nr free Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. 1040nr free This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. 1040nr free Qualified donee income. 1040nr free Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. 1040nr free Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of
Tax Relief for Victims of Tropical Storm Irene in New Hampshire
E-file to Remain Open through Oct. 31 for Victims of Tropical Storm Irene
NH-2011-31, Sept. 8, 2011
BOSTON — Victims of Tropical Storm Irene that began on Aug. 27, 2011 in parts of New Hampshire may qualify for tax relief from the Internal Revenue Service.
The President has declared the following counties a federal disaster area: Carroll and Grafton. Individuals who reside or have a business in these counties may qualify for tax relief.
The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 27, and on or before Oct. 31, have been postponed to Oct. 31, 2011. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.
In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 27, and on or before Sept. 12, as long as the deposits are made by Sept. 12, 2011.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.
The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.
Covered Disaster Area
The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.
Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.
Grant of Relief
Under section 7508A, the IRS gives affected taxpayers until Oct. 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 27 and on or before Oct. 31.
The IRS also gives affected taxpayers until Oct. 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 27 and on or before Oct. 31.
This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.
The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 27 and on or before Sept. 12 provided the taxpayer makes these deposits by Sept. 12.
Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.
Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “New Hampshire/Tropical Storm Irene” at the top of the form so that the IRS can expedite the processing of the refund.
The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.
Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.
Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.
Page Last Reviewed or Updated: 20-Mar-2014
The 1040nr Free
1040nr free Publication 536 - Additional Material Prev Up Next Home More Online Publications