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Tax returns Publication 1544 - Main Content Table of Contents Why Report These Payments? Who Must File Form 8300?What Payments Must Be Reported? What Is Cash? Taxpayer Identification Number (TIN) What Is a Related Transaction? What About Suspicious Transactions? When, Where, and What To File Examples Penalties How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Tax returns Why Report These Payments? Drug dealers and smugglers often use large cash payments to “launder” money from illegal activities. Tax returns Laundering means converting “dirty” or illegally-gained money to “clean” money. Tax returns The government can often trace this laundered money through the payments you report. Tax returns Laws passed by Congress require you to report these payments. Tax returns Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities. Tax returns The USA PATRIOT Act of 2001 increased the scope of these laws to help trace funds used for terrorism. Tax returns Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. Tax returns For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. Tax returns Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. Tax returns However, you do not have to file Form 8300 if the transaction is not related to your trade or business. Tax returns For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. Tax returns Transaction defined. Tax returns A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. Tax returns Person defined. Tax returns A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. Tax returns Exempt organizations, including employee plans, are also “persons. Tax returns ” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. Tax returns Foreign transactions. Tax returns You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. Tax returns However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. Tax returns Bail received by court clerks. Tax returns Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: Any federal offense involving a controlled substance, Racketeering, Money laundering, and Any state offense substantially similar to (1), (2), or (3) above. Tax returns For more information about the rules that apply to court clerks, see Section 1. Tax returns 6050I-2 of the Income Tax Regulations. Tax returns What Payments Must Be Reported? You must file Form 8300 to report cash paid to you if it is: Over $10,000, Received as: One lump sum of over $10,000, Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000, or Other previously unreportable payments that cause the total cash received within a 12-month period to total more than $10,000, Received in the course of your trade or business, Received from the same buyer (or agent), and Received in a single transaction or in related transactions (defined later). Tax returns What Is Cash? Cash is: The coins and currency of the United States (and any other country), and A cashier's check, bank draft, traveler's check, or money order you receive, if it has a face amount of $10,000 or less and you receive it in: A designated reporting transaction (defined later), or Any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300. Tax returns Cash may include a cashier's check even if it is called a “treasurer's check” or “bank check. Tax returns ” Cash does not include a check drawn on an individual's personal account. Tax returns A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. Tax returns These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Form 104. Tax returns Example 1. Tax returns You are a coin dealer. Tax returns Bob Green buys gold coins from you for $13,200. Tax returns He pays for them with $6,200 in U. Tax returns S. Tax returns currency and a cashier's check having a face amount of $7,000. Tax returns The cashier's check is treated as cash. Tax returns You have received more than $10,000 cash and must file Form 8300 for this transaction. Tax returns Example 2. Tax returns You are a retail jeweler. Tax returns Mary North buys an item of jewelry from you for $12,000. Tax returns She pays for it with a personal check payable to you in the amount of $9,600 and traveler's checks totaling $2,400. Tax returns Because the personal check is not treated as cash, you have not received more than $10,000 cash in the transaction. Tax returns You do not have to file Form 8300. Tax returns Example 3. Tax returns You are a boat dealer. Tax returns Emily Jones buys a boat from you for $16,500. Tax returns She pays for it with a cashier's check payable to you in the amount of $16,500. Tax returns The cashier's check is not treated as cash because its face amount is more than $10,000. Tax returns You do not have to file Form 8300 for this transaction. Tax returns Designated Reporting Transaction A designated reporting transaction is the retail sale of any of the following: A consumer durable, such as an automobile or boat. Tax returns A consumer durable is property, other than land or buildings, that: Is suitable for personal use, Can reasonably be expected to last at least 1 year under ordinary use, Has a sales price of more than $10,000, and Can be seen or touched (tangible property). Tax returns For example, a $20,000 car is a consumer durable, but a $20,000 dump truck or factory machine is not. Tax returns The car is a consumer durable even if you sell it to a buyer who will use it in a business. Tax returns A collectible (for example, a work of art, rug, antique, metal, gem, stamp, or coin). Tax returns Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction (or related transactions) is more than $10,000. Tax returns To figure the total sales price of all items sold for a trip or entertainment event, you include the sales price of items such as airfare, hotel rooms, and admission tickets. Tax returns Example. Tax returns You are a travel agent. Tax returns Ed Johnson asks you to charter a passenger airplane to take a group to a sports event in another city. Tax returns He also asks you to book hotel rooms and admission tickets for the group. Tax returns In payment, he gives you two money orders, each for $6,000. Tax returns You have received more than $10,000 cash in this designated reporting transaction. Tax returns You must file Form 8300. Tax returns Retail sale. Tax returns The term “retail sale” means any sale made in the course of a trade or business that consists mainly of making sales to ultimate consumers. Tax returns Thus, if your business consists mainly of making sales to ultimate consumers, all sales you make in the course of that business are retail sales. Tax returns This includes any sales of items that will be resold. Tax returns Broker or intermediary. Tax returns A designated reporting transaction includes the retail sale of items (1), (2), or (3) of the preceding list, even if the funds are received by a broker or other intermediary, rather than directly by the seller. Tax returns Exceptions to Definition of Cash A cashier's check, bank draft, traveler's check, or money order you received in a designated reporting transaction is not treated as cash if one of the following exceptions applies. Tax returns Exception for certain bank loans. Tax returns A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is the proceeds from a bank loan. Tax returns As proof that it is from a bank loan, you may rely on a copy of the loan document, a written statement or lien instruction from the bank, or similar proof. Tax returns Example. Tax returns You are a car dealer. Tax returns Mandy White buys a new car from you for $11,500. Tax returns She pays you with $2,000 of U. Tax returns S. Tax returns currency and a cashier's check for $9,500 payable to you and her. Tax returns You can tell that the cashier's check is the proceeds of a bank loan because it includes instructions to you to have a lien put on the car as security for the loan. Tax returns For this reason, the cashier's check is not treated as cash. Tax returns You do not have to file Form 8300 for the transaction. Tax returns Exception for certain installment sales. Tax returns A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is received in payment on a promissory note or an installment sales contract (including a lease that is considered a sale for federal tax purposes). Tax returns However, this exception applies only if: You use similar notes or contracts in other sales to ultimate consumers in the ordinary course of your trade or business, and The total payments for the sale that you receive on or before the 60th day after the sale are 50% or less of the purchase price. Tax returns Exception for certain down payment plans. Tax returns A cashier's check, bank draft, traveler's check, or money order is not treated as cash if you received it in payment for a consumer durable or collectible, and all three of the following statements are true. Tax returns You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the date of sale. Tax returns You receive it more than 60 days before the date of sale. Tax returns You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. Tax returns Exception for travel and entertainment. Tax returns A cashier's check, bank draft, traveler's check, or money order received for travel or entertainment is not treated as cash if all three of the following statements are true. Tax returns You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the earliest date that any travel or entertainment item (such as airfare) is furnished for the trip or entertainment event. Tax returns You receive it more than 60 days before the date on which the final payment is due. Tax returns You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. Tax returns Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. Tax returns If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. Tax returns If you do not know a person's TIN, you have to ask for it. Tax returns You may be subject to penalties for an incorrect or missing TIN. Tax returns There are three types of TINs. Tax returns The TIN for an individual, including a sole proprietor, is the individual's social security number (SSN). Tax returns The TIN for a nonresident alien individual who needs a TIN but is not eligible to get an SSN is an IRS individual taxpayer identification number (ITIN). Tax returns An ITIN has nine digits, similar to an SSN. Tax returns The TIN for other persons, including corporations, partnerships, and estates, is the employer identification number (EIN). Tax returns Exception. Tax returns You are not required to provide the TIN of a person who is a nonresident alien individual or a foreign organization if that person or foreign organization: Does not have income effectively connected with the conduct of a U. Tax returns S. Tax returns trade or business; Does not have an office or place of business, or a fiscal or paying agent in the United States; Does not file a federal tax return; Does not furnish a withholding certificate described in §1. Tax returns 1441-1(e)(2) or (3) or 1. Tax returns 1441-5(c)(2)(iv) or (3)(iii) to the extent required under 1. Tax returns 1441-1(e)(4)(vii); Does not have to furnish a TIN on any return, statement, or other document as required by the income tax regulations under section 897 or 1445; or In the case of a nonresident alien individual, the individual has not chosen to file a joint federal income tax return with a spouse who is a U. Tax returns S. Tax returns citizen or resident. Tax returns What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. Tax returns If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. Tax returns For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. Tax returns Because they total $12,000 (more than $10,000), you must file Form 8300. Tax returns More than 24 hours between transactions. Tax returns Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. Tax returns For example, you are a travel agent. Tax returns A client pays you $8,000 in cash for a trip. Tax returns Two days later, the same client pays you $3,000 more in cash to include another person on the trip. Tax returns These are related transactions, and you must file Form 8300 to report them. Tax returns What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious. Tax returns A transaction is suspicious if it appears that a person is trying to cause you not to file Form 8300 or is trying to cause you to file a false or incomplete Form 8300, or if there is a sign of possible illegal activity. Tax returns If you are suspicious, you are encouraged to call the local IRS Criminal Investigation Division as soon as possible. Tax returns Or, you can call the FinCEN Financial Institution Hotline toll free at 1-866-556-3974. Tax returns When, Where, and What To File The amount you receive and when you receive it determine when you must file. Tax returns Generally, you must file Form 8300 within 15 days after receiving a payment. Tax returns If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. Tax returns More than one payment. Tax returns In some transactions, the buyer may arrange to pay you in cash installment payments. Tax returns If the first payment is more than $10,000, you must file Form 8300 within 15 days. Tax returns If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. Tax returns When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. Tax returns After you file Form 8300, you must start a new count of cash payments received from that buyer. Tax returns If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. Tax returns You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. Tax returns If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. Tax returns Example. Tax returns On January 10, you receive a cash payment of $11,000. Tax returns You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. Tax returns By January 25, you must file a Form 8300 for the $11,000 payment. Tax returns By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. Tax returns Amending a Report? If you are amending a report, check box 1a at the top of Form 8300. Tax returns Complete the form in its entirety (Parts I-IV) and include the amended information. Tax returns Do not attach a copy of the original report. Tax returns Where to file. Tax returns Mail the form to the address given in the Form 8300 instructions. Tax returns Required statement to buyer. Tax returns You must give a written or electronic statement to each person named on any Form 8300 you must file. Tax returns You can give the statement electronically only if the recipient agrees to receive it in that format. Tax returns The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. Tax returns It must state that you are also reporting this information to the IRS. Tax returns You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. Tax returns You must keep a copy of every Form 8300 you file for 5 years. Tax returns Examples Example 1. Tax returns Pat Brown is the sales manager for Small Town Cars. Tax returns On January 6, 2009, Jane Smith buys a new car from Pat and pays $18,000 in cash. Tax returns Pat asks for identification from Jane to get the necessary information to complete Form 8300. Tax returns A filled-in form is shown in this publication. Tax returns Pat must mail the form to the address shown in the form's instructions by January 21, 2009. Tax returns He must also send a statement to Jane by January 31, 2010. Tax returns Example 2. Tax returns Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. Tax returns Pat would have to file a Form 8300 by February 26 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2009, is a Saturday). Tax returns Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. Tax returns However, he could report it if he felt it was a suspicious transaction. Tax returns Penalties There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. Tax returns If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: $25,000, or The amount of cash you received and were required to report (up to $100,000). Tax returns There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. Tax returns If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. Tax returns These dollar amounts are based on Section 3571 of Title 18 of the U. Tax returns S. Tax returns Code. Tax returns The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. Tax returns This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. Tax returns Structuring means breaking up a large cash transaction into small cash transactions. Tax returns How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Tax returns By selecting the method that is best for you, you will have quick and easy access to tax help. Tax returns Free help with your return. Tax returns Free help in preparing your return is available nationwide from IRS-certified volunteers. Tax returns The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Tax returns 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. Tax returns To find the nearest VITA or TCE site, visit IRS. Tax returns gov or call 1-800-906-9887 or 1-800-829-1040. Tax returns As part of the TCE program, AARP offers the Tax-Aide counseling program. Tax returns To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. Tax returns aarp. Tax returns org/money/taxaide. Tax returns For more information on these programs, go to IRS. Tax returns gov and enter keyword “VITA” in the upper right-hand corner. Tax returns Internet. Tax returns You can access the IRS website at IRS. Tax returns gov 24 hours a day, 7 days a week to: Check the status of your 2011 refund. Tax returns Go to IRS. Tax returns gov and click on Where's My Refund. Tax returns Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Tax returns If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Tax returns Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Tax returns E-file your return. Tax returns Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Tax returns Download forms, including talking tax forms, instructions, and publications. Tax returns Order IRS products online. Tax returns Research your tax questions online. Tax returns Search publications online by topic or keyword. Tax returns Use the online Internal Revenue Code, regulations, or other official guidance. Tax returns View Internal Revenue Bulletins (IRBs) published in the last few years. Tax returns Figure your withholding allowances using the withholding calculator online at www. Tax returns irs. Tax returns gov/individuals. Tax returns Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at www. Tax returns irs. Tax returns gov/individuals. Tax returns Sign up to receive local and national tax news by email. Tax returns Get information on starting and operating a small business. Tax returns Phone. Tax returns Many services are available by phone. Tax returns Ordering forms, instructions, and publications. Tax returns Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. Tax returns You should receive your order within 10 days. Tax returns Asking tax questions. Tax returns Call the IRS with your tax questions at 1-800-829-1040. Tax returns Solving problems. Tax returns You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Tax returns An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Tax returns Call your local Taxpayer Assistance Center for an appointment. Tax returns To find the number, go to www. Tax returns irs. Tax returns gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Tax returns TTY/TDD equipment. Tax returns If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Tax returns TeleTax topics. Tax returns Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Tax returns Refund information. Tax returns You can check the status of your refund on the new IRS phone app. Tax returns Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. Tax returns IRS2Go is a new way to provide you with information and tools. Tax returns To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Tax returns Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Tax returns If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Tax returns Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Tax returns If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. Tax returns Other refund information. Tax returns To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. Tax returns Evaluating the quality of our telephone services. Tax returns To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Tax returns One method is for a second IRS representative to listen in on or record random telephone calls. Tax returns Another is to ask some callers to complete a short survey at the end of the call. Tax returns Walk-in. Tax returns Many products and services are available on a walk-in basis. Tax returns Products. Tax returns You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Tax returns Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Tax returns Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Tax returns Services. Tax returns You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Tax returns An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Tax returns If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Tax returns No appointment is necessary—just walk in. Tax returns If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Tax returns A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Tax returns If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. Tax returns All other issues will be handled without an appointment. Tax returns To find the number of your local office, go to www. Tax returns irs. Tax returns gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Tax returns Mail. Tax returns You can send your order for forms, instructions, and publications to the address below. Tax returns You should receive a response within 10 days after your request is received. Tax returns Internal Revenue Service 1201 N. Tax returns Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. Tax returns The Taxpayer Advocate Service (TAS) is your voice at the IRS. Tax returns Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. Tax returns We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. Tax returns Remember, the worst thing you can do is nothing at all. Tax returns TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. Tax returns You face (or your business is facing) an immediate threat of adverse action. Tax returns You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. Tax returns If you qualify for our help, we’ll do everything we can to get your problem resolved. Tax returns You will be assigned to one advocate who will be with you at every turn. Tax returns We have offices in every state, the District of Columbia, and Puerto Rico. Tax returns Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. Tax returns And our services are always free. Tax returns As a taxpayer, you have rights that the IRS must abide by in its dealings with you. Tax returns Our tax toolkit at www. Tax returns TaxpayerAdvocate. Tax returns irs. Tax returns gov can help you understand these rights. Tax returns If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. Tax returns irs. Tax returns gov/advocate. Tax returns You can also call our toll-free number at 1-877-777-4778. Tax returns TAS also handles large-scale or systemic problems that affect many taxpayers. Tax returns If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Tax returns irs. Tax returns gov/advocate. Tax returns Low Income Taxpayer Clinics (LITCs). Tax returns Low Income Taxpayer Clinics (LITCs) are independent from the IRS. Tax returns Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. Tax returns These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. Tax returns Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. Tax returns For more information and to find a clinic near you, see the LITC page on www. Tax returns irs. Tax returns gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. Tax returns This publication is also available by calling 1-800-829-3676 or at your local IRS office. Tax returns Free tax services. Tax returns Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Tax returns Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Tax returns The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Tax returns The majority of the information and services listed in this publication are available to you free of charge. Tax returns If there is a fee associated with a resource or service, it is listed in the publication. Tax returns Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Tax returns DVD for tax products. Tax returns You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Tax returns Prior-year forms, instructions, and publications. Tax returns Tax Map: an electronic research tool and finding aid. Tax returns Tax law frequently asked questions. Tax returns Tax Topics from the IRS telephone response system. Tax returns Internal Revenue Code—Title 26 of the U. Tax returns S. Tax returns Code. Tax returns Links to other Internet based Tax Research Materials. Tax returns Fill-in, print, and save features for most tax forms. Tax returns Internal Revenue Bulletins. Tax returns Toll-free and email technical support. Tax returns Two releases during the year. Tax returns – The first release will ship the beginning of January. Tax returns – The final release will ship the beginning of March. Tax returns Purchase the DVD from National Technical Information Service (NTIS) at www. Tax returns irs. Tax returns gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Tax returns This image is too large to be displayed in the current screen. Tax returns Please click the link to view the image. Tax returns Fill-in Form 8300 Prev Up Next Home More Online Publications
Can I Claim a Deduction For Student Loan Interest?
Information you will need:
- Filing status
- Basic income information
- Your adjusted gross income
- Educational expenses paid with nontaxable funds
Estimated Completion Time: 10 minutes. However: 5 minutes of inactivity will end the interview and you will be forced to start over.
Page Last Reviewed or Updated: 14-Feb-2014
The Tax Returns
Tax returns 2. Tax returns Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. Tax returns Employment Tax ReturnsException. Tax returns FUTA tax exception. Tax returns FICA tax exemption election. Tax returns Revoking the election. Tax returns Definitions. Tax returns Effect on employees. Tax returns Political Organization Income Tax ReturnExempt function. Tax returns Political organization taxable income. Tax returns Separate fund. Tax returns Failure to file. Tax returns Failure to pay on time. Tax returns Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. Tax returns Publicly traded securities. Tax returns Exceptions. Tax returns Form 8283. Tax returns Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. Tax returns Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. Tax returns S. Tax returns Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. Tax returns Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. Tax returns S. Tax returns Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. Tax returns B. Tax returns 418, www. Tax returns irs. Tax returns gov/pub/irs-tege/rp1995-48. Tax returns pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. Tax returns S. Tax returns possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. Tax returns Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. Tax returns If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. Tax returns On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). Tax returns Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. Tax returns Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. Tax returns Form 990-N is due by the 15th day of the fifth month after the close of the tax year. Tax returns For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. Tax returns To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. Tax returns Exceptions. Tax returns This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. Tax returns Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. Tax returns Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. Tax returns The following political organizations are not required to file Form 990 or Form 990-EZ. Tax returns A state or local committee of a political party. Tax returns A political committee of a state or local candidate. Tax returns A caucus or association of state or local officials. Tax returns A political organization that is required to report as a political committee under the Federal Election Campaign Act. Tax returns A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. Tax returns Form 990-EZ. Tax returns This is a shortened version of Form 990. Tax returns It is designed for use by small exempt organizations and nonexempt charitable trusts. Tax returns Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. Tax returns Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. Tax returns If your organization does not meet either of these conditions, you cannot file Form 990-EZ. Tax returns Instead you must file Form 990. Tax returns Group return. Tax returns A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. Tax returns This return is in addition to the central organization's separate annual return if it must file a return. Tax returns It cannot be included in the group return. Tax returns See the instructions for Form 990 for the conditions under which this procedure may be used. Tax returns In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. Tax returns Schedule A (Form 990 or 990-EZ). Tax returns Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. Tax returns Schedule B (Form 990, Form 990-EZ, or 990-PF). Tax returns Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. Tax returns Schedule O (Form 990). Tax returns Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. Tax returns Other schedules may be required to be filed with Form 990 or 990-EZ. Tax returns See the instructions for Form 990 or the instructions for Form 990-EZ for more information. Tax returns Report significant new or changed program services and changes to organizational documents. Tax returns An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. Tax returns EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. Tax returns See Miscellaneous Rules, Organization Changes and Exempt Status, later. Tax returns Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. Tax returns These organizations are discussed in chapter 3. Tax returns Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. Tax returns If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. Tax returns See Regulations section 301. Tax returns 6033-4 for more information. Tax returns The IRS may waive the requirement to file electronically in cases of undue hardship. Tax returns For information on filing a waiver, see Notice 2010-13, 2010-4 I. Tax returns R. Tax returns B. Tax returns 327, available at www. Tax returns irs. Tax returns gov/ir/2010-04_IRSB/ar14. Tax returns html. Tax returns Form 990. Tax returns An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. Tax returns Form 990-PF. Tax returns An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. Tax returns Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. Tax returns Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. Tax returns Extension of time to file. Tax returns Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. Tax returns Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. Tax returns For more information, see Form 8868 and its instructions. Tax returns When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. Tax returns However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. Tax returns Application for exemption pending. Tax returns An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. Tax returns If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. Tax returns For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. Tax returns State reporting requirements. Tax returns Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. Tax returns See the instructions for those forms. Tax returns Form 8870. Tax returns Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. Tax returns For more information, see Form 8870 and the instructions for that form. Tax returns Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. Tax returns The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. Tax returns gov. Tax returns This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. Tax returns The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. Tax returns It also includes the effective date of the automatic revocation and the date it was posted to the list. Tax returns The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. Tax returns Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. Tax returns S. Tax returns Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. Tax returns S. Tax returns Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. Tax returns In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). Tax returns An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). Tax returns In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. Tax returns For more information about automatic revocation, go to IRS. Tax returns gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. Tax returns Penalties Penalties for failure to file. Tax returns Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. Tax returns The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. Tax returns Maximum penalty. Tax returns The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. Tax returns Organization with gross receipts over $1 million. Tax returns For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. Tax returns Managers. Tax returns If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. Tax returns Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. Tax returns The penalty is $10 a day for each day that a return is not filed after the period given for filing. Tax returns The maximum penalty imposed on all persons with respect to any one return is $5,000. Tax returns Exception for reasonable cause. Tax returns No penalty will be imposed if reasonable cause for failure to file timely can be shown. Tax returns Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. Tax returns Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Tax returns If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. Tax returns Estimated tax. Tax returns Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. Tax returns Use Form 990-W to figure your organization's estimated tax payments. Tax returns Travel tour programs. Tax returns Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. Tax returns Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. Tax returns Example. Tax returns ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). Tax returns As part of its activities, ABC operates a travel tour program. Tax returns The program is open to all current members of ABC and their guests. Tax returns ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. Tax returns Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. Tax returns XYZ pays ABC a per person fee for each participant. Tax returns Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. Tax returns The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. Tax returns Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. Tax returns Therefore, ABC's tour program is an unrelated trade or business. Tax returns For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. Tax returns Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. Tax returns For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. Tax returns Small Business Health Care Tax Credit. Tax returns If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. Tax returns Go to IRS. Tax returns gov and select Affordable Care Act Tax Provisions for more details. Tax returns See Small Business Health Care Tax Credit at www. Tax returns irs. Tax returns gov/newsroom/article/0,,id=223666,00. Tax returns html. Tax returns Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. Tax returns The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). Tax returns The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. Tax returns The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. Tax returns This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. Tax returns The credit can be as high as $6,240 for qualified tax-exempt organizations. Tax returns The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. Tax returns The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. Tax returns All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. Tax returns The process for certifying veterans for this credit is the same for all employers. Tax returns For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. Tax returns Notice 2012-13, 2012-9 I. Tax returns R. Tax returns B. Tax returns 421, also provides additional guidance on submission Form 8850. Tax returns Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. Tax returns 22, 2011, and before January 1, 2013. Tax returns After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. Tax returns File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. Tax returns It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. Tax returns In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. Tax returns Trust fund recovery penalty. Tax returns If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. Tax returns The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. Tax returns The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. Tax returns Exception. Tax returns The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. Tax returns This exception does not apply if it results in no one being liable for the penalty. Tax returns FICA and FUTA tax exceptions. Tax returns Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. Tax returns FUTA tax exception. Tax returns Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. Tax returns FICA tax exemption election. Tax returns Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. Tax returns To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. Tax returns The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. Tax returns The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. Tax returns Revoking the election. Tax returns The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. Tax returns Such revocation will apply retroactively to the beginning of the 2-year period. Tax returns Definitions. Tax returns For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. Tax returns The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. Tax returns Effect on employees. Tax returns If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. Tax returns However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. Tax returns The tax applies to income of $108. Tax returns 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. Tax returns Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. Tax returns Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. Tax returns Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. Tax returns S. Tax returns Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. Tax returns A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. Tax returns See Forms 990 and 990-EZ , earlier. Tax returns Political organization. Tax returns A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. Tax returns Exempt function. Tax returns An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. Tax returns It also includes certain office expenses of a holder of public office or an office in a political organization. Tax returns Certain political organizations are required to notify the IRS that they are section 527 organizations. Tax returns These organizations must use Form 8871. Tax returns Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. Tax returns For a discussion on these forms, see Reporting Requirements for a Political Organization, later. Tax returns Political organization taxable income. Tax returns Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. Tax returns To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. Tax returns Exempt organization not a political organization. Tax returns An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. Tax returns These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. Tax returns Separate fund. Tax returns A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. Tax returns The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. Tax returns Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. Tax returns Due date. Tax returns Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. Tax returns Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. Tax returns If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. Tax returns Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. Tax returns Extension of time to file. Tax returns Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. Tax returns The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. Tax returns Failure to file. Tax returns A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. Tax returns For more information about filing Form 1120-POL, refer to the instructions accompanying the form. Tax returns Failure to pay on time. Tax returns An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. Tax returns The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. Tax returns Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. Tax returns The organization is also required to periodically report certain contributions received and expenditures made by the organization. Tax returns To notify the IRS of section 527 treatment, an organization must file Form 8871. Tax returns To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. Tax returns Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. Tax returns However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. Tax returns It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. Tax returns S. Tax returns C. Tax returns 431(4)). Tax returns It is a state or local candidate committee. Tax returns It is a state or local committee of a political party. Tax returns It is a section 501(c) organization that has made an “exempt function expenditure. Tax returns ” All other political organizations are required to file Form 8871. Tax returns An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. Tax returns Employer identification number. Tax returns If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. Tax returns IRS. Tax returns gov/businesses/small. Tax returns By telephone at 1-800-829-4933 from 7:00 a. Tax returns m. Tax returns to 10:00 p. Tax returns m. Tax returns in the organization's local time zone. Tax returns By mailing or faxing Form SS-4. Tax returns 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. Tax returns Due dates. Tax returns The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. Tax returns If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. Tax returns When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. Tax returns If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. Tax returns How to file. Tax returns An organization must file Form 8871 electronically via the IRS Internet website at www. Tax returns IRS. Tax returns gov/polorgs (Keyword: political orgs). Tax returns Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. Tax returns After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. Tax returns Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. Tax returns Penalties Failure to file. Tax returns An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. Tax returns Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. Tax returns Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. Tax returns If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. Tax returns The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. Tax returns Fraudulent returns. Tax returns Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. Tax returns Waiver of penalties. Tax returns The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. Tax returns Additional information. Tax returns For more information on Form 8871, see the form and its instructions. Tax returns For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. Tax returns Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). Tax returns A political organization that is subject to tax on its income because it did not file or amend Form 8871. Tax returns A qualified state or local political organization (QSLPO), discussed below. Tax returns All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. Tax returns Qualified state or local political organization. Tax returns A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). Tax returns It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. Tax returns The state agency and the organization make the reports publicly available. Tax returns No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. Tax returns Information required on Form 8872. Tax returns If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. Tax returns If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. Tax returns For additional information that is required, see Form 8872. Tax returns Due dates. Tax returns The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). Tax returns If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. Tax returns Election year filing. Tax returns In election years, Form 8872 must be filed on either a quarterly or a monthly basis. Tax returns Both a pre-election report and a post-election report are also required to be filed in an election year. Tax returns An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). Tax returns Nonelection year filing. Tax returns In nonelection years, the form must be filed on a semiannual or monthly basis. Tax returns A complete listing of these filing periods are in the Form 8872 Instructions. Tax returns A nonelection year is any odd-numbered year. Tax returns How to file. Tax returns Form 8872 can be filed either electronically or by mail. Tax returns However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. Tax returns To file by mail, send Form 8872 to the: Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. Tax returns File electronically via the IRS internet website at www. Tax returns IRS. Tax returns gov/polorgs. Tax returns You will need a user ID and password to electronically file Form 8872. Tax returns Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. Tax returns Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. Tax returns If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. Tax returns You can also fax your request to (801) 620-3249. Tax returns It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. Tax returns Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. Tax returns The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. Tax returns Fraudulent returns. Tax returns Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. Tax returns Waiver of penalties. Tax returns The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. Tax returns Donee Information Return Dispositions of donated property. Tax returns If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. Tax returns However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. Tax returns Form 8282 must be filed with the IRS within 125 days after the disposition. Tax returns Additionally, a copy of Form 8282 must be given to the donor. Tax returns If the organization fails to file the required information return, penalties may apply. Tax returns Charitable deduction property. Tax returns This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. Tax returns Publicly traded securities. Tax returns These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. Tax returns Appraisal summary. Tax returns If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. Tax returns below. Tax returns Exceptions. Tax returns A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. Tax returns 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. Tax returns The donee organization is not a qualified appraiser for the purpose of valuing the donated property. Tax returns For more information, get Publication 561, Determining the Value of Donated Property. Tax returns Form 8283. Tax returns For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. Tax returns The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. Tax returns The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. Tax returns The signature does not represent concurrence in the appraised value of the contributed property. Tax returns A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. Tax returns The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. Tax returns A copy of Form 8283 must be given to the donee. Tax returns Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. Tax returns In other situations, the donee organization is required to provide information to the donor. Tax returns A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. Tax returns (See Disclosure statement. Tax returns later. Tax returns ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. Tax returns See Quid pro quo contribution below for an example. Tax returns Failure to make the required disclosure may result in a penalty to the organization. Tax returns A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. Tax returns In certain circumstances, an organization may be able to meet both of these requirements with the same written document. Tax returns Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. Tax returns Quid pro quo contribution. Tax returns A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. Tax returns Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. Tax returns Generally, a written statement is required for each payment, whenever the contribution portion is over $75. Tax returns Example. Tax returns If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. Tax returns In this example, the charitable part of the payment is $60. Tax returns Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. Tax returns If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. Tax returns Disclosure statement. Tax returns The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. Tax returns The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. Tax returns If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. Tax returns No disclosure statement is required if any of the following are true. Tax returns The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. Tax returns B. Tax returns 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. Tax returns B. Tax returns 507 (as adjusted for inflation), Revenue Procedure 92-49. Tax returns There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). Tax returns There is only an intangible religious benefit provided to the donor. Tax returns The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. Tax returns For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. Tax returns A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. Tax returns The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. Tax returns Good faith estimate of fair market value (FMV). Tax returns An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. Tax returns The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. Tax returns Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. Tax returns Example 1. Tax returns A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. Tax returns The tennis professional provides 1-hour lessons on a commercial basis for $100. Tax returns A good faith estimate of the lesson's FMV is $100. Tax returns Example 2. Tax returns For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. Tax returns A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. Tax returns If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. Tax returns Example 3. Tax returns For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. Tax returns The artist does not provide tours on a commercial basis. Tax returns Tours of the museum normally are free to the public. Tax returns A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. Tax returns Penalty for failure to disclose. Tax returns A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. Tax returns The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. Tax returns The charity can avoid the penalty if it can show that the failure was due to reasonable cause. Tax returns Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. Tax returns The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. Tax returns The donor is responsible for requesting and obtaining the written acknowledgment from the donee. Tax returns A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. Tax returns Quid pro quo contribution. Tax returns If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. Tax returns See Disclosure of Quid Pro Quo Contributions earlier. Tax returns Form of acknowledgment. Tax returns Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. Tax returns For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. Tax returns Cash contributions. Tax returns To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. Tax returns In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. Tax returns Contributions by payroll deduction. Tax returns An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. Tax returns For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. Tax returns The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. Tax returns Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. Tax returns The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. Tax returns See section 3. Tax returns 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. Tax returns Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. Tax returns The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. Tax returns The organization must file the report on Copy A of Form 1098-C. Tax returns An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. Tax returns S. Tax returns Information Returns. Tax returns See the Instructions for Form 1096 for the correct filing location. Tax returns An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. Tax returns Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. Tax returns IRS. Tax returns gov/pub/irs-pdf/p1220. Tax returns pdf. Tax returns Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. Tax returns However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. Tax returns See the Instructions for Form 1098-C. Tax returns Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. Tax returns The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. Tax returns For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. Tax returns R. Tax returns B. Tax returns 1287, at www. Tax returns irs. Tax returns gov/irb/2005-25_IRB/2005-25_IRB/ar09. Tax returns html. Tax returns Material improvements or significant intervening use. Tax returns To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. Tax returns Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. Tax returns For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. Tax returns Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. Tax returns Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. Tax returns Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. Tax returns Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. Tax returns To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. Tax returns Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. Tax returns Penalties. Tax returns If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. Tax returns Other penalties may apply. Tax returns See Part O in the 2012 General Instructions for Certain Information Returns. Tax returns An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. Tax returns If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. Tax returns Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. Tax returns The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. Tax returns 6%. Tax returns The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. Tax returns 6%. Tax returns Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. Tax returns The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. Tax returns To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. Tax returns Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. Tax returns Form 8899. Tax returns Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. Tax returns This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. Tax returns Qualified donee income. Tax returns Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. Tax returns Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of