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H&r block free tax prep Publication 555 - Main Content Table of Contents Domicile Community or Separate Property and Income Identifying Income, Deductions, and CreditsIncome Exemptions Deductions Credits, Taxes, and Payments Community Property Laws DisregardedRequesting relief. H&r block free tax prep Equitable relief. H&r block free tax prep Earned income. H&r block free tax prep Trade or business income. H&r block free tax prep Partnership income or loss. H&r block free tax prep Separate property income. H&r block free tax prep Social security benefits. H&r block free tax prep Other income. H&r block free tax prep End of the Community Preparing a Federal Income Tax ReturnJoint Return Versus Separate Returns Separate Return Preparation How To Get Tax HelpLow Income Taxpayer Clinics Domicile Whether you have community property and community income depends on the state where you are domiciled. H&r block free tax prep If you and your spouse (or your registered domestic partner) have different domiciles, check the laws of each to see whether you have community property or community income. H&r block free tax prep You have only one domicile even if you have more than one home. H&r block free tax prep Your domicile is a permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. H&r block free tax prep The question of your domicile is mainly a matter of your intention as indicated by your actions. H&r block free tax prep You must be able to show that you intend a given place or state to be your permanent home. H&r block free tax prep If you move into or out of a community property state during the year, you may or may not have community income. H&r block free tax prep Factors considered in determining domicile include: Where you pay state income tax, Where you vote, Location of property you own, Your citizenship, Length of residence, and Business and social ties to the community. H&r block free tax prep Amount of time spent. H&r block free tax prep    The amount of time spent in one place does not always explain the difference between home and domicile. H&r block free tax prep A temporary home or residence may continue for months or years while a domicile may be established the first moment you occupy the property. H&r block free tax prep Your intent is the determining factor in proving where you have your domicile. H&r block free tax prep    Note. H&r block free tax prep When this publication refers to where you live, it means your domicile. H&r block free tax prep Community or Separate Property and Income If you file a federal tax return separately from your spouse, you must report half of all community income and all of your separate income. H&r block free tax prep Likewise, a registered domestic partner must report half of all community income and all of his or her separate income on his or her federal tax return. H&r block free tax prep You each must attach your Form 8958 to your Form 1040 showing how you figured the amount you are reporting on your return. H&r block free tax prep Generally, the laws of the state in which you are domiciled govern whether you have community property and community income or separate property and separate income for federal tax purposes. H&r block free tax prep The following is a summary of the general rules. H&r block free tax prep These rules are also shown in Table 1. H&r block free tax prep Community property. H&r block free tax prep    Generally, community property is property: That you, your spouse (or your registered domestic partner), or both acquire during your marriage (or registered domestic partnership) while you and your spouse (or your registered domestic partner) are domiciled in a community property state. H&r block free tax prep That you and your spouse (or your registered domestic partner) agreed to convert from separate to community property. H&r block free tax prep That cannot be identified as separate property. H&r block free tax prep Community income. H&r block free tax prep    Generally, community income is income from: Community property. H&r block free tax prep Salaries, wages, and other pay received for the services performed by you, your spouse (or your registered domestic partner), or both during your marriage (or registered domestic partnership) while domiciled in a community property state. H&r block free tax prep Real estate that is treated as community property under the laws of the state where the property is located. H&r block free tax prep Note Separate property. H&r block free tax prep    Generally, separate property is: Property that you or your spouse (or your registered domestic partner) owned separately before your marriage (or registered domestic partnership). H&r block free tax prep Money earned while domiciled in a noncommunity property state. H&r block free tax prep Property that you or your spouse (or your registered domestic partner) received separately as a gift or inheritance during your marriage (or registered domestic partnership). H&r block free tax prep Property that you or your spouse (or your registered domestic partner) bought with separate funds, or acquired in exchange for separate property, during your marriage (or registered domestic partnership). H&r block free tax prep Property that you and your spouse (or your registered domestic partner) converted from community property to separate property through an agreement valid under state law. H&r block free tax prep The part of property bought with separate funds, if part was bought with community funds and part with separate funds. H&r block free tax prep Separate income. H&r block free tax prep    Generally, income from separate property is the separate income of the spouse (or the registered domestic partner) who owns the property. H&r block free tax prep    In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. H&r block free tax prep Table 1. H&r block free tax prep General Rules — Property and Income: Community or Separate? Community property is property: That you, your spouse (or your registered domestic partner), or both acquire during your marriage (or registered domestic partnership) while you and your spouse (or your registered domestic partner) are domiciled in a community property state. H&r block free tax prep (Includes the part of property bought with community property funds if part was bought with community funds and part with separate funds. H&r block free tax prep ) That you and your spouse (or your registered domestic partner) agreed to convert from separate to community property. H&r block free tax prep That cannot be identified as separate property. H&r block free tax prep Separate property is: Property that you or your spouse (or your registered domestic partner) owned separately before your marriage (or registered domestic partnership). H&r block free tax prep Money earned while domiciled in a noncommunity property state. H&r block free tax prep Property either of you received as a gift or inherited separately during your marriage (or registered domestic partnership). H&r block free tax prep Property bought with separate funds, or exchanged for separate property, during your marriage (or registered domestic partnership). H&r block free tax prep Property that you and your spouse (or your registered domestic partner) agreed to convert from community to separate property through an agreement valid under state law. H&r block free tax prep The part of property bought with separate funds, if part was bought with community funds and part with separate funds. H&r block free tax prep Community income 1,2,3 is income from: Community property. H&r block free tax prep Salaries, wages, or pay for services of you, your spouse (or your registered domestic partner), or both during your marriage (or registered domestic partnership) while domiciled in a community property state. H&r block free tax prep Real estate that is treated as community property under the laws of the state where the property is located. H&r block free tax prep Separate income 1,2 is income from: Separate property which belongs to the spouse (or registered domestic partner) who owns the property. H&r block free tax prep 1In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. H&r block free tax prep 2Check your state law if you are separated but do not meet the conditions discussed in Spouses living apart all year , later. H&r block free tax prep In some states, the income you earn after you are separated and before a divorce decree is issued continues to be community income. H&r block free tax prep In other states, it is separate income. H&r block free tax prep 3Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations. H&r block free tax prep See Community Property Laws Disregarded , later. H&r block free tax prep Identifying Income, Deductions, and Credits If you file separate returns, you and your spouse (or your registered domestic partner) each must attach your Form 8958 to your Form 1040 to identify your community and separate income, deductions, credits, and other return amounts according to the laws of your state. H&r block free tax prep Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations. H&r block free tax prep See Community Property Laws Disregarded, later. H&r block free tax prep Check your state law if you are separated but do not meet the conditions discussed in Spouses living apart all year, later. H&r block free tax prep In some states, the income you earn after you are separated and before a divorce decree is issued continues to be community income. H&r block free tax prep In other states, it is separate income. H&r block free tax prep Income The following is a discussion of the general effect of community property laws on the federal income tax treatment of certain items of income. H&r block free tax prep Wages, earnings, and profits. H&r block free tax prep    A spouse's (or your registered domestic partner's) wages, earnings, and net profits from a sole proprietorship are community income and must be evenly split. H&r block free tax prep Dividends, interest, and rents. H&r block free tax prep    Dividends, interest, and rents from community property are community income and must be evenly split. H&r block free tax prep Dividends, interest, and rents from separate property are characterized in accordance with the discussion under Income from separate property , later. H&r block free tax prep Example. H&r block free tax prep If you and your spouse (or your registered domestic partner) buy a bond that is considered community property under your state laws, half the bond interest belongs to you and half belongs to your spouse. H&r block free tax prep You each must show the bond interest and the split of that interest on your Form 8958, and report half the interest on your Form 1040. H&r block free tax prep Attach your Form 8958 to your Form 1040. H&r block free tax prep Alimony received. H&r block free tax prep    Alimony or separate maintenance payments made prior to divorce are taxable to the payee spouse only to the extent they exceed 50% (his or her share) of the reportable community income. H&r block free tax prep This is so because the payee spouse is already required to report half of the community income. H&r block free tax prep See also Alimony paid , later. H&r block free tax prep Gains and losses. H&r block free tax prep    Gains and losses are classified as separate or community depending on how the property is held. H&r block free tax prep For example, a loss on separate property, such as stock held separately, is a separate loss. H&r block free tax prep On the other hand, a loss on community property, such as a casualty loss to your home held as community property, is a community loss. H&r block free tax prep See Publication 544, Sales and Other Dispositions of Assets, for information on gains and losses. H&r block free tax prep See Publication 547, Casualties, Disasters, and Thefts, for information on losses due to a casualty or theft. H&r block free tax prep Withdrawals from individual retirement arrangements (IRAs) and Coverdell Education Savings Accounts (ESAs). H&r block free tax prep    There are several kinds of individual retirement arrangements (IRAs). H&r block free tax prep They are traditional IRAs (including SEP-IRAs), SIMPLE IRAs, and Roth IRAs. H&r block free tax prep IRAs and ESAs by law are deemed to be separate property. H&r block free tax prep Therefore, taxable IRA and ESA distributions are separate property, even if the funds in the account would otherwise be community property. H&r block free tax prep These distributions are wholly taxable to the spouse (or registered domestic partner) whose name is on the account. H&r block free tax prep That spouse (or registered domestic partner) is also liable for any penalties and additional taxes on the distributions. H&r block free tax prep Pensions. H&r block free tax prep    Generally, distributions from pensions will be characterized as community or separate income depending on the respective periods of participation in the pension while married (or during the registered domestic partnership) and domiciled in a community property state or in a noncommunity property state during the total period of participation in the pension. H&r block free tax prep See the example under Civil service retirement , later. H&r block free tax prep These rules may vary between states. H&r block free tax prep Check your state law. H&r block free tax prep Lump-sum distributions. H&r block free tax prep    If you were born before January 2, 1936, and receive a lump-sum distribution from a qualified retirement plan, you may be able to choose an optional method of figuring the tax on the distribution. H&r block free tax prep For the 10-year tax option, you must disregard community property laws. H&r block free tax prep For more information, see Publication 575, Pension and Annuity Income, and Form 4972, Tax on Lump-Sum Distributions. H&r block free tax prep Civil service retirement. H&r block free tax prep    For income tax purposes, community property laws apply to annuities payable under the Civil Service Retirement Act (CSRS) or Federal Employee Retirement System (FERS). H&r block free tax prep   Whether a civil service annuity is separate or community income depends on your marital status (or your status as a registered domestic partner) and domicile of the employee when the services were performed for which the annuity is paid. H&r block free tax prep Even if you now live in a noncommunity property state and you receive a civil service annuity, it may be community income if it is based on services you performed while married (or during the registered domestic partnership) and domiciled in a community property state. H&r block free tax prep   If a civil service annuity is a mixture of community income and separate income, it must be divided between the two kinds of income. H&r block free tax prep The division is based on the employee's domicile and marital status (or registered domestic partnership) in community and noncommunity property states during his or her periods of service. H&r block free tax prep Example. H&r block free tax prep Henry Wright retired this year after 30 years of civil service. H&r block free tax prep He and his wife were domiciled in a community property state during the past 15 years. H&r block free tax prep Since half the service was performed while the Wrights were married and domiciled in a community property state, half the civil service retirement pay is considered to be community income. H&r block free tax prep If Mr. H&r block free tax prep Wright receives $1,000 a month in retirement pay, $500 is considered community income—half ($250) is his income and half ($250) is his wife's. H&r block free tax prep Military retirement pay. H&r block free tax prep    State community property laws apply to military retirement pay. H&r block free tax prep Generally, the pay is either separate or community income based on the marital status and domicile of the couple while the member of the Armed Forces was in active military service. H&r block free tax prep For example, military retirement pay for services performed during marriage and domicile in a community property state is community income. H&r block free tax prep   Active military pay earned while married and domiciled in a community property state is also community income. H&r block free tax prep This income is considered to be received half by the member of the Armed Forces and half by the spouse. H&r block free tax prep Partnership income. H&r block free tax prep    If an interest is held in a partnership, and income from the partnership is attributable to the efforts of either spouse (or registered domestic partner), the partnership income is community property. H&r block free tax prep If it is merely a passive investment in a separate property partnership, the partnership income will be characterized in accordance with the discussion under Income from separate property , later. H&r block free tax prep Tax-exempt income. H&r block free tax prep    For spouses, community income exempt from federal tax generally keeps its exempt status for both spouses. H&r block free tax prep For example, under certain circumstances, income earned outside the United States is tax exempt. H&r block free tax prep If you earned income and met the conditions that made it exempt, the income is also exempt for your spouse even though he or she may not have met the conditions. H&r block free tax prep Registered domestic partners should consult the particular exclusion provision to see if the exempt status applies to both. H&r block free tax prep Income from separate property. H&r block free tax prep    In some states, income from separate property is separate income. H&r block free tax prep These states include Arizona, California, Nevada, New Mexico, and Washington. H&r block free tax prep Other states characterize income from separate property as community income. H&r block free tax prep These states include Idaho, Louisiana, Texas, and Wisconsin. H&r block free tax prep Exemptions When you file separate returns, you must claim your own exemption amount for that year. H&r block free tax prep (See your tax return instructions. H&r block free tax prep ) You cannot divide the amount allowed as an exemption for a dependent between you and your spouse (or your registered domestic partner). H&r block free tax prep When community funds provide support for more than one person, each of whom otherwise qualifies as a dependent, you and your spouse (or your registered domestic partner) may divide the number of dependency exemptions as explained in the following example. H&r block free tax prep Example. H&r block free tax prep Ron and Diane White have three dependent children and live in Nevada. H&r block free tax prep If Ron and Diane file separately, only Ron can claim his own exemption, and only Diane can claim her own exemption. H&r block free tax prep Ron and Diane can agree that one of them will claim the exemption for one, two, or all of their children and the other will claim any remaining exemptions. H&r block free tax prep They cannot each claim half of the total exemption amount for their three children. H&r block free tax prep Deductions If you file separate returns, your deductions generally depend on whether the expenses involve community or separate income. H&r block free tax prep Business and investment expenses. H&r block free tax prep    If you file separate returns, expenses incurred to earn or produce community business or investment income are generally divided equally between you and your spouse (or your registered domestic partner). H&r block free tax prep Each of you is entitled to deduct one-half of the expenses on your separate returns. H&r block free tax prep Expenses incurred by a spouse (or registered domestic partner) to produce separate business or investment income is deductible by the spouse (or the registered domestic partner) who earns the corresponding separate business or investment income. H&r block free tax prep    Other limits may also apply to business and investment expenses. H&r block free tax prep For more information, see Publication 535, Business Expenses, and Publication 550, Investment Income and Expenses. H&r block free tax prep Alimony paid. H&r block free tax prep    Payments that may otherwise qualify as alimony are not deductible by the payer if they are the recipient spouse's part of community income. H&r block free tax prep They are deductible as alimony only to the extent they are more than that spouse's part of community income. H&r block free tax prep Example. H&r block free tax prep You live in a community property state. H&r block free tax prep You are separated but the special rules explained later under Spouses living apart all year do not apply. H&r block free tax prep Under a written agreement, you pay your spouse $12,000 of your $20,000 total yearly community income. H&r block free tax prep Your spouse receives no other community income. H&r block free tax prep Under your state law, earnings of a spouse living separately and apart from the other spouse continue as community property. H&r block free tax prep On your separate returns, each of you must report $10,000 of the total community income. H&r block free tax prep In addition, your spouse must report $2,000 as alimony received. H&r block free tax prep You can deduct $2,000 as alimony paid. H&r block free tax prep IRA deduction. H&r block free tax prep    Deductions for IRA contributions cannot be split between spouses (or registered domestic partners). H&r block free tax prep The deduction for each spouse (or each registered domestic partner) is figured separately and without regard to community property laws. H&r block free tax prep Personal expenses. H&r block free tax prep   Expenses that are paid out of separate funds, such as medical expenses, are deductible by the spouse who pays them. H&r block free tax prep If these expenses are paid from community funds, divide the deduction equally between you and your spouse. H&r block free tax prep Credits, Taxes, and Payments The following is a discussion of the general effect of community property laws on the treatment of certain credits, taxes, and payments on your separate return. H&r block free tax prep Child tax credit. H&r block free tax prep    You may be entitled to a child tax credit for each of your qualifying children. H&r block free tax prep You must provide the name and identification number (usually the social security number) of each qualifying child on your return. H&r block free tax prep See your tax return instructions for the maximum amount of the credit you can claim for each qualifying child. H&r block free tax prep Limit on credit. H&r block free tax prep    The credit is limited if your modified adjusted gross income (modified AGI) is above a certain amount. H&r block free tax prep The amount at which the limitation (phaseout) begins depends on your filing status. H&r block free tax prep Generally, your credit is limited to your tax liability unless you have three or more qualifying children. H&r block free tax prep See your tax return instructions for more information. H&r block free tax prep Self-employment tax. H&r block free tax prep    For the effect of community property laws on the income tax treatment of income from a sole proprietorship and partnerships, see Wages, earnings, and profits and Partnership income , earlier. H&r block free tax prep The following rules only apply to persons married for federal tax purposes. H&r block free tax prep Registered domestic partners report community income for self-employment tax purposes the same way they do for income tax purposes. H&r block free tax prep Sole proprietorship. H&r block free tax prep    With regard to net income from a trade or business (other than a partnership) that is community income, self-employment tax is imposed on the spouse carrying on the trade or business. H&r block free tax prep Partnerships. H&r block free tax prep    All of the distributive share of a married partner's income or loss from a partnership trade or business is attributable to the partner for computing any self-employment tax, even if a portion of the partner's distributive share of income or loss is community income or loss that is otherwise attributable to the partner's spouse for income tax purposes. H&r block free tax prep If both spouses are partners, any self-employment tax is allocated based on their distributive shares. H&r block free tax prep Federal income tax withheld. H&r block free tax prep    Report the credit for federal income tax withheld on community wages in the same manner as your wages. H&r block free tax prep If you and your spouse file separate returns on which each of you reports half the community wages, each of you is entitled to credit for half the income tax withheld on those wages. H&r block free tax prep Likewise, each registered domestic partner is entitled to credit for half the income tax withheld on those wages. H&r block free tax prep Estimated tax payments. H&r block free tax prep    In determining whether you must pay estimated tax, apply the estimated tax rules to your estimated income. H&r block free tax prep These rules are explained in Publication 505. H&r block free tax prep   If you think you may owe estimated tax and want to pay the tax separately (registered domestic partners must pay the tax separately), determine whether you must pay it by taking into account: Half the community income and deductions, All of your separate income and deductions, and Your own exemption and any exemptions for dependents that you may claim. H&r block free tax prep   Whether you and your spouse pay estimated tax jointly or separately will not affect your choice of filing joint or separate income tax returns. H&r block free tax prep   If you and your spouse paid estimated tax jointly but file separate income tax returns, either of you can claim all of the estimated tax paid, or you may divide it between you in any way that you agree upon. H&r block free tax prep   If you cannot agree on how to divide it, the estimated tax you can claim equals the total estimated tax paid times the tax shown on your separate return, divided by the total of the tax shown on your return and your spouse's return. H&r block free tax prep   If you paid your estimated taxes separately, you get credit for only the estimated taxes you paid. H&r block free tax prep Earned income credit. H&r block free tax prep    You may be entitled to an earned income credit (EIC). H&r block free tax prep You cannot claim this credit if your filing status is married filing separately. H&r block free tax prep   If you are married, but qualify to file as head of household under rules for married taxpayers living apart (see Publication 501, Exemptions, Standard Deduction, and Filing Information), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under community property laws. H&r block free tax prep That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. H&r block free tax prep Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. H&r block free tax prep The same rule applies to registered domestic partners. H&r block free tax prep    This rule does not apply when determining your adjusted gross income (AGI) for the EIC. H&r block free tax prep Your AGI includes that part of both your and your spouse's (or your registered domestic partner's) wages that you are required to include in gross income shown on your tax return. H&r block free tax prep   For more information about the EIC, see Publication 596, Earned Income Credit (EIC). H&r block free tax prep Overpayments. H&r block free tax prep    The amount of an overpayment on a joint return is allocated under the community property laws of the state in which you are domiciled. H&r block free tax prep If, under the laws of your state, community property is subject to premarital or other separate debts of either spouse, the full joint overpayment may be used to offset the obligation. H&r block free tax prep If, under the laws of your state, community property is not subject to premarital or other separate debts of either spouse, only the portion of the joint overpayment allocated to the spouse liable for the obligation can be used to offset that liability. H&r block free tax prep The portion allocated to the other spouse can be refunded. H&r block free tax prep Community Property Laws Disregarded The following discussions are situations where special rules apply to community property and community income for spouses. H&r block free tax prep These rules do not apply to registered domestic partners. H&r block free tax prep Certain community income not treated as community income by one spouse. H&r block free tax prep    Community property laws may not apply to an item of community income that you received but did not treat as community income. H&r block free tax prep You are responsible for reporting all of that income item if: You treat the item as if only you are entitled to the income, and You do not notify your spouse of the nature and amount of the income by the due date for filing the return (including extensions). H&r block free tax prep Relief from liability arising from community property law. H&r block free tax prep    You are not responsible for the tax relating to an item of community income if all the following conditions are met. H&r block free tax prep You did not file a joint return for the tax year. H&r block free tax prep You did not include an item of community income in gross income. H&r block free tax prep The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. H&r block free tax prep Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. H&r block free tax prep Your spouse's (or former spouse's) distributive share of partnership income. H&r block free tax prep Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). H&r block free tax prep Use the appropriate community property law to determine what is separate property. H&r block free tax prep Any other income that belongs to your spouse (or former spouse) under community property law. H&r block free tax prep You establish that you did not know of, and had no reason to know of, that community income. H&r block free tax prep Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. H&r block free tax prep Requesting relief. H&r block free tax prep    For information on how and when to request relief from liabilities arising from community property laws, see Community Property Laws in Publication 971, Innocent Spouse Relief. H&r block free tax prep Equitable relief. H&r block free tax prep    If you do not qualify for the relief discussed earlier under Relief from liability arising from community property law and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief. H&r block free tax prep To request equitable relief, you must file Form 8857, Request for Innocent Spouse Relief. H&r block free tax prep Also see Publication 971. H&r block free tax prep Spousal agreements. H&r block free tax prep    In some states a married couple may enter into an agreement that affects the status of property or income as community or separate property. H&r block free tax prep Check your state law to determine how it affects you. H&r block free tax prep Nonresident alien spouse. H&r block free tax prep    If you are a U. H&r block free tax prep S. H&r block free tax prep citizen or resident alien and you choose to treat your nonresident alien spouse as a U. H&r block free tax prep S. H&r block free tax prep resident for tax purposes and you are domiciled in a community property state or country, use the community property rules. H&r block free tax prep You must file a joint return for the year you make the choice. H&r block free tax prep You can file separate returns in later years. H&r block free tax prep For details on making this choice, see Publication 519, U. H&r block free tax prep S. H&r block free tax prep Tax Guide for Aliens. H&r block free tax prep   If you are a U. H&r block free tax prep S. H&r block free tax prep citizen or resident alien and do not choose to treat your nonresident alien spouse as a U. H&r block free tax prep S. H&r block free tax prep resident for tax purposes, treat your community income as explained next under Spouses living apart all year. H&r block free tax prep However, you do not have to meet the four conditions discussed there. H&r block free tax prep Spouses living apart all year. H&r block free tax prep    If you are married at any time during the calendar year, special rules apply for reporting certain community income. H&r block free tax prep You must meet all the following conditions for these special rules to apply. H&r block free tax prep You and your spouse lived apart all year. H&r block free tax prep You and your spouse did not file a joint return for a tax year beginning or ending in the calendar year. H&r block free tax prep You and/or your spouse had earned income for the calendar year that is community income. H&r block free tax prep You and your spouse have not transferred, directly or indirectly, any of the earned income in condition (3) above between yourselves before the end of the year. H&r block free tax prep Do not take into account transfers satisfying child support obligations or transfers of very small amounts or value. H&r block free tax prep If all these conditions are met, you and your spouse must report your community income as discussed next. H&r block free tax prep See also Certain community income not treated as community income by one spouse , earlier. H&r block free tax prep Earned income. H&r block free tax prep    Treat earned income that is not trade or business or partnership income as the income of the spouse who performed the services to earn the income. H&r block free tax prep Earned income is wages, salaries, professional fees, and other pay for personal services. H&r block free tax prep   Earned income does not include amounts paid by a corporation that are a distribution of earnings and profits rather than a reasonable allowance for personal services rendered. H&r block free tax prep Trade or business income. H&r block free tax prep    Treat income and related deductions from a trade or business that is not a partnership as those of the spouse carrying on the trade or business. H&r block free tax prep Partnership income or loss. H&r block free tax prep    Treat income or loss from a trade or business carried on by a partnership as the income or loss of the spouse who is the partner. H&r block free tax prep Separate property income. H&r block free tax prep    Treat income from the separate property of one spouse as the income of that spouse. H&r block free tax prep Social security benefits. H&r block free tax prep    Treat social security and equivalent railroad retirement benefits as the income of the spouse who receives the benefits. H&r block free tax prep Other income. H&r block free tax prep    Treat all other community income, such as dividends, interest, rents, royalties, or gains, as provided under your state's community property law. H&r block free tax prep Example. H&r block free tax prep George and Sharon were married throughout the year but did not live together at any time during the year. H&r block free tax prep Both domiciles were in a community property state. H&r block free tax prep They did not file a joint return or transfer any of their earned income between themselves. H&r block free tax prep During the year their incomes were as follows:   George Sharon Wages $20,000 $22,000 Consulting business 5,000   Partnership   10,000 Dividends from separate property 1,000 2,000 Interest from community property 500 500 Total $26,500 $34,500 Under the community property law of their state, all the income is considered community income. H&r block free tax prep (Some states treat income from separate property as separate income—check your state law. H&r block free tax prep ) Sharon did not take part in George's consulting business. H&r block free tax prep Ordinarily, on their separate returns they would each report $30,500, half the total community income of $61,000 ($26,500 + $34,500). H&r block free tax prep But because they meet the four conditions listed earlier under Spouses living apart all year , they must disregard community property law in reporting all their income (except the interest income) from community property. H&r block free tax prep They each report on their returns only their own earnings and other income, and their share of the interest income from community property. H&r block free tax prep George reports $26,500 and Sharon reports $34,500. H&r block free tax prep Other separated spouses. H&r block free tax prep    If you and your spouse are separated but do not meet the four conditions discussed earlier under Spouses living apart all year , you must treat your income according to the laws of your state. H&r block free tax prep In some states, income earned after separation but before a decree of divorce continues to be community income. H&r block free tax prep In other states, it is separate income. H&r block free tax prep End of the Community The marital community may end in several ways. H&r block free tax prep When the marital community ends, the community assets (money and property) are divided between the spouses. H&r block free tax prep Similarly, a registered domestic partnership may end in several ways and the community assets must be divided between the registered domestic partners. H&r block free tax prep Death of spouse. H&r block free tax prep    If you own community property and your spouse dies, the total fair market value (FMV) of the community property, including the part that belongs to you, generally becomes the basis of the entire property. H&r block free tax prep For this rule to apply, at least half the value of the community property interest must be includible in your spouse's gross estate, whether or not the estate must file a return (this rule does not apply to registered domestic partners). H&r block free tax prep Example. H&r block free tax prep Bob and Ann owned community property that had a basis of $80,000. H&r block free tax prep When Bob died, his and Ann's community property had an FMV of $100,000. H&r block free tax prep One-half of the FMV of their community interest was includible in Bob's estate. H&r block free tax prep The basis of Ann's half of the property is $50,000 after Bob died (half of the $100,000 FMV). H&r block free tax prep The basis of the other half to Bob's heirs is also $50,000. H&r block free tax prep   For more information about the basis of assets, see Publication 551, Basis of Assets. H&r block free tax prep    The above basis rule does not apply if your spouse died in 2010 and the spouse's executor elected out of the estate tax, in which case section 1022 will apply. H&r block free tax prep See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for additional information. H&r block free tax prep Divorce or separation. H&r block free tax prep    If spouses divorce or separate, the (equal or unequal) division of community property in connection with the divorce or property settlement does not result in a gain or loss. H&r block free tax prep For registered domestic partners, an unequal division of community property in a property settlement may result in a gain or loss. H&r block free tax prep For information on the tax consequences of the division of property under a property settlement or divorce decree, see Publication 504. H&r block free tax prep   Each spouse (or each registered domestic partner) is taxed on half the community income for the part of the year before the community ends. H&r block free tax prep However, see Spouses living apart all year , earlier. H&r block free tax prep Any income received after the community ends is separate income. H&r block free tax prep This separate income is taxable only to the spouse (or the registered domestic partner) to whom it belongs. H&r block free tax prep   An absolute decree of divorce or annulment ends the marital community in all community property states. H&r block free tax prep A decree of annulment, even though it holds that no valid marriage ever existed, usually does not nullify community property rights arising during the “marriage. H&r block free tax prep ” However, you should check your state law for exceptions. H&r block free tax prep   A decree of legal separation or of separate maintenance may or may not end the marital community. H&r block free tax prep The court issuing the decree may terminate the marital community and divide the property between the spouses. H&r block free tax prep   A separation agreement may divide the community property between you and your spouse. H&r block free tax prep It may provide that this property, along with future earnings and property acquired, will be separate property. H&r block free tax prep This agreement may end the community. H&r block free tax prep   In some states, the marital community ends when the spouses permanently separate, even if there is no formal agreement. H&r block free tax prep Check your state law. H&r block free tax prep   If you are a registered domestic partner, you should check your state law to determine when the community ends. H&r block free tax prep Preparing a Federal Income Tax Return The following discussion does not apply to spouses who meet the conditions under Spouses living apart all year , discussed earlier. H&r block free tax prep Those spouses must report their community income as explained in that discussion. H&r block free tax prep Joint Return Versus Separate Returns Ordinarily, filing a joint return will give you a greater tax advantage than filing a separate return. H&r block free tax prep But in some cases, your combined income tax on separate returns may be less than it would be on a joint return. H&r block free tax prep This discussion concerning joint versus separate returns does not apply to registered domestic partners. H&r block free tax prep The following rules apply if your filing status is married filing separately. H&r block free tax prep You should itemize deductions if your spouse itemizes deductions, because you cannot claim the standard deduction. H&r block free tax prep You cannot take the credit for child and dependent care expenses in most instances. H&r block free tax prep You cannot take the earned income credit. H&r block free tax prep You cannot exclude any interest income from qualified U. H&r block free tax prep S. H&r block free tax prep savings bonds that you used for higher education expenses. H&r block free tax prep You cannot take the credit for the elderly or the disabled unless you lived apart from your spouse all year. H&r block free tax prep You may have to include in income more of any social security benefits (including any equivalent railroad retirement benefits) you received during the year than you would on a joint return. H&r block free tax prep You cannot deduct interest paid on a qualified student loan. H&r block free tax prep You cannot take the education credits. H&r block free tax prep You may have a smaller child tax credit than you would on a joint return. H&r block free tax prep You cannot take the exclusion or credit for adoption expenses in most instances. H&r block free tax prep Figure your tax both on a joint return and on separate returns under the community property laws of your state. H&r block free tax prep You can then compare the tax figured under both methods and use the one that results in less tax. H&r block free tax prep Separate Return Preparation If you file separate returns, you and your spouse must each report half of your combined community income and deductions in addition to your separate income and deductions. H&r block free tax prep Each of you must complete and attach Form 8958 to your Form 1040 showing how you figured the amount you are reporting on your return. H&r block free tax prep On the appropriate lines of your separate Form 1040, list only your share of the income and deductions on the appropriate lines of your separate tax returns (wages, interest, dividends, etc. H&r block free tax prep ). H&r block free tax prep The same reporting rule applies to registered domestic partners. H&r block free tax prep For a discussion of the effect of community property laws on certain items of income, deductions, credits, and other return amounts, see Identifying Income, Deductions, and Credits , earlier. H&r block free tax prep Attach your Form 8958 to your separate return showing how you figured the income, deductions, and federal income tax withheld that each of you reported. H&r block free tax prep Form 8958 is used for married spouses in community property states who choose to file married filing separately. H&r block free tax prep Form 8958 is also used for registered domestic partners who are domiciled in Nevada, Washington, or California. H&r block free tax prep A registered domestic partner in Nevada, Washington, or California must follow state community property laws and report half the combined community income of the individual and his or her registered domestic partner. H&r block free tax prep Extension of time to file. H&r block free tax prep    An extension of time for filing your separate return does not extend the time for filing your spouse's (or your registered domestic partner's) separate return. H&r block free tax prep If you and your spouse file a joint return, you cannot file separate returns after the due date for filing either separate return has passed. H&r block free tax prep How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. H&r block free tax prep Free help with your tax return. H&r block free tax prep    You can get free help preparing your return nationwide from IRS-certified volunteers. H&r block free tax prep The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. H&r block free tax prep The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H&r block free tax prep Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. H&r block free tax prep In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. H&r block free tax prep To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. H&r block free tax prep gov, download the IRS2Go app, or call 1-800-906-9887. H&r block free tax prep   As part of the TCE program, AARP offers the Tax-Aide counseling program. H&r block free tax prep To find the nearest AARP Tax-Aide site, visit AARP's website at www. H&r block free tax prep aarp. H&r block free tax prep org/money/taxaide or call 1-888-227-7669. H&r block free tax prep For more information on these programs, go to IRS. H&r block free tax prep gov and enter “VITA” in the search box. H&r block free tax prep Internet. H&r block free tax prep    IRS. H&r block free tax prep gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. H&r block free tax prep Download the free IRS2Go app from the iTunes app store or from Google Play. H&r block free tax prep Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. H&r block free tax prep Check the status of your 2013 refund with the Where's My Refund? application on IRS. H&r block free tax prep gov or download the IRS2Go app and select the Refund Status option. H&r block free tax prep The IRS issues more than 9 out of 10 refunds in less than 21 days. H&r block free tax prep Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. H&r block free tax prep You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. H&r block free tax prep The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H&r block free tax prep Use the Interactive Tax Assistant (ITA) to research your tax questions. H&r block free tax prep No need to wait on the phone or stand in line. H&r block free tax prep The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. H&r block free tax prep When you reach the response screen, you can print the entire interview and the final response for your records. H&r block free tax prep New subject areas are added on a regular basis. H&r block free tax prep  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. H&r block free tax prep gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. H&r block free tax prep You can use the IRS Tax Map, to search publications and instructions by topic or keyword. H&r block free tax prep The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. H&r block free tax prep When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. H&r block free tax prep Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. H&r block free tax prep You can also ask the IRS to mail a return or an account transcript to you. H&r block free tax prep Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. H&r block free tax prep gov or by calling 1-800-908-9946. H&r block free tax prep Tax return and tax account transcripts are generally available for the current year and the past three years. H&r block free tax prep Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. H&r block free tax prep Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. H&r block free tax prep If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. H&r block free tax prep Check the status of your amended return using Where's My Amended Return? Go to IRS. H&r block free tax prep gov and enter Where's My Amended Return? in the search box. H&r block free tax prep You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H&r block free tax prep It can take up to 3 weeks from the date you mailed it to show up in our system. H&r block free tax prep Make a payment using one of several safe and convenient electronic payment options available on IRS. H&r block free tax prep gov. H&r block free tax prep Select the Payment tab on the front page of IRS. H&r block free tax prep gov for more information. H&r block free tax prep Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. H&r block free tax prep Figure your income tax withholding with the IRS Withholding Calculator on IRS. H&r block free tax prep gov. H&r block free tax prep Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. H&r block free tax prep Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. H&r block free tax prep gov. H&r block free tax prep Request an Electronic Filing PIN by going to IRS. H&r block free tax prep gov and entering Electronic Filing PIN in the search box. H&r block free tax prep Download forms, instructions and publications, including accessible versions for people with disabilities. H&r block free tax prep Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. H&r block free tax prep gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. H&r block free tax prep An employee can answer questions about your tax account or help you set up a payment plan. H&r block free tax prep Before you visit, check the Office Locator on IRS. H&r block free tax prep gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. H&r block free tax prep If you have a special need, such as a disability, you can request an appointment. H&r block free tax prep Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. H&r block free tax prep Apply for an Employer Identification Number (EIN). H&r block free tax prep Go to IRS. H&r block free tax prep gov and enter Apply for an EIN in the search box. H&r block free tax prep Read the Internal Revenue Code, regulations, or other official guidance. H&r block free tax prep Read Internal Revenue Bulletins. H&r block free tax prep Sign up to receive local and national tax news and more by email. H&r block free tax prep Just click on “subscriptions” above the search box on IRS. H&r block free tax prep gov and choose from a variety of options. H&r block free tax prep    Phone. H&r block free tax prep You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. H&r block free tax prep Download the free IRS2Go app from the iTunes app store or from Google Play. H&r block free tax prep Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. H&r block free tax prep gov, or download the IRS2Go app. H&r block free tax prep Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. H&r block free tax prep The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H&r block free tax prep Most VITA and TCE sites offer free electronic filing. H&r block free tax prep Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. H&r block free tax prep Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. H&r block free tax prep Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. H&r block free tax prep If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. H&r block free tax prep The IRS issues more than 9 out of 10 refunds in less than 21 days. H&r block free tax prep Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. H&r block free tax prep Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. H&r block free tax prep The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H&r block free tax prep Note, the above information is for our automated hotline. H&r block free tax prep Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. H&r block free tax prep Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. H&r block free tax prep You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H&r block free tax prep It can take up to 3 weeks from the date you mailed it to show up in our system. H&r block free tax prep Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). H&r block free tax prep You should receive your order within 10 business days. H&r block free tax prep Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. H&r block free tax prep If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. H&r block free tax prep Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. H&r block free tax prep The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. H&r block free tax prep These individuals can also contact the IRS through relay services such as the Federal Relay Service. H&r block free tax prep    Walk-in. H&r block free tax prep You can find a selection of forms, publications and services — in-person. H&r block free tax prep Products. H&r block free tax prep You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. H&r block free tax prep Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. H&r block free tax prep Services. H&r block free tax prep You can walk in to your local TAC for face-to-face tax help. H&r block free tax prep An employee can answer questions about your tax account or help you set up a payment plan. H&r block free tax prep Before visiting, use the Office Locator tool on IRS. H&r block free tax prep gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. H&r block free tax prep    Mail. H&r block free tax prep You can send your order for forms, instructions, and publications to the address below. H&r block free tax prep You should receive a response within 10 business days after your request is received. H&r block free tax prep Internal Revenue Service 1201 N. H&r block free tax prep Mitsubishi Motorway Bloomington, IL 61705-6613   The Taxpayer Advocate Service Is Here to Help You. H&r block free tax prep The Taxpayer Advocate Service (TAS) is your voice at the IRS. H&r block free tax prep Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. H&r block free tax prep   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. H&r block free tax prep We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. H&r block free tax prep You face (or your business is facing) an immediate threat of adverse action. H&r block free tax prep You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. H&r block free tax prep   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. H&r block free tax prep Here's why we can help: TAS is an independent organization within the IRS. H&r block free tax prep Our advocates know how to work with the IRS. H&r block free tax prep Our services are free and tailored to meet your needs. H&r block free tax prep We have offices in every state, the District of Columbia, and Puerto Rico. H&r block free tax prep   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. H&r block free tax prep irs. H&r block free tax prep gov/advocate, or call us toll-free at 1-877-777-4778. H&r block free tax prep   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. H&r block free tax prep If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. H&r block free tax prep irs. H&r block free tax prep gov/sams. H&r block free tax prep Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. H&r block free tax prep Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. H&r block free tax prep Visit www. H&r block free tax prep irs. H&r block free tax prep gov/litc or see IRS Publication 4134, Low Income Taxpayer Clinic List. H&r block free tax prep Prev  Up  Next   Home   More Online Publications
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Excise Tax

Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs. One of the major components of the excise program is motor fuel.

Various Fuel Tax Credits Extended:

Here Are Special Instructions On How To Report
The American Taxpayer Relief Act, enacted Jan. 2, 2013, retroactively extends certain fuel tax credits that expired at the end of 2011. These include the biodiesel mixture credit, biodiesel credit, alternative fuel credit and alternative fuel mixture credit. Generally, eligible taxpayers can now claim these credits on their federal excise tax returns, and if the credits exceed their excise tax liability, the excess can be claimed as a refund or income tax credit. 

Indoor Tanning Service Providers Must File a Federal Excise Tax Return
Beginning July 1, 2010, indoor tanning services will be subject to a 10 percent excise tax under the Affordable Care Act. Filing your Excise Tax return.

Directors Directive on Announcement 2008-18, FET Compliance Initiative
This Directive provides guidance to examiners auditing taxpayers participating in the voluntary compliance initiative (Announcement 2008-18) regarding foreign insurance excise tax (FET) under IRC 4371- 4374.

Excise Summary Terminal Activity Reporting System (ExSTARS)
ExSTARS is a fuel reporting system developed with the cooperation of the IRS, Department of Transportation, states, and motor fuel industry, which details the movement of any product into or out of an IRS approved terminal. A facility control number (FCN) designates a storage location within the motor fuel, or renewable fuel production or the bulk transfer / terminal system. Information regarding the use of FCNs was made public by an announcement in the Federal Register on April 12, 2010.

Excise Tax Electronic Data Interchange (EDI) Guides (Pub. 3536)
Terminal Operators and Bulk Carriers refer to Publication 3536 for EDI filing requirements.

637 Registration Program
Under the Code and regulations, each person that engages in certain specified activities relating to excise tax must be registered by the IRS before engaging in that activity.

Online Form 637 Registration Status Check
This Web application provides the ability for businesses to confirm whether individuals/companies have a valid IRS registration.

Exemption From Excise Tax for Certain Wooden Arrows
On Friday, October 3, 2008, P.L. 110-343 (H.R. 1424), the Emergency Economic Stabilization Act of 2008 (Act), also known as the Tax Extenders and Alternative Minimum Tax Relief Act of 2008, was signed into law by the President. The Act includes a key provision in Title V, Section 503 that impacts the Archery federal excise tax.

Field Directive Federal Excise Tax on the Importation and Manufacture of Fishing and Archery Products
This updates the field directive that discusses the Federal Excise Tax on the importation and manufacture of fishing and archery products.

Idling Reduction Devices Exempt from 12% Retail Excise Tax
The Environmental Protection Agency's (EPA) list of devices that reduce highway tractor idling is now available. These devices may be exempt from the 12 percent retail excise tax provided they meet the criteria set forth in section 4053(9) of the Internal Revenue Code.

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The H&r Block Free Tax Prep

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