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2012 Irs Form 1040 Ez

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2012 Irs Form 1040 Ez

2012 irs form 1040 ez Internal Revenue Bulletin:  2009-17  April 27, 2009  Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2009-24 Table of Contents SECTION 1. 2012 irs form 1040 ez PURPOSE SECTION 2. 2012 irs form 1040 ez BACKGROUND SECTION 3. 2012 irs form 1040 ez SCOPE SECTION 4. 2012 irs form 1040 ez APPLICATION. 2012 irs form 1040 ez 01 In General. 2012 irs form 1040 ez . 2012 irs form 1040 ez 02 Limitations on Depreciation Deductions for Certain Automobiles. 2012 irs form 1040 ez . 2012 irs form 1040 ez 03 Inclusions in Income of Lessees of Passenger Automobiles. 2012 irs form 1040 ez SECTION 5. 2012 irs form 1040 ez EFFECTIVE DATE SECTION 6. 2012 irs form 1040 ez DRAFTING INFORMATION SECTION 1. 2012 irs form 1040 ez PURPOSE . 2012 irs form 1040 ez 01 This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2009, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2009, including a separate table of inclusion amounts for lessees of trucks and vans. 2012 irs form 1040 ez . 2012 irs form 1040 ez 02 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. 2012 irs form 1040 ez SECTION 2. 2012 irs form 1040 ez BACKGROUND . 2012 irs form 1040 ez 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year that the passenger automobile is placed in service by the taxpayer and each succeeding year. 2012 irs form 1040 ez Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. 2012 irs form 1040 ez The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. 2012 irs form 1040 ez This change reflects the higher rate of price inflation that trucks and vans have been subject to since 1988. 2012 irs form 1040 ez . 2012 irs form 1040 ez 02 Section 168(k)(1)(A) provides a 50 percent additional first year depreciation deduction for certain new property acquired by a taxpayer after December 31, 2007, and before January 1, 2010, if no written binding contract for the acquisition of the property existed before January 1, 2008. 2012 irs form 1040 ez Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A) by $8,000 for passenger automobiles to which the 50 percent additional first year depreciation deduction applies. 2012 irs form 1040 ez . 2012 irs form 1040 ez 03 Section 168(k)(2)(D)(i) provides that the 50 percent additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). 2012 irs form 1040 ez Section 168(k)(2)(D)(iii) permits a taxpayer to elect to not claim the 50 percent additional first year depreciation deduction for any class of property. 2012 irs form 1040 ez Section 168(k)(4) permits a corporation to elect to not claim the 50 percent additional first year depreciation deduction for all eligible qualified property (that is extension property or that is not extension property, as applicable) and instead to increase the business credit limitation under § 38(c) or the alternative minimum tax credit limitation under § 53(c). 2012 irs form 1040 ez Accordingly, this revenue procedure provides tables for passenger automobiles for which the 50 percent additional depreciation deduction applies and tables for passenger automobiles for which the 50 percent additional first year depreciation deduction does not apply, including passenger automobiles in a class of property for which the taxpayer “elects out” of the 50 percent additional first year depreciation deduction or passenger automobiles that are eligible qualified property to which the § 168(k)(4) election applies. 2012 irs form 1040 ez . 2012 irs form 1040 ez 04 For leased passenger automobiles, § 280F(c) requires a reduction in the deduction allowed to the lessee of the passenger automobile. 2012 irs form 1040 ez The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. 2012 irs form 1040 ez Under § 1. 2012 irs form 1040 ez 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. 2012 irs form 1040 ez One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. 2012 irs form 1040 ez Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. 2012 irs form 1040 ez SECTION 3. 2012 irs form 1040 ez SCOPE . 2012 irs form 1040 ez 01 The limitations on depreciation deductions in section 4. 2012 irs form 1040 ez 02(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2009, and continue to apply for each taxable year that the passenger automobile remains in service. 2012 irs form 1040 ez . 2012 irs form 1040 ez 02 The tables in section 4. 2012 irs form 1040 ez 03 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2009. 2012 irs form 1040 ez Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. 2012 irs form 1040 ez See Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2002-14, 2002-1 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 450, for passenger automobiles first leased before January 1, 2003, Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2003-75, 2003-2 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 1018, for passenger automobiles first leased during calendar year 2003, Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2004-20, 2004-1 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 642, for passenger automobiles first leased during calendar year 2004, Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2005-13, 2005-1 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 759, for passenger automobiles first leased during calendar year 2005, Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2006-18, 2006-1 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 645, for passenger automobiles first leased during calendar year 2006, Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2007-30, 2007-1 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 1104, for passenger automobiles first leased during calendar year 2007, and Rev. 2012 irs form 1040 ez Proc. 2012 irs form 1040 ez 2008-22, 2008-12 I. 2012 irs form 1040 ez R. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 658, for passenger automobiles first leased during calendar year 2008. 2012 irs form 1040 ez SECTION 4. 2012 irs form 1040 ez APPLICATION . 2012 irs form 1040 ez 01 In General. 2012 irs form 1040 ez (1) Limitations on depreciation deductions for certain automobiles. 2012 irs form 1040 ez The limitations on depreciation deductions for passenger automobiles placed in service by the taxpayer for the first time during calendar year 2009 are in Tables 1 through 4 in section 4. 2012 irs form 1040 ez 02(2) of this revenue procedure. 2012 irs form 1040 ez (2) Inclusions in income of lessees of passenger automobiles. 2012 irs form 1040 ez A taxpayer first leasing a passenger automobile during calendar year 2009 must determine the inclusion amount that is added to gross income using Tables 5 and 6 in section 4. 2012 irs form 1040 ez 03 of this revenue procedure. 2012 irs form 1040 ez In addition, the taxpayer must follow the procedures of § 1. 2012 irs form 1040 ez 280F-7(a). 2012 irs form 1040 ez . 2012 irs form 1040 ez 02 Limitations on Depreciation Deductions for Certain Automobiles. 2012 irs form 1040 ez (1) Amount of the inflation adjustment. 2012 irs form 1040 ez (a) Passenger automobiles (other than trucks or vans). 2012 irs form 1040 ez Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. 2012 irs form 1040 ez The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. 2012 irs form 1040 ez The new car component of the CPI was 115. 2012 irs form 1040 ez 2 for October 1987 and 134. 2012 irs form 1040 ez 837 for October 2008. 2012 irs form 1040 ez The October 2008 index exceeded the October 1987 index by 19. 2012 irs form 1040 ez 637. 2012 irs form 1040 ez The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 2009 for passenger automobiles (other than trucks and vans) is 17. 2012 irs form 1040 ez 05 percent (19. 2012 irs form 1040 ez 637/115. 2012 irs form 1040 ez 2 x 100%). 2012 irs form 1040 ez This adjustment is applicable to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2009. 2012 irs form 1040 ez The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0. 2012 irs form 1040 ez 1705, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2009. 2012 irs form 1040 ez (b) Trucks and vans. 2012 irs form 1040 ez To determine the dollar limitations applicable to trucks and vans first placed in service during calendar year 2009, the new truck component of the CPI is used instead of the new car component. 2012 irs form 1040 ez The new truck component of the CPI was 112. 2012 irs form 1040 ez 4 for October 1987 and 133. 2012 irs form 1040 ez 640 for October 2008. 2012 irs form 1040 ez The October 2008 index exceeded the October 1987 index by 21. 2012 irs form 1040 ez 24. 2012 irs form 1040 ez The Service has, therefore, determined that the automobile price inflation adjustment for 2009 for trucks and vans is 18. 2012 irs form 1040 ez 90 percent (21. 2012 irs form 1040 ez 24/112. 2012 irs form 1040 ez 4 x 100%). 2012 irs form 1040 ez This adjustment is applicable to all trucks and vans that are first placed in service in calendar year 2009. 2012 irs form 1040 ez The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0. 2012 irs form 1040 ez 1890, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to trucks and vans. 2012 irs form 1040 ez (2) Amount of the limitation. 2012 irs form 1040 ez For passenger automobiles placed in service by the taxpayer in calendar year 2009, Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year. 2012 irs form 1040 ez Use Table 1 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a passenger automobile (other than a truck or van) in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a passenger automobile that is eligible qualified property to which the § 168(k)(4) election applies. 2012 irs form 1040 ez Use Table 2 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. 2012 irs form 1040 ez Use Table 3 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a truck or van in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a truck or van that is eligible qualified property to which the § 168(k)(4) election applies. 2012 irs form 1040 ez Use Table 4 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. 2012 irs form 1040 ez REV. 2012 irs form 1040 ez PROC. 2012 irs form 1040 ez 2009-24 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $2,960 2nd Tax Year $4,800 3rd Tax Year $2,850 Each Succeeding Year $1,775 REV. 2012 irs form 1040 ez PROC. 2012 irs form 1040 ez 2009-24 TABLE 2 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $10,960 2nd Tax Year $4,800 3rd Tax Year $2,850 Each Succeeding Year $1,775 REV. 2012 irs form 1040 ez PROC. 2012 irs form 1040 ez 2009-24 TABLE 3 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. 2012 irs form 1040 ez PROC. 2012 irs form 1040 ez 2009-24 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 . 2012 irs form 1040 ez 03 Inclusions in Income of Lessees of Passenger Automobiles. 2012 irs form 1040 ez The inclusion amounts for passenger automobiles first leased in calendar year 2009 are calculated under the procedures described in § 1. 2012 irs form 1040 ez 280F-7(a). 2012 irs form 1040 ez Lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure in applying these procedures, while lessees of trucks and vans should use Table 6 of this revenue procedure. 2012 irs form 1040 ez REV. 2012 irs form 1040 ez PROC. 2012 irs form 1040 ez 2009-24 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 9 19 28 34 38 19,000 19,500 10 21 32 38 43 19,500 20,000 11 24 36 42 48 20,000 20,500 12 27 39 46 54 20,500 21,000 13 29 43 51 58 21,000 21,500 15 31 47 55 64 21,500 22,000 16 34 50 60 68 22,000 23,000 17 38 56 66 76 23,000 24,000 20 42 64 75 86 24,000 25,000 22 47 71 84 96 25,000 26,000 24 52 78 93 107 26,000 27,000 26 58 85 101 117 27,000 28,000 29 62 93 110 127 28,000 29,000 31 67 100 119 138 29,000 30,000 33 72 108 128 147 30,000 31,000 35 77 115 137 157 31,000 32,000 38 82 122 146 167 32,000 33,000 40 87 129 155 178 33,000 34,000 42 92 137 163 188 34,000 35,000 44 97 144 172 199 35,000 36,000 47 102 151 181 208 36,000 37,000 49 107 159 189 219 37,000 38,000 51 112 166 199 228 38,000 39,000 53 117 173 208 239 39,000 40,000 56 122 180 216 250 40,000 41,000 58 127 188 225 259 41,000 42,000 60 132 195 234 269 42,000 43,000 62 137 203 242 280 43,000 44,000 65 141 210 252 290 44,000 45,000 67 146 218 260 300 45,000 46,000 69 151 225 269 311 46,000 47,000 71 157 232 278 320 47,000 48,000 74 161 240 286 331 48,000 49,000 76 166 247 296 340 49,000 50,000 78 171 255 304 351 50,000 51,000 80 176 262 313 361 51,000 52,000 83 181 269 322 371 52,000 53,000 85 186 276 331 381 53,000 54,000 87 191 284 339 392 54,000 55,000 89 196 291 349 401 55,000 56,000 92 201 298 357 412 56,000 57,000 94 206 306 365 423 57,000 58,000 96 211 313 375 432 58,000 59,000 98 216 320 384 442 59,000 60,000 101 221 327 393 452 60,000 62,000 104 228 339 406 467 62,000 64,000 109 238 353 424 488 64,000 66,000 113 248 368 441 509 66,000 68,000 118 258 382 459 529 68,000 70,000 122 268 397 476 550 70,000 72,000 127 277 413 493 570 72,000 74,000 131 288 427 511 590 74,000 76,000 136 297 442 529 610 76,000 78,000 140 307 457 546 631 78,000 80,000 145 317 471 564 651 80,000 85,000 152 335 497 595 686 85,000 90,000 164 359 534 639 737 90,000 95,000 175 384 570 683 789 95,000 100,000 186 409 607 727 839 100,000 110,000 203 446 662 793 916 110,000 120,000 226 495 736 881 1,018 120,000 130,000 248 545 809 970 1,119 130,000 140,000 271 594 883 1,058 1,220 140,000 150,000 293 644 956 1,146 1,322 150,000 160,000 316 693 1,030 1,234 1,424 160,000 170,000 338 743 1,103 1,322 1,526 170,000 180,000 361 792 1,177 1,410 1,628 180,000 190,000 383 842 1,250 1,498 1,730 190,000 200,000 406 891 1,324 1,586 1,831 200,000 210,000 428 941 1,397 1,675 1,932 210,000 220,000 451 990 1,471 1,762 2,035 220,000 230,000 473 1,040 1,544 1,851 2,136 230,000 240,000 496 1,089 1,618 1,939 2,238 240,000 And up 518 1,139 1,691 2,027 2,340 REV. 2012 irs form 1040 ez PROC. 2012 irs form 1040 ez 2009-24 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009 Fair Market Value of Electric Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th and Later $18,500 $19,000 8 17 25 30 35 19,000 19,500 9 19 29 35 40 19,500 20,000 10 22 33 38 45 20,000 20,500 11 25 36 43 50 20,500 21,000 12 27 40 48 55 21,000 21,500 13 30 43 52 60 21,500 22,000 15 32 47 56 66 22,000 23,000 16 36 52 64 72 23,000 24,000 18 41 60 72 83 24,000 25,000 21 45 68 81 93 25,000 26,000 23 50 75 90 103 26,000 27,000 25 56 82 98 114 27,000 28,000 27 61 89 107 124 28,000 29,000 30 65 97 116 134 29,000 30,000 32 70 104 125 144 30,000 31,000 34 75 112 134 154 31,000 32,000 36 80 119 143 164 32,000 33,000 39 85 126 151 175 33,000 34,000 41 90 134 160 184 34,000 35,000 43 95 141 169 195 35,000 36,000 45 100 148 178 205 36,000 37,000 48 105 155 187 215 37,000 38,000 50 110 163 195 226 38,000 39,000 52 115 170 204 236 39,000 40,000 55 120 177 213 246 40,000 41,000 57 125 185 221 256 41,000 42,000 59 130 192 231 266 42,000 43,000 61 135 199 240 276 43,000 44,000 64 139 207 249 286 44,000 45,000 66 144 215 257 296 45,000 46,000 68 149 222 266 307 46,000 47,000 70 155 229 274 317 47,000 48,000 73 159 237 283 327 48,000 49,000 75 164 244 292 338 49,000 50,000 77 169 251 301 348 50,000 51,000 79 174 259 310 357 51,000 52,000 82 179 266 318 368 52,000 53,000 84 184 273 328 378 53,000 54,000 86 189 281 336 388 54,000 55,000 88 194 288 345 399 55,000 56,000 91 199 295 354 408 56,000 57,000 93 204 302 363 419 57,000 58,000 95 209 310 371 429 58,000 59,000 97 214 317 381 439 59,000 60,000 100 219 324 389 450 60,000 62,000 103 226 336 402 465 62,000 64,000 107 236 351 420 485 64,000 66,000 112 246 365 438 505 66,000 68,000 116 256 380 455 526 68,000 70,000 121 266 394 473 546 70,000 72,000 125 276 409 491 566 72,000 74,000 130 286 423 509 586 74,000 76,000 134 296 438 526 607 76,000 78,000 139 305 454 543 627 78,000 80,000 143 316 467 561 648 80,000 85,000 151 333 493 592 684 85,000 90,000 163 357 531 635 735 90,000 95,000 174 382 567 680 785 95,000 100,000 185 407 604 724 836 100,000 110,000 202 444 659 790 912 110,000 120,000 225 493 733 878 1,014 120,000 130,000 247 543 806 966 1,116 130,000 140,000 270 592 880 1,054 1,218 140,000 150,000 292 642 953 1,143 1,319 150,000 160,000 315 691 1,027 1,230 1,421 160,000 170,000 337 741 1,100 1,319 1,522 170,000 180,000 360 790 1,174 1,407 1,624 180,000 190,000 382 840 1,247 1,495 1,726 190,000 200,000 405 889 1,321 1,583 1,828 200,000 210,000 427 939 1,394 1,671 1,930 210,000 220,000 450 988 1,468 1,759 2,031 220,000 230,000 472 1,038 1,541 1,847 2,134 230,000 240,000 495 1,087 1,615 1,935 2,235 240,000 and up 517 1,137 1,688 2,024 2,336 SECTION 5. 2012 irs form 1040 ez EFFECTIVE DATE This revenue procedure applies to passenger automobiles (other than leased passenger automobiles) that are first placed in service by a taxpayer during calendar year 2009, and to leased passenger automobiles that are first leased by a taxpayer during calendar year 2009. 2012 irs form 1040 ez SECTION 6. 2012 irs form 1040 ez DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. 2012 irs form 1040 ez Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). 2012 irs form 1040 ez For further information regarding this revenue procedure, contact Mr. 2012 irs form 1040 ez Harvey at (202) 622-4930 (not a toll-free call). 2012 irs form 1040 ez Prev  Up  Next   Home   More Internal Revenue Bulletins

Topic 305 - Recordkeeping

Well-organized records make it easier to prepare a tax return and help provide answers if your return is selected for examination, or to prepare a response if you receive an IRS notice.

Records such as receipts, canceled checks, and other documents that support an item of income or a deduction, or a credit appearing on a return must be kept so long as they may become material in the administration of any internal revenue law, which generally will be until the period of limitation expires for that return. For assessment of tax you owe, this generally is 3 years from the date you filed the return. Returns filed before the due date are treated as filed on the due date.

There is no period of limitations to assess tax when a return is fraudulent or when no return is filed. If income that you should have reported is not reported, and it is more than 25% of the gross income shown on the return, the time to assess is 6 years from when the return is filed. For filing a claim for credit or refund, the period to make the claim generally is 3 years from the date the original return was filed (or the due date for filing the return if the return was filed before that date), or 2 years from the date the tax was paid, whichever is later. For filing a claim for an overpayment resulting from a bad debt deduction or a loss from worthless securities the time to make the claim is 7 years from when the return was due.

If you have employees, you must keep all your employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later. For more information, see Publication 15, (Circular E), Employer's Tax Guide.

If you are in business, there is no particular method of bookkeeping you must use. However, you must use a method that clearly and accurately reflects your gross income and expenses. The records should substantiate both your income and expenses. Publication 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses, provide additional information on required documentation for taxpayers with business expenses. Publication 17, Your Federal Income Tax for Individuals, provides more information on recordkeeping requirements for individuals.

Page Last Reviewed or Updated: January 22, 2014

The 2012 Irs Form 1040 Ez

2012 irs form 1040 ez 3. 2012 irs form 1040 ez   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. 2012 irs form 1040 ez Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. 2012 irs form 1040 ez Certain contracts held by a charitable remainder trust. 2012 irs form 1040 ez Excise Taxes. 2012 irs form 1040 ez Indoor tanning services. 2012 irs form 1040 ez Application for Recognition of ExemptionPolitical activity. 2012 irs form 1040 ez Private delivery service. 2012 irs form 1040 ez Amendments to organizing documents required. 2012 irs form 1040 ez How to show reasonable action and good faith. 2012 irs form 1040 ez Not acting reasonably and in good faith. 2012 irs form 1040 ez Prejudicing the interest of the Government. 2012 irs form 1040 ez Procedure for requesting extension. 2012 irs form 1040 ez More information. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Grass roots expenditures. 2012 irs form 1040 ez Lobbying nontaxable amount. 2012 irs form 1040 ez Grass roots nontaxable amount. 2012 irs form 1040 ez Organization that no longer qualifies. 2012 irs form 1040 ez Tax on organization. 2012 irs form 1040 ez Tax on managers. 2012 irs form 1040 ez Taxes on organizations. 2012 irs form 1040 ez Taxes on managers. 2012 irs form 1040 ez Political expenditures. 2012 irs form 1040 ez Correction of expenditure. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Religious. 2012 irs form 1040 ez Charitable. 2012 irs form 1040 ez Scientific. 2012 irs form 1040 ez Testing for public safety. 2012 irs form 1040 ez Literary. 2012 irs form 1040 ez Educational. 2012 irs form 1040 ez 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). 2012 irs form 1040 ez The prevention of cruelty to children or animals. 2012 irs form 1040 ez To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. 2012 irs form 1040 ez A trust is a fund or foundation and will qualify. 2012 irs form 1040 ez However, an individual or a partnership will not qualify. 2012 irs form 1040 ez Examples. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Child care organizations. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Instrumentalities. 2012 irs form 1040 ez   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). 2012 irs form 1040 ez Examples of a qualifying instrumentality might include state schools, universities, or hospitals. 2012 irs form 1040 ez However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. 2012 irs form 1040 ez A state or municipality itself does not qualify for exemption. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Fundraising events. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez See Disclosure of Quid Pro Quo Contributions in chapter 2. 2012 irs form 1040 ez Exemption application not filed. 2012 irs form 1040 ez   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. 2012 irs form 1040 ez Separate fund—contributions that are deductible. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Personal benefit contracts. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Certain annuity contracts. 2012 irs form 1040 ez   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). 2012 irs form 1040 ez Certain contracts held by a charitable remainder trust. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Excise tax. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. 2012 irs form 1040 ez Excise Taxes. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Indoor tanning services. 2012 irs form 1040 ez   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. 2012 irs form 1040 ez For more information, go to IRS. 2012 irs form 1040 ez gov and select Affordable Care Act Tax Provisions. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez See the organization headings that follow for specific information your organization may need to provide. 2012 irs form 1040 ez Form 1023. 2012 irs form 1040 ez   Your organization must file its application for recognition of exemption on Form 1023. 2012 irs form 1040 ez See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. 2012 irs form 1040 ez Some organizations are not required to file Form 1023. 2012 irs form 1040 ez See Organizations Not Required To File Form 1023, later. 2012 irs form 1040 ez    Additional information to help you complete your application can be found online. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez See Exemption Requirements - Section 501(c)(3) Organizations. 2012 irs form 1040 ez   Form 1023 and accompanying statements must show that all of the following are true. 2012 irs form 1040 ez The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. 2012 irs form 1040 ez ) specified in the introduction to this chapter. 2012 irs form 1040 ez No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez See Political activity, next, and Lobbying Expenditures , near the end of this chapter. 2012 irs form 1040 ez Political activity. 2012 irs form 1040 ez   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). 2012 irs form 1040 ez Such participation or intervention includes the publishing or distributing of statements. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Effective date of exemption. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Otherwise, exemption will be recognized only from the date of receipt. 2012 irs form 1040 ez The date of receipt is the date of the U. 2012 irs form 1040 ez S. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Private delivery service. 2012 irs form 1040 ez   If a private delivery service designated by the IRS, rather than the U. 2012 irs form 1040 ez S. 2012 irs form 1040 ez Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. 2012 irs form 1040 ez The following private delivery services have been designated by the IRS. 2012 irs form 1040 ez DHL Express (DHL): DHL “Same Day” Service. 2012 irs form 1040 ez Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. 2012 irs form 1040 ez United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 2012 irs form 1040 ez M. 2012 irs form 1040 ez , UPS Worldwide Express Plus, and UPS Worldwide Express. 2012 irs form 1040 ez Amendments to organizing documents required. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Extensions of time for filing. 2012 irs form 1040 ez   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. 2012 irs form 1040 ez Automatic 12-month extension. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. 2012 irs form 1040 ez 9100-2. 2012 irs form 1040 ez ” Discretionary extensions. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez How to show reasonable action and good faith. 2012 irs form 1040 ez   An organization acted reasonably and showed good faith if at least one of the following is true. 2012 irs form 1040 ez The organization requests relief before its failure to file is discovered by the IRS. 2012 irs form 1040 ez The organization failed to file because of intervening events beyond its control. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The organization reasonably relied upon the written advice of the IRS. 2012 irs form 1040 ez The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Not acting reasonably and in good faith. 2012 irs form 1040 ez   An organization has not acted reasonably and in good faith under the following circumstances. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez It was informed of the requirement to file and related tax consequences, but chose not to file. 2012 irs form 1040 ez It uses hindsight in requesting relief. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Prejudicing the interest of the Government. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Procedure for requesting extension. 2012 irs form 1040 ez   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. 2012 irs form 1040 ez A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. 2012 irs form 1040 ez Any documents relevant to the application. 2012 irs form 1040 ez An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez ” 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. 2012 irs form 1040 ez This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. 2012 irs form 1040 ez The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez ” 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. 2012 irs form 1040 ez   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. 2012 irs form 1040 ez Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. 2012 irs form 1040 ez More information. 2012 irs form 1040 ez   For more information about these procedures, see Regulations sections 301. 2012 irs form 1040 ez 9100-1, 301. 2012 irs form 1040 ez 9100-2, 301. 2012 irs form 1040 ez 9100-3, Revenue Procedure 2013-4, section 6. 2012 irs form 1040 ez 04, 2013-1 I. 2012 irs form 1040 ez R. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 126, and Revenue Procedure 2013-8, 2013-1 I. 2012 irs form 1040 ez R. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 237. 2012 irs form 1040 ez See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. 2012 irs form 1040 ez Notification from the IRS. 2012 irs form 1040 ez   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. 2012 irs form 1040 ez Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). 2012 irs form 1040 ez These organizations are exempt automatically if they meet the requirements of section 501(c)(3). 2012 irs form 1040 ez Filing Form 1023 to establish exemption. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. 2012 irs form 1040 ez A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. 2012 irs form 1040 ez Private foundations. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Gross receipts test. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The organization must file Form 1023 within 90 days after the end of its second tax year. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Example. 2012 irs form 1040 ez   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. 2012 irs form 1040 ez It was incorporated on January 1, 2009, and files returns on a calendar-year basis. 2012 irs form 1040 ez It did not file a Form 1023. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Therefore, it did not have to file Form 1023 and is exempt for those years. 2012 irs form 1040 ez However, for 2010, 2011, and 2012 the total gross receipts were $15,900. 2012 irs form 1040 ez Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. 2012 irs form 1040 ez   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. 2012 irs form 1040 ez See the procedures for this extension discussed earlier. 2012 irs form 1040 ez Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. 2012 irs form 1040 ez This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez These conditions for exemption are referred to as the organizational test. 2012 irs form 1040 ez Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. 2012 irs form 1040 ez 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). 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. 2012 irs form 1040 ez Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. 2012 irs form 1040 ez In interpreting an organization's articles, the law of the state where the organization was created is controlling. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The following are examples illustrating the organizational test. 2012 irs form 1040 ez Example 1. 2012 irs form 1040 ez Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). 2012 irs form 1040 ez These articles appropriately limit the organization's purposes. 2012 irs form 1040 ez The organization meets the organizational test. 2012 irs form 1040 ez Example 2. 2012 irs form 1040 ez An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. 2012 irs form 1040 ez The organization will not be properly limited as to its purposes since all research is not scientific. 2012 irs form 1040 ez The organization does not meet the organizational test. 2012 irs form 1040 ez Example 3. 2012 irs form 1040 ez 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). 2012 irs form 1040 ez The organization meets the organizational test. 2012 irs form 1040 ez Example 4. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Example 5. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Example 6. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Such purposes are vague and may be accomplished other than in an exempt manner. 2012 irs form 1040 ez Example 7. 2012 irs form 1040 ez A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. 2012 irs form 1040 ez A hospital may or may not be exempt depending on the manner in which it is operated. 2012 irs form 1040 ez Example 8. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. 2012 irs form 1040 ez Dedication. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Distribution. 2012 irs form 1040 ez   Revenue Procedure 82-2, 1982-1 C. 2012 irs form 1040 ez B. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Sample articles of organization. 2012 irs form 1040 ez   See sample articles of organization in the Appendix in the back of this publication. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez See also Private Schools , discussed later. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Advocacy of a position. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez The mere presentation of unsupported opinion is not educational. 2012 irs form 1040 ez Method not educational. 2012 irs form 1040 ez   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). 2012 irs form 1040 ez The following factors may indicate that the method is not educational. 2012 irs form 1040 ez The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. 2012 irs form 1040 ez The facts that purport to support the viewpoint are distorted. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Qualifying organizations. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez College book stores, cafeterias, restaurants, etc. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Alumni association. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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 . 2012 irs form 1040 ez Athletic organization. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez If it is not so engaged, your organization may be exempt as a social club described in chapter 4. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. 2012 irs form 1040 ez (This information also must be projected, so far as may be feasible, for the next academic year. 2012 irs form 1040 ez ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. 2012 irs form 1040 ez A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The public school district and county in which the school is located. 2012 irs form 1040 ez How to determine racial composition. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Nevertheless, a statement of the method by which the racial composition was determined must be supplied. 2012 irs form 1040 ez The identity of individual students or members of the faculty and administrative staff should not be included with this information. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Also, the school must circulate information that clearly states the school's admission policies. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Policy statement. 2012 irs form 1040 ez   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Publicity requirement. 2012 irs form 1040 ez   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez To satisfy this requirement, the school must use one of the following two methods. 2012 irs form 1040 ez Method one. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez If this method is used, the notice must meet the following printing requirements. 2012 irs form 1040 ez It must appear in a section of the newspaper likely to be read by prospective students and their families. 2012 irs form 1040 ez It must occupy at least 3 column inches. 2012 irs form 1040 ez It must have its title printed in at least 12 point bold face type. 2012 irs form 1040 ez It must have the remaining text printed in at least 8 point type. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   Method two. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Exceptions. 2012 irs form 1040 ez   The publicity requirements will not apply in the following situations. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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 . 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. 2012 irs form 1040 ez In this regard, it is each school's responsibility to determine whether either of the exceptions applies. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Facilities and programs. 2012 irs form 1040 ez   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. 2012 irs form 1040 ez Scholarship and loan programs. 2012 irs form 1040 ez   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. 2012 irs form 1040 ez This must be known throughout the general community being served by the school and should be referred to in its publicity. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Certification. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. 2012 irs form 1040 ez Recordkeeping requirements. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. 2012 irs form 1040 ez Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. 2012 irs form 1040 ez Copies of all materials used by or on behalf of the school to solicit contributions. 2012 irs form 1040 ez Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. 2012 irs form 1040 ez (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. 2012 irs form 1040 ez ) 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Similarly, the IRS does not require a school to keep records prohibited under state or federal law. 2012 irs form 1040 ez Exceptions. 2012 irs form 1040 ez   The school does not have to independently maintain these records for IRS use if both of the following are true. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The school maintains copies of these reports from which this information is readily obtainable. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Failure to maintain records. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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). 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez The rest of this section contains a description of the information to be provided by certain specific organizations. 2012 irs form 1040 ez This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. 2012 irs form 1040 ez Each of the following organizations must submit the information described. 2012 irs form 1040 ez Charitable organization supporting education. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Scholarships. 2012 irs form 1040 ez   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. 2012 irs form 1040 ez Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. 2012 irs form 1040 ez How and by whom the recipients are or will be selected. 2012 irs form 1040 ez If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez A copy of the scholarship application form and any brochures or literature describing the scholarship program. 2012 irs form 1040 ez Hospital. 2012 irs form 1040 ez   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. 2012 irs form 1040 ez   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Submit also an appraisal showing the fair rental value of the rented space. 2012 irs form 1040 ez Clinic. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Home for the aged. 2012 irs form 1040 ez   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. 2012 irs form 1040 ez Community nursing bureau. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Organization providing loans. 2012 irs form 1040 ez   If you make, or will make, loans for charitable and educational purposes, submit the following information. 2012 irs form 1040 ez An explanation of the circumstances under which such loans are, or will be, made. 2012 irs form 1040 ez Criteria for selection, including the rules of eligibility. 2012 irs form 1040 ez How and by whom the recipients are or will be selected. 2012 irs form 1040 ez Manner of repayment of the loan. 2012 irs form 1040 ez Security required, if any. 2012 irs form 1040 ez Interest charged, if any, and when payable. 2012 irs form 1040 ez Copies in duplicate of the loan application and any brochures or literature describing the loan program. 2012 irs form 1040 ez Public-interest law firms. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. 2012 irs form 1040 ez Whether the organization will accept fees for its services. 2012 irs form 1040 ez A description of the cases litigated or to be litigated and how they benefit the public generally. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Acceptance of attorneys' fees. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez All fee awards must be paid to the organization and not to its individual staff attorneys. 2012 irs form 1040 ez Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. 2012 irs form 1040 ez That the particular religious beliefs of the organization are truly and sincerely held. 2012 irs form 1040 ez That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Churches. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. 2012 irs form 1040 ez Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. 2012 irs form 1040 ez The IRS considers the facts and circumstances of each organization applying for church status. 2012 irs form 1040 ez Convention or association of churches. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Integrated auxiliaries. 2012 irs form 1040 ez   An organization is an integrated auxiliary of a church if all the following are true. 2012 irs form 1040 ez The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). 2012 irs form 1040 ez It is affiliated with a church or a convention or association of churches. 2012 irs form 1040 ez It is internally supported. 2012 irs form 1040 ez An organization is internally supported unless both of the following are true. 2012 irs form 1040 ez 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). 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Special rule. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez   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. 2012 irs form 1040 ez Scientific Organizations You must show that your organization's research will be carried on in the public interest. 2012 irs form 1040 ez 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. 2012 irs form 1040 ez Aiding in the scientific education of college or university students. 2012 irs form 1040 ez Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th