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Income Tax Forms 2012

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Income Tax Forms 2012

Income tax forms 2012 1. Income tax forms 2012   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. Income tax forms 2012 For information on section 501(c)(3) organizations, go to Section 501(c)(3) Organizations chapter 3. Income tax forms 2012 If your organization is seeking exemption under one of the other paragraphs of section 501(c), see chapter 4. Income tax forms 2012 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. Income tax forms 2012 Application Procedures Oral requests for recognition of exemption will not be considered by the IRS. Income tax forms 2012 Your application for tax-exempt status must be in writing using the appropriate forms as discussed below. Income tax forms 2012 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. Income tax forms 2012 3. Income tax forms 2012 If your organization is a central organization with exempt status, see Group Exemption Letter , later. Income tax forms 2012 All applications must be signed by an authorized individual. Income tax forms 2012 Form 1023, Application for Recognition of Exemption. Income tax forms 2012   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. Income tax forms 2012 Form 1024, Application for Recognition of Exemption Under Section 501(a). Income tax forms 2012    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. Income tax forms 2012 , 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. Income tax forms 2012 , 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. Income tax forms 2012 of past or present members of the Armed Forces of the United States, and 501(c)(25) Title holding corporations or trusts. Income tax forms 2012  Form 8718, User Fee for Exempt Organization Determination Letter Request, must also be sent along with Form 1024. Income tax forms 2012 Letter application. Income tax forms 2012   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. Income tax forms 2012 See Required Inclusions for the information to include with the letter application. Income tax forms 2012 Form 1028. Income tax forms 2012   Use Form 1028 if your organization is a farmers’ cooperative seeking recognition of exemption under section 521. Income tax forms 2012 You must also submit Form 8718. Income tax forms 2012 Form 8871. Income tax forms 2012    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. Income tax forms 2012 See Political Organization Income Tax Return , later. Income tax forms 2012    Some organizations do not have to use specific application forms. Income tax forms 2012 The application your organization must use is specified in the chapter in this publication dealing with your kind of organization. Income tax forms 2012 It is also shown in the Organization Reference Chart, later. Income tax forms 2012 Power of attorney. Income tax forms 2012   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. Income tax forms 2012 The power of attorney must specifically authorize an individual to represent your organization. Income tax forms 2012 You cannot name an organization, firm, etc. Income tax forms 2012 as your representative. Income tax forms 2012 Form 2848, Power of Attorney and Declaration of Representative, can be used for this purpose. Income tax forms 2012 The categories of individuals who can represent you before the IRS are listed on the form. Income tax forms 2012 Non-exemption for terrorist organizations. Income tax forms 2012   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. Income tax forms 2012 User fee. Income tax forms 2012   The law requires the payment of a user fee for determination letter requests such as your application for recognition of tax-exempt status. Income tax forms 2012 If you are filing Form 1023, user fee information is included in Part XI. Income tax forms 2012 If you are required to apply for recognition of exemption by submitting Form 1024, a letter application, etc. Income tax forms 2012 and you must pay a user fee, you should use Form 8718 to figure the amount of your user fee and to pay it. Income tax forms 2012 Your payment must accompany your request. Income tax forms 2012 The IRS will not process a request unless the fee has been paid. Income tax forms 2012    For the current user fee amount and processing time for applications go to IRS. Income tax forms 2012 gov and select “Charities and Non-Profits” from the buttons near the top. Income tax forms 2012 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. Income tax forms 2012 You can also call 1-877-829-5500. Income tax forms 2012 Required Inclusions Employer identification number (EIN). Income tax forms 2012   Every exempt organization must have an EIN, whether or not it has any employees. Income tax forms 2012 An EIN is required before an exemption application is submitted. Income tax forms 2012 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. Income tax forms 2012 The EIN is issued immediately once the application information is validated. Income tax forms 2012 By telephone at 1-800-829-4933, from 7:00 a. Income tax forms 2012 m. Income tax forms 2012 to 7:00 p. Income tax forms 2012 m. Income tax forms 2012 local time, Monday through Friday. Income tax forms 2012 The EIN is provided over the phone to an authorized individual. Income tax forms 2012 By mailing or faxing Form SS-4, Application for Employer Identification Number. Income tax forms 2012 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. Income tax forms 2012    Use only one method for each entity so you do not receive more than one EIN for an entity. Income tax forms 2012   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. Income tax forms 2012 Organizing documents. Income tax forms 2012   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. Income tax forms 2012   If your organizing or enabling document are articles of incorporation, include evidence that it was filed and approved by a state official. Income tax forms 2012 (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. Income tax forms 2012 ) 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. Income tax forms 2012 Bylaws. Income tax forms 2012   Bylaws alone are not organizing documents. Income tax forms 2012 However, if your organization has adopted bylaws, include a current copy. Income tax forms 2012 The bylaws need not be signed if submitted as an attachment. Income tax forms 2012   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. Income tax forms 2012    Bylaws may be considered an organizing document only if they are properly structured (includes name, purpose, signatures, and intent to form an organization). Income tax forms 2012 Conformed copy. Income tax forms 2012   A conformed copy is a copy that agrees with the original and all amendments to it. Income tax forms 2012 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. Income tax forms 2012 With either option, the officer must certify that the document is a complete and accurate copy of the original. Income tax forms 2012 A certificate of incorporation should be approved and dated by an appropriate state official. Income tax forms 2012 Attachments. Income tax forms 2012    When submitting attachments, every attachment should show your organization's name and EIN. Income tax forms 2012 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. Income tax forms 2012 Original documents. Income tax forms 2012   Do not submit original documents because they become part of the IRS file and cannot be returned. Income tax forms 2012 Description of activities. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012   To determine the information you need to provide, you should study the part of this publication that applies to your organization. Income tax forms 2012 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. Income tax forms 2012   Often, your organization's articles of organization (or other organizing instruments) contain descriptions of your organization's purposes and activities. Income tax forms 2012   Your application should describe completely and in detail your past, present, and planned activities. Income tax forms 2012 Financial data. Income tax forms 2012   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). Income tax forms 2012 For each accounting period, you must describe the sources of your receipts and the nature of your expenditures. Income tax forms 2012   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. Income tax forms 2012 Exempt status established in application. Income tax forms 2012   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. Income tax forms 2012 Miscellaneous Procedures To help in processing your application, be sure to attach all schedules, statements, and other documents required by the application form. Income tax forms 2012 If you do not attach them, you may have to resubmit your application or you may otherwise encounter a delay in processing your application. Income tax forms 2012 Incomplete application. Income tax forms 2012   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. Income tax forms 2012 The IRS may keep the application and send a letter requesting the missing information if most of the information has been received. Income tax forms 2012   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. Income tax forms 2012   Generally, the user fee will not be refunded if an incomplete application is filed. Income tax forms 2012   Additional information may be requested if necessary to clarify the nature of your organization. Income tax forms 2012 Application made under wrong paragraph of section 501(c). Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 It must also supply any additional information required for the application under the new paragraph. Income tax forms 2012 Different application form needed. Income tax forms 2012   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. Income tax forms 2012 Although supporting information previously furnished need not be duplicated, you must provide any necessary additional information required for the application. Income tax forms 2012 If your reply is not received within a limited time, your application will be processed only for the paragraph under which you originally applied. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 IRS responses. Income tax forms 2012   Organizations that submit a complete application will receive an acknowledgment from the IRS. Income tax forms 2012 Others will receive a letter requesting more information or returning an incomplete application. Income tax forms 2012 Applicants also will be notified if the application is forwarded to EO Technical Office for consideration. Income tax forms 2012 These letters will be sent out as soon as possible after receipt of the organization's application. Income tax forms 2012 Withdrawal of application. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 Requests for withholding of information from the public. Income tax forms 2012   The law requires many exempt organizations and private foundations to make their application forms and annual information returns available for public inspection. Income tax forms 2012 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 . Income tax forms 2012 )   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. Income tax forms 2012 Your request must: Identify the material to be withheld (the document, page, paragraph, and line) by clearly marking it “Not Subject To Public Inspection. Income tax forms 2012 ” Include the reasons for your organization's position that the information is of the type that can be withheld from public inspection. Income tax forms 2012 Be filed with the office where your organization files the documents in which the material to be withheld is contained. Income tax forms 2012 Where to file. Income tax forms 2012   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). Income tax forms 2012    Form 8940, Request for Miscellaneous Determination. Income tax forms 2012 You can request miscellaneous determinations under sections 507, 509(a), 4940, 4942, 4945, and 6033 with Form 8940. Income tax forms 2012 Nonexempt charitable trusts also file Form 8940 for an initial determination of section 509(a)(3) status or change to their type. Income tax forms 2012 See Form 8940 and instructions for more information. Income tax forms 2012 Requests other than applications. Income tax forms 2012 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. Income tax forms 2012 ) 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. Income tax forms 2012 The schedule for user fees, including those for requests other than applications, can be found in Revenue Procedure 2013-8, 2013-1 I. Income tax forms 2012 R. Income tax forms 2012 B. Income tax forms 2012 237. Income tax forms 2012 Referral to EO Technical. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 Reminder. Income tax forms 2012   The law requires payment of a user fee for determination letter requests. Income tax forms 2012 Go to IRS. Income tax forms 2012 gov/Charities and select Current User Fees-Exempt Organizations to find the required payment. Income tax forms 2012 Payment must accompany each request. Income tax forms 2012 Rulings and Determination Letters Elimination of the advance public charity status. Income tax forms 2012   New regulations eliminate the advance ruling process for a section 501(c)(3) organization. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 See Elimination of the Advance Ruling Process . Income tax forms 2012 An organization must describe fully the activities in which it expects to engage. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 Adverse determination. Income tax forms 2012   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. Income tax forms 2012 An organization can appeal a proposed adverse ruling or determination letter. Income tax forms 2012 See Appeal Procedures , later. Income tax forms 2012 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. Income tax forms 2012 (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). Income tax forms 2012 ) 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 Also, a ruling or determination letter cannot be relied on if it is based on any inaccurate material factual representations. Income tax forms 2012 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. Income tax forms 2012 When revocation takes effect. Income tax forms 2012   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. Income tax forms 2012 Material change in organization. Income tax forms 2012   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. Income tax forms 2012 Relief from retroactivity. Income tax forms 2012   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. Income tax forms 2012 For more information on requesting section 7805(b) relief, see Revenue Procedure 2013-4, 2013-1 I. Income tax forms 2012 R. Income tax forms 2012 B. Income tax forms 2012 126, sec. Income tax forms 2012 13 (or later update). Income tax forms 2012 Foundations. Income tax forms 2012   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. Income tax forms 2012 Written notice. Income tax forms 2012   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. Income tax forms 2012   The organization will also be advised of its right to protest the proposed action by requesting Appeals Office consideration. Income tax forms 2012 The appeal procedures are discussed next. Income tax forms 2012 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. Income tax forms 2012 This process does not apply to determinations issued by EO Technical. Income tax forms 2012 Your organization must submit a statement of its views fully explaining its reasoning. Income tax forms 2012 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. Income tax forms 2012 Representation. Income tax forms 2012   A principal officer or trustee can represent an organization at any level of appeal within the IRS. Income tax forms 2012 Also, an attorney, certified public accountant, or individual enrolled to practice before the IRS can represent the organization. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 These forms can be obtained from the IRS. Income tax forms 2012 For more information, see Publication 947, Practice Before the IRS and Power of Attorney. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 For more information about the role of the Appeals Office, see Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues. Income tax forms 2012 The appeal should include the following information. Income tax forms 2012 The organization's name, address, daytime telephone number, and employer identification number. Income tax forms 2012 A statement that the organization wants to protest the determination. Income tax forms 2012 A copy of the letter showing the determination you disagree with, or the date and symbols on the determination letter. Income tax forms 2012 A statement of facts supporting the organization's position in any contested factual issue. Income tax forms 2012 A statement outlining the law or other authority the organization is relying on. Income tax forms 2012 A statement as to whether a conference at the Appeals Office is desired. Income tax forms 2012 The statement of facts in item 4 must be declared true under penalties of perjury. Income tax forms 2012 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. Income tax forms 2012 ”           Signature. Income tax forms 2012   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. Income tax forms 2012 Be sure the appeal contains all of the information requested. Income tax forms 2012 Incomplete appeals will be returned for completion. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 An adverse decision can be appealed to the courts (discussed later). Income tax forms 2012 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. Income tax forms 2012 If an organization believes that its case involves such an issue, it should ask the Appeals Office to request technical advice. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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). Income tax forms 2012 In the case of a late-filed application, requesting relief under Regulations section 301. Income tax forms 2012 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). Income tax forms 2012 The timely submission of all additional information requested to perfect an exemption application or request for determination of private foundation status. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 270-day period. Income tax forms 2012   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. Income tax forms 2012 See Application Procedures , earlier, for information needed to complete Form 1023. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 S. Income tax forms 2012 District Court or the U. Income tax forms 2012 S. Income tax forms 2012 Court of Federal Claims. Income tax forms 2012 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. Income tax forms 2012 For more information on these types of suits, get Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. Income tax forms 2012 In certain situations, your organization can file suit for a declaratory judgment in the U. Income tax forms 2012 S. Income tax forms 2012 District Court for the District of Columbia, the U. Income tax forms 2012 S. Income tax forms 2012 Court of Federal Claims, or the U. Income tax forms 2012 S. Income tax forms 2012 Tax Court. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 Adverse notice of final determination. Income tax forms 2012   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. Income tax forms 2012 Favorable court rulings - IRS procedure. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 A central organization is an organization that has one or more subordinates under its general supervision or control. Income tax forms 2012 A subordinate organization is a chapter, local, post, or unit of a central organization. Income tax forms 2012 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. Income tax forms 2012 A subordinate organization may or may not be incorporated, but it must have an organizing document. Income tax forms 2012 A subordinate that is organized and operated in a foreign country cannot be included in a group exemption letter. Income tax forms 2012 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). Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 You should make the application for such subordinates by letter instead of submitting either Form 1023 or 1024. Income tax forms 2012 This procedure relieves each of the subordinates covered by a group exemption letter from filing its own application. Income tax forms 2012 A central organization obtains its own recognition of exemption by sending its application to the IRS address shown on Form 8718 or Form 1023. Income tax forms 2012 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. Income tax forms 2012 It need not forward documents already submitted. Income tax forms 2012 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. Income tax forms 2012 Employer identification number. Income tax forms 2012   The central organization must have an EIN before it submits a completed exemption or group exemption application. Income tax forms 2012 Each subordinate must have its own EIN, even if it has no employees. Income tax forms 2012 When submitting its group exemption application, the central organization must provide an EIN for each subordinate organization. Income tax forms 2012 Information required for subordinate organizations. Income tax forms 2012   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. Income tax forms 2012 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. Income tax forms 2012 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). Income tax forms 2012 A detailed description of the purposes and activities of the subordinates, including the sources of receipts and the nature of expenditures. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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). Income tax forms 2012 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. Income tax forms 2012 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). Income tax forms 2012 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. Income tax forms 2012 B. Income tax forms 2012 230 and Revenue Procedure 75-50, 1975-2 C. Income tax forms 2012 B. Income tax forms 2012 587 (these requirements are fully described in chapter 3, under Private Schools ; see also Schedule B, Form 1023). Income tax forms 2012 For any school affiliated with a church, the information to show that the provisions of Revenue Ruling 75-231, 1975-1 C. Income tax forms 2012 B. Income tax forms 2012 158, have been met. Income tax forms 2012 A list of the names, mailing addresses, actual addresses if different, and EINs of subordinates to be included in the group exemption letter. Income tax forms 2012 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. Income tax forms 2012 New 501(c)(3) organizations that want to be included. Income tax forms 2012   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). Income tax forms 2012 The central organization must also include this subordinate in its next annual submission of information, as discussed later, under Information Required Annually . Income tax forms 2012 Keeping the Group Exemption Letter in Force Continued effectiveness of a group exemption letter is based on the following conditions. Income tax forms 2012 The continued existence of the central organization. Income tax forms 2012 The continued qualification of the central organization for exemption under section 501(c). Income tax forms 2012 The submission by the central organization of the information regarding its subordinate organizations that is required annually (described under Information Required Annually). Income tax forms 2012 The annual filing of an information return (Form 990, for example) by the central organization if required. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 Information about all changes in the purposes, character, or method of operation of the subordinates included in the group exemption letter. Income tax forms 2012 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. Income tax forms 2012 Subordinates that have changed their names or addresses during the year. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 An annotated directory of subordinates will not be accepted for this purpose. Income tax forms 2012 If there were none of the above changes, the central organization must submit a statement to that effect. Income tax forms 2012 The same information about new subordinates that was required in the initial application for group exemption. Income tax forms 2012 (This information is listed in items 1 through 10, under Information required for subordinate organizations. Income tax forms 2012 , earlier. Income tax forms 2012 ) 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 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. Income tax forms 2012 The notice, however, will be given only after the appeal procedures described earlier in this chapter are completed. Income tax forms 2012 Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in Utah

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available.  Services are limited and not all services are available at every TAC office.  Services may vary from site to site. You can get these services on a walk-in, non-advance appointment basis.

City  Street Address  Days/Hours of Service  Telephone* 
Ogden  324 25th St.
Ogden, UT 84401 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(801) 626-0753 
Provo  173 E. 100 North
Provo, UT 84606 

Monday-Friday - 9:00 a.m.-3:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

Services Provided

(801) 377-6971 
Salt Lake City  50 S. 200 East
Salt Lake City, UT 84111 

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

Services Provided

(801) 799-6963 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service:  Call (801) 799-6958 in Salt Lake City or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. 

For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
50 South 200 East, MS 6610SLC
Salt Lake City, UT 84111

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Income Tax Forms 2012

Income tax forms 2012 2. Income tax forms 2012   Foreclosures and Repossessions Table of Contents Amount realized and ordinary income on a recourse debt. Income tax forms 2012 Amount realized on a nonrecourse debt. Income tax forms 2012 If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Income tax forms 2012 The foreclosure or repossession is treated as a sale from which you may realize gain or loss. Income tax forms 2012 This is true even if you voluntarily return the property to the lender. Income tax forms 2012 If the outstanding loan balance was more than the FMV of the property and the lender cancels all or part of the remaining loan balance, you also may realize ordinary income from the cancellation of debt. Income tax forms 2012 You must report this income on your return unless certain exceptions or exclusions apply. Income tax forms 2012 See chapter 1 for more details. Income tax forms 2012 Borrower's gain or loss. Income tax forms 2012    You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale. Income tax forms 2012 The gain is the difference between the amount realized and your adjusted basis in the transferred property (amount realized minus adjusted basis). Income tax forms 2012 The loss is the difference between your adjusted basis in the transferred property and the amount realized (adjusted basis minus amount realized). Income tax forms 2012 For more information on figuring gain or loss from the sale of property, see Gain or Loss From Sales and Exchanges in Publication 544. Income tax forms 2012 You can use Table 1-1 to figure your ordinary income from the cancellation of debt and your gain or loss from a foreclosure or repossession. Income tax forms 2012 Amount realized and ordinary income on a recourse debt. Income tax forms 2012    If you are personally liable for the debt, the amount realized on the foreclosure or repossession includes the smaller of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The FMV of the transferred property. Income tax forms 2012 The amount realized also includes any proceeds you received from the foreclosure sale. Income tax forms 2012 If the FMV of the transferred property is less than the total outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, the difference is ordinary income from the cancellation of debt. Income tax forms 2012 You must report this income on your return unless certain exceptions or exclusions apply. Income tax forms 2012 See chapter 1 for more details. Income tax forms 2012       Example 1. Income tax forms 2012 Tara bought a new car for $15,000. Income tax forms 2012 She made a $2,000 downpayment and borrowed the remaining $13,000 from the dealer's credit company. Income tax forms 2012 Tara is personally liable for the loan (recourse debt) and the car is pledged as security for the loan. Income tax forms 2012 On August 1, 2013, the credit company repossessed the car because Tara had stopped making loan payments. Income tax forms 2012 The balance due after taking into account the payments Tara made was $10,000. Income tax forms 2012 The FMV of the car when it was repossessed was $9,000. Income tax forms 2012 On November 15, 2013, the credit company forgave the remaining $1,000 balance on the loan due to insufficient assets. Income tax forms 2012 In this case, the amount Tara realizes is $9,000. Income tax forms 2012 This is the smaller of: The $10,000 outstanding debt immediately before the repossession reduced by the $1,000 for which she remains personally liable immediately after the repossession ($10,000 − $1,000 = $9,000), or The $9,000 FMV of the car. Income tax forms 2012 Tara figures her gain or loss on the repossession by comparing the $9,000 amount realized with her $15,000 adjusted basis. Income tax forms 2012 She has a $6,000 nondeductible loss. Income tax forms 2012 After the cancellation of the remaining balance on the loan in November, Tara also has ordinary income from cancellation of debt in the amount of $1,000 (the remaining balance on the $10,000 loan after the $9,000 amount satisfied by the FMV of the repossessed car). Income tax forms 2012 Tara must report this $1,000 on her return unless one of the exceptions or exclusions described in chapter 1 applies. Income tax forms 2012 Example 2. Income tax forms 2012 Lili paid $200,000 for her home. Income tax forms 2012 She made a $15,000 downpayment and borrowed the remaining $185,000 from a bank. Income tax forms 2012 Lili is personally liable for the mortgage loan and the house secures the loan. Income tax forms 2012 In 2013, the bank foreclosed on the mortgage because Lili stopped making payments. Income tax forms 2012 When the bank foreclosed the mortgage, the balance due was $180,000, the FMV of the house was $170,000, and Lili's adjusted basis was $175,000 due to a casualty loss she had deducted. Income tax forms 2012 At the time of the foreclosure, the bank forgave $2,000 of the $10,000 debt in excess of the FMV ($180,000 minus $170,000). Income tax forms 2012 She remained personally liable for the $8,000 balance. Income tax forms 2012 In this case, Lili has ordinary income from the cancellation of debt in the amount of $2,000. Income tax forms 2012 The $2,000 income from the cancellation of debt is figured by subtracting the $170,000 FMV of the house from the $172,000 difference between her total outstanding debt immediately before the transfer of property and the amount for which she remains personally liable immediately after the transfer ($180,000 minus $8,000). Income tax forms 2012 She is able to exclude the $2,000 of canceled debt from her income under the qualified principal residence indebtedness rules discussed earlier. Income tax forms 2012 Lili must also determine her gain or loss from the foreclosure. Income tax forms 2012 In this case, the amount that she realizes is $170,000. Income tax forms 2012 This is the smaller of: (a) the $180,000 outstanding debt immediately before the transfer reduced by the $8,000 for which she remains personally liable immediately after the transfer ($180,000 − $8,000 = $172,000) or (b) the $170,000 FMV of the house. Income tax forms 2012 Lili figures her gain or loss on the foreclosure by comparing the $170,000 amount realized with her $175,000 adjusted basis. Income tax forms 2012 She has a $5,000 nondeductible loss. Income tax forms 2012 Table 1-1. Income tax forms 2012 Worksheet for Foreclosures and Repossessions Part 1. Income tax forms 2012 Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Income tax forms 2012 Otherwise, go to Part 2. Income tax forms 2012 1. Income tax forms 2012 Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property   2. Income tax forms 2012 Enter the fair market value of the transferred property   3. Income tax forms 2012 Ordinary income from the cancellation of debt upon foreclosure or repossession. Income tax forms 2012 * Subtract line 2 from line 1. Income tax forms 2012 If less than zero, enter zero. Income tax forms 2012 Next, go to Part 2   Part 2. Income tax forms 2012 Gain or loss from foreclosure or repossession. Income tax forms 2012   4. Income tax forms 2012 Enter the smaller of line 1 or line 2. Income tax forms 2012 If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property   5. Income tax forms 2012 Enter any proceeds you received from the foreclosure sale   6. Income tax forms 2012 Add line 4 and line 5   7. Income tax forms 2012 Enter the adjusted basis of the transferred property   8. Income tax forms 2012 Gain or loss from foreclosure or repossession. Income tax forms 2012 Subtract line 7 from line 6   * The income may not be taxable. Income tax forms 2012 See chapter 1 for more details. Income tax forms 2012 Amount realized on a nonrecourse debt. Income tax forms 2012    If you are not personally liable for repaying the debt secured by the transferred property, the amount you realize includes the full amount of the outstanding debt immediately before the transfer. Income tax forms 2012 This is true even if the FMV of the property is less than the outstanding debt immediately before the transfer. Income tax forms 2012 Example 1. Income tax forms 2012 Tara bought a new car for $15,000. Income tax forms 2012 She made a $2,000 downpayment and borrowed the remaining $13,000 from the dealer's credit company. Income tax forms 2012 Tara is not personally liable for the loan (nonrecourse), but pledged the new car as security for the loan. Income tax forms 2012 On August 1, 2013, the credit company repossessed the car because Tara had stopped making loan payments. Income tax forms 2012 The balance due after taking into account the payments Tara made was $10,000. Income tax forms 2012 The FMV of the car when it was repossessed was $9,000. Income tax forms 2012 The amount Tara realized on the repossession is $10,000. Income tax forms 2012 That is the outstanding amount of debt immediately before the repossession, even though the FMV of the car is less than $10,000. Income tax forms 2012 Tara figures her gain or loss on the repossession by comparing the $10,000 amount realized with her $15,000 adjusted basis. Income tax forms 2012 Tara has a $5,000 nondeductible loss. Income tax forms 2012 Example 2. Income tax forms 2012 Lili paid $200,000 for her home. Income tax forms 2012 She made a $15,000 downpayment and borrowed the remaining $185,000 from a bank. Income tax forms 2012 She is not personally liable for the loan, but grants the bank a mortgage. Income tax forms 2012 The bank foreclosed on the mortgage because Lili stopped making payments. Income tax forms 2012 When the bank foreclosed on the mortgage, the balance due was $180,000, the FMV of the house was $170,000, and Lili's adjusted basis was $175,000 due to a casualty loss she had deducted. Income tax forms 2012 The amount Lili realized on the foreclosure is $180,000, the outstanding debt immediately before the foreclosure. Income tax forms 2012 She figures her gain or loss by comparing the $180,000 amount realized with her $175,000 adjusted basis. Income tax forms 2012 Lili has a $5,000 realized gain. Income tax forms 2012 See Publication 523 to figure and report any taxable amount. Income tax forms 2012 Forms 1099-A and 1099-C. Income tax forms 2012    A lender who acquires an interest in your property in a foreclosure or repossession should send you Form 1099-A, Acquisition or Abandonment of Secured Property, showing information you need to figure your gain or loss. Income tax forms 2012 However, if the lender also cancels part of your debt and must file Form 1099-C, the lender can include the information about the foreclosure or repossession on that form instead of on Form 1099-A. Income tax forms 2012 The lender must file Form 1099-C and send you a copy if the amount of debt canceled is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Income tax forms 2012 For foreclosures or repossessions occurring in 2013, these forms should be sent to you by January 31, 2014. Income tax forms 2012 Prev  Up  Next   Home   More Online Publications