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Amend 2012 Tax Return Online

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Amend 2012 Tax Return Online

Amend 2012 tax return online 11. Amend 2012 tax return online   Your Rights as a Taxpayer Table of Contents Declaration of Taxpayer Rights Examinations, Appeals, Collections, and RefundsBy mail. Amend 2012 tax return online By interview. Amend 2012 tax return online Repeat examinations. Amend 2012 tax return online The first part of this chapter explains some of your most important rights as a taxpayer. Amend 2012 tax return online The second part explains the examination, appeal, collection, and refund processes. Amend 2012 tax return online Declaration of Taxpayer Rights Protection of your rights. Amend 2012 tax return online   IRS employees will explain and protect your rights as a taxpayer throughout your contact with us. Amend 2012 tax return online Privacy and confidentiality. Amend 2012 tax return online   The IRS will not disclose to anyone the information you give us, except as authorized by law. Amend 2012 tax return online You have the right to know why we are asking you for information, how we will use it, and what happens if you do not provide requested information. Amend 2012 tax return online Professional and courteous service. Amend 2012 tax return online   If you believe that an IRS employee has not treated you in a professional, fair, and courteous manner, you should tell that employee's supervisor. Amend 2012 tax return online If the supervisor's response is not satisfactory, you should write to the IRS director for your area or the center where you file your return. Amend 2012 tax return online Representation. Amend 2012 tax return online   You can either represent yourself or, with proper written authorization, have someone else represent you in your place. Amend 2012 tax return online Your representative must be a person allowed to practice before the IRS, such as an attorney, certified public accountant, or enrolled agent. Amend 2012 tax return online If you are in an interview and ask to consult such a person, then we must stop and reschedule the interview in most cases. Amend 2012 tax return online   You can have someone accompany you at an interview. Amend 2012 tax return online You can make sound recordings of any meetings with our examination, appeal, or collection personnel, provided you tell us in writing 10 days before the meeting. Amend 2012 tax return online Payment of only the correct amount of tax. Amend 2012 tax return online   You are responsible for paying only the correct amount of tax due under the law—no more, no less. Amend 2012 tax return online If you cannot pay all of your tax when it is due, you may be able to make monthly installment payments. Amend 2012 tax return online Help with unresolved tax problems. Amend 2012 tax return online   The Taxpayer Advocate Service can help you if you have tried unsuccessfully to resolve a problem with the IRS. Amend 2012 tax return online Your local Taxpayer Advocate can offer you special help if you have a significant hardship as a result of a tax problem. Amend 2012 tax return online For more information, call toll free 1-877-777-4778 (1-800-829-4059 for TTY/TDD) or write to the Taxpayer Advocate at the IRS office that last contacted you. Amend 2012 tax return online Appeals and judicial review. Amend 2012 tax return online   If you disagree with us about the amount of your tax liability or certain collection actions, you have the right to ask the Appeals Office to review your case. Amend 2012 tax return online You can also ask a court to review your case. Amend 2012 tax return online Relief from certain penalties and interest. Amend 2012 tax return online   The IRS will waive penalties when allowed by law if you can show you acted reasonably and in good faith or relied on the incorrect advice of an IRS employee. Amend 2012 tax return online We will waive interest that is the result of certain errors or delays caused by an IRS employee. Amend 2012 tax return online Examinations, Appeals, Collections, and Refunds Examinations (audits). Amend 2012 tax return online   We accept most taxpayers' returns as filed. Amend 2012 tax return online If we inquire about your return or select it for examination, it does not suggest that you are dishonest. Amend 2012 tax return online The inquiry or examination may or may not result in more tax. Amend 2012 tax return online We may close your case without change; or, you may receive a refund. Amend 2012 tax return online   The process of selecting a return for examination usually begins in one of two ways. Amend 2012 tax return online First, we use computer programs to identify returns that may have incorrect amounts. Amend 2012 tax return online These programs may be based on information returns, such as Forms 1099 and W-2, on studies of past examinations, or on certain issues identified by compliance projects. Amend 2012 tax return online Second, we use information from outside sources that indicates that a return may have incorrect amounts. Amend 2012 tax return online These sources may include newspapers, public records, and individuals. Amend 2012 tax return online If we determine that the information is accurate and reliable, we may use it to select a return for examination. Amend 2012 tax return online   Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, explains the rules and procedures that we follow in examinations. Amend 2012 tax return online The following sections give an overview of how we conduct examinations. Amend 2012 tax return online By mail. Amend 2012 tax return online   We handle many examinations and inquiries by mail. Amend 2012 tax return online We will send you a letter with either a request for more information or a reason why we believe a change to your return may be needed. Amend 2012 tax return online You can respond by mail or you can request a personal interview with an examiner. Amend 2012 tax return online If you mail us the requested information or provide an explanation, we may or may not agree with you, and we will explain the reasons for any changes. Amend 2012 tax return online Please do not hesitate to write to us about anything you do not understand. Amend 2012 tax return online By interview. Amend 2012 tax return online   If we notify you that we will conduct your examination through a personal interview, or you request such an interview, you have the right to ask that the examination take place at a reasonable time and place that is convenient for both you and the IRS. Amend 2012 tax return online If our examiner proposes any changes to your return, he or she will explain the reasons for the changes. Amend 2012 tax return online If you do not agree with these changes, you can meet with the examiner's supervisor. Amend 2012 tax return online Repeat examinations. Amend 2012 tax return online   If we examined your return for the same items in either of the 2 previous years and proposed no change to your tax liability, please contact us as soon as possible so we can see if we should discontinue the examination. Amend 2012 tax return online Appeals. Amend 2012 tax return online   If you do not agree with the examiner's proposed changes, you can appeal them to the Appeals Office of the IRS. Amend 2012 tax return online Most differences can be settled without expensive and time-consuming court trials. Amend 2012 tax return online Your appeal rights are explained in detail in both Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, and Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. Amend 2012 tax return online   If you do not wish to use the Appeals Office or disagree with its findings, you may be able to take your case to the U. Amend 2012 tax return online S. Amend 2012 tax return online Tax Court, U. Amend 2012 tax return online S. Amend 2012 tax return online Court of Federal Claims, or the U. Amend 2012 tax return online S. Amend 2012 tax return online District Court where you live. Amend 2012 tax return online If you take your case to court, the IRS will have the burden of proving certain facts if you kept adequate records to show your tax liability, cooperated with the IRS, and meet certain other conditions. Amend 2012 tax return online If the court agrees with you on most issues in your case and finds that our position was largely unjustified, you may be able to recover some of your administrative and litigation costs. Amend 2012 tax return online You will not be eligible to recover these costs unless you tried to resolve your case administratively, including going through the appeals system, and you gave us the information necessary to resolve the case. Amend 2012 tax return online Collections. Amend 2012 tax return online   Publication 594, The IRS Collection Process, explains your rights and responsibilities regarding payment of federal taxes. Amend 2012 tax return online It describes: What to do when you owe taxes. Amend 2012 tax return online It describes what to do if you get a tax bill and what to do if you think your bill is wrong. Amend 2012 tax return online It also covers making installment payments, delaying collection action, and submitting an offer in compromise. Amend 2012 tax return online IRS collection actions. Amend 2012 tax return online It covers liens, releasing a lien, levies, releasing a levy, seizures and sales, and release of property. Amend 2012 tax return online   Your collection appeal rights are explained in detail in Publication 1660, Collection Appeal Rights. Amend 2012 tax return online Innocent spouse relief. Amend 2012 tax return online   Generally, both you and your spouse are responsible, jointly and individually, for paying the full amount of any tax, interest, or penalties due on your joint return. Amend 2012 tax return online To seek relief from any liability related to your spouse (or former spouse), you must file a claim on Form 8857, Request for Innocent Spouse Relief. Amend 2012 tax return online In some cases, Form 8857 may need to be filed within 2 years of the date on which the IRS first attempted to collect the tax from you. Amend 2012 tax return online Do not file Form 8857 with your Form 1040. Amend 2012 tax return online For more information, see Publication 971, Innocent Spouse Relief, and Form 8857 or you can call the Innocent Spouse office toll-free at 1-855-851-2009. Amend 2012 tax return online Refunds. Amend 2012 tax return online   You can file a claim for refund if you think you paid too much tax. Amend 2012 tax return online You must generally file the claim within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. Amend 2012 tax return online The law generally provides for interest on your refund if it is not paid within 45 days of the date you filed your return or claim for refund. Amend 2012 tax return online Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, has more information on refunds. Amend 2012 tax return online   If you were due a refund but you did not file a return, you must file within 3 years from the date the return was due (including extensions) to get that refund. Amend 2012 tax return online Prev  Up  Next   Home   More Online Publications
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The Amend 2012 Tax Return Online

Amend 2012 tax return online 3. Amend 2012 tax return online   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. Amend 2012 tax return online Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. Amend 2012 tax return online Certain contracts held by a charitable remainder trust. Amend 2012 tax return online Excise Taxes. Amend 2012 tax return online Indoor tanning services. Amend 2012 tax return online Application for Recognition of ExemptionPolitical activity. Amend 2012 tax return online Private delivery service. Amend 2012 tax return online Amendments to organizing documents required. Amend 2012 tax return online How to show reasonable action and good faith. Amend 2012 tax return online Not acting reasonably and in good faith. Amend 2012 tax return online Prejudicing the interest of the Government. Amend 2012 tax return online Procedure for requesting extension. Amend 2012 tax return online More information. Amend 2012 tax return online Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. Amend 2012 tax return online Grass roots expenditures. Amend 2012 tax return online Lobbying nontaxable amount. Amend 2012 tax return online Grass roots nontaxable amount. Amend 2012 tax return online Organization that no longer qualifies. Amend 2012 tax return online Tax on organization. Amend 2012 tax return online Tax on managers. Amend 2012 tax return online Taxes on organizations. Amend 2012 tax return online Taxes on managers. Amend 2012 tax return online Political expenditures. Amend 2012 tax return online Correction of expenditure. Amend 2012 tax return online Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. Amend 2012 tax return online Religious. Amend 2012 tax return online Charitable. Amend 2012 tax return online Scientific. Amend 2012 tax return online Testing for public safety. Amend 2012 tax return online Literary. Amend 2012 tax return online Educational. Amend 2012 tax return online Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). Amend 2012 tax return online The prevention of cruelty to children or animals. Amend 2012 tax return online To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. Amend 2012 tax return online A trust is a fund or foundation and will qualify. Amend 2012 tax return online However, an individual or a partnership will not qualify. Amend 2012 tax return online Examples. Amend 2012 tax return online   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. Amend 2012 tax return online Child care organizations. Amend 2012 tax return online   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. Amend 2012 tax return online Instrumentalities. Amend 2012 tax return online   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). Amend 2012 tax return online Examples of a qualifying instrumentality might include state schools, universities, or hospitals. Amend 2012 tax return online However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. Amend 2012 tax return online A state or municipality itself does not qualify for exemption. Amend 2012 tax return online Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. Amend 2012 tax return online Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. Amend 2012 tax return online Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. Amend 2012 tax return online Fundraising events. Amend 2012 tax return online   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. Amend 2012 tax return online This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. Amend 2012 tax return online   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. Amend 2012 tax return online If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. Amend 2012 tax return online You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. Amend 2012 tax return online See Disclosure of Quid Pro Quo Contributions in chapter 2. Amend 2012 tax return online Exemption application not filed. Amend 2012 tax return online   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. Amend 2012 tax return online Separate fund—contributions that are deductible. Amend 2012 tax return online   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. Amend 2012 tax return online   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. Amend 2012 tax return online A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. Amend 2012 tax return online Personal benefit contracts. Amend 2012 tax return online   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. Amend 2012 tax return online   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. Amend 2012 tax return online Certain annuity contracts. Amend 2012 tax return online   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). Amend 2012 tax return online Certain contracts held by a charitable remainder trust. Amend 2012 tax return online   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. Amend 2012 tax return online Excise tax. Amend 2012 tax return online   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. Amend 2012 tax return online The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. Amend 2012 tax return online Excise Taxes. Amend 2012 tax return online   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. Amend 2012 tax return online Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. Amend 2012 tax return online Indoor tanning services. Amend 2012 tax return online   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. Amend 2012 tax return online For more information, go to IRS. Amend 2012 tax return online gov and select Affordable Care Act Tax Provisions. Amend 2012 tax return online Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. Amend 2012 tax return online For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. Amend 2012 tax return online See the organization headings that follow for specific information your organization may need to provide. Amend 2012 tax return online Form 1023. Amend 2012 tax return online   Your organization must file its application for recognition of exemption on Form 1023. Amend 2012 tax return online See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. Amend 2012 tax return online Some organizations are not required to file Form 1023. Amend 2012 tax return online See Organizations Not Required To File Form 1023, later. Amend 2012 tax return online    Additional information to help you complete your application can be found online. Amend 2012 tax return online Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. Amend 2012 tax return online See Exemption Requirements - Section 501(c)(3) Organizations. Amend 2012 tax return online   Form 1023 and accompanying statements must show that all of the following are true. Amend 2012 tax return online The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. Amend 2012 tax return online ) specified in the introduction to this chapter. Amend 2012 tax return online No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. Amend 2012 tax return online You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. Amend 2012 tax return online The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. Amend 2012 tax return online See Political activity, next, and Lobbying Expenditures , near the end of this chapter. Amend 2012 tax return online Political activity. Amend 2012 tax return online   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). Amend 2012 tax return online Such participation or intervention includes the publishing or distributing of statements. Amend 2012 tax return online   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Amend 2012 tax return online Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. Amend 2012 tax return online Effective date of exemption. Amend 2012 tax return online   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. Amend 2012 tax return online These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. Amend 2012 tax return online If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. Amend 2012 tax return online Otherwise, exemption will be recognized only from the date of receipt. Amend 2012 tax return online The date of receipt is the date of the U. Amend 2012 tax return online S. Amend 2012 tax return online postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. Amend 2012 tax return online Private delivery service. Amend 2012 tax return online   If a private delivery service designated by the IRS, rather than the U. Amend 2012 tax return online S. Amend 2012 tax return online Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. Amend 2012 tax return online The following private delivery services have been designated by the IRS. Amend 2012 tax return online DHL Express (DHL): DHL “Same Day” Service. Amend 2012 tax return online Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Amend 2012 tax return online United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Amend 2012 tax return online M. Amend 2012 tax return online , UPS Worldwide Express Plus, and UPS Worldwide Express. Amend 2012 tax return online Amendments to organizing documents required. Amend 2012 tax return online   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. Amend 2012 tax return online If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. Amend 2012 tax return online Extensions of time for filing. Amend 2012 tax return online   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. Amend 2012 tax return online Automatic 12-month extension. Amend 2012 tax return online Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. Amend 2012 tax return online To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. Amend 2012 tax return online 9100-2. Amend 2012 tax return online ” Discretionary extensions. Amend 2012 tax return online An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. Amend 2012 tax return online How to show reasonable action and good faith. Amend 2012 tax return online   An organization acted reasonably and showed good faith if at least one of the following is true. Amend 2012 tax return online The organization requests relief before its failure to file is discovered by the IRS. Amend 2012 tax return online The organization failed to file because of intervening events beyond its control. Amend 2012 tax return online The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. Amend 2012 tax return online The organization reasonably relied upon the written advice of the IRS. Amend 2012 tax return online The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. Amend 2012 tax return online An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. Amend 2012 tax return online Not acting reasonably and in good faith. Amend 2012 tax return online   An organization has not acted reasonably and in good faith under the following circumstances. Amend 2012 tax return online It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. Amend 2012 tax return online It was informed of the requirement to file and related tax consequences, but chose not to file. Amend 2012 tax return online It uses hindsight in requesting relief. Amend 2012 tax return online The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. Amend 2012 tax return online Prejudicing the interest of the Government. Amend 2012 tax return online   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. Amend 2012 tax return online Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. Amend 2012 tax return online The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. Amend 2012 tax return online The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. Amend 2012 tax return online Procedure for requesting extension. Amend 2012 tax return online   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. Amend 2012 tax return online A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. Amend 2012 tax return online Any documents relevant to the application. Amend 2012 tax return online An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. Amend 2012 tax return online If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. Amend 2012 tax return online This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Amend 2012 tax return online ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. Amend 2012 tax return online This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. Amend 2012 tax return online The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. Amend 2012 tax return online These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Amend 2012 tax return online ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. Amend 2012 tax return online The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. Amend 2012 tax return online The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. Amend 2012 tax return online   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. Amend 2012 tax return online Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. Amend 2012 tax return online More information. Amend 2012 tax return online   For more information about these procedures, see Regulations sections 301. Amend 2012 tax return online 9100-1, 301. Amend 2012 tax return online 9100-2, 301. Amend 2012 tax return online 9100-3, Revenue Procedure 2013-4, section 6. Amend 2012 tax return online 04, 2013-1 I. Amend 2012 tax return online R. Amend 2012 tax return online B. Amend 2012 tax return online 126, and Revenue Procedure 2013-8, 2013-1 I. Amend 2012 tax return online R. Amend 2012 tax return online B. Amend 2012 tax return online 237. Amend 2012 tax return online See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. Amend 2012 tax return online Notification from the IRS. Amend 2012 tax return online   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. Amend 2012 tax return online Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. Amend 2012 tax return online These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. Amend 2012 tax return online Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). Amend 2012 tax return online These organizations are exempt automatically if they meet the requirements of section 501(c)(3). Amend 2012 tax return online Filing Form 1023 to establish exemption. Amend 2012 tax return online   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. Amend 2012 tax return online By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. Amend 2012 tax return online A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. Amend 2012 tax return online Private foundations. Amend 2012 tax return online   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. Amend 2012 tax return online Gross receipts test. Amend 2012 tax return online   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. Amend 2012 tax return online   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. Amend 2012 tax return online For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. Amend 2012 tax return online The organization must file Form 1023 within 90 days after the end of its second tax year. Amend 2012 tax return online   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. Amend 2012 tax return online However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. Amend 2012 tax return online Example. Amend 2012 tax return online   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. Amend 2012 tax return online It was incorporated on January 1, 2009, and files returns on a calendar-year basis. Amend 2012 tax return online It did not file a Form 1023. Amend 2012 tax return online The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. Amend 2012 tax return online Therefore, it did not have to file Form 1023 and is exempt for those years. Amend 2012 tax return online However, for 2010, 2011, and 2012 the total gross receipts were $15,900. Amend 2012 tax return online Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. Amend 2012 tax return online If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. Amend 2012 tax return online The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. Amend 2012 tax return online   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. Amend 2012 tax return online See the procedures for this extension discussed earlier. Amend 2012 tax return online Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. Amend 2012 tax return online This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. Amend 2012 tax return online Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. Amend 2012 tax return online These conditions for exemption are referred to as the organizational test. Amend 2012 tax return online Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. Amend 2012 tax return online Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). Amend 2012 tax return online The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. Amend 2012 tax return online Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. Amend 2012 tax return online Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. Amend 2012 tax return online In interpreting an organization's articles, the law of the state where the organization was created is controlling. Amend 2012 tax return online If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. Amend 2012 tax return online The following are examples illustrating the organizational test. Amend 2012 tax return online Example 1. Amend 2012 tax return online Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). Amend 2012 tax return online These articles appropriately limit the organization's purposes. Amend 2012 tax return online The organization meets the organizational test. Amend 2012 tax return online Example 2. Amend 2012 tax return online An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. Amend 2012 tax return online The organization will not be properly limited as to its purposes since all research is not scientific. Amend 2012 tax return online The organization does not meet the organizational test. Amend 2012 tax return online Example 3. Amend 2012 tax return online An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). Amend 2012 tax return online The organization meets the organizational test. Amend 2012 tax return online Example 4. Amend 2012 tax return online If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. Amend 2012 tax return online Example 5. Amend 2012 tax return online If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. Amend 2012 tax return online On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. Amend 2012 tax return online Example 6. Amend 2012 tax return online If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. Amend 2012 tax return online Such purposes are vague and may be accomplished other than in an exempt manner. Amend 2012 tax return online Example 7. Amend 2012 tax return online A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. Amend 2012 tax return online A hospital may or may not be exempt depending on the manner in which it is operated. Amend 2012 tax return online Example 8. Amend 2012 tax return online An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. Amend 2012 tax return online Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. Amend 2012 tax return online This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. Amend 2012 tax return online If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. Amend 2012 tax return online Dedication. Amend 2012 tax return online   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. Amend 2012 tax return online Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. Amend 2012 tax return online Distribution. Amend 2012 tax return online   Revenue Procedure 82-2, 1982-1 C. Amend 2012 tax return online B. Amend 2012 tax return online 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. Amend 2012 tax return online The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. Amend 2012 tax return online   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. Amend 2012 tax return online Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. Amend 2012 tax return online Sample articles of organization. Amend 2012 tax return online   See sample articles of organization in the Appendix in the back of this publication. Amend 2012 tax return online Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. Amend 2012 tax return online In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. Amend 2012 tax return online You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. Amend 2012 tax return online If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. Amend 2012 tax return online See also Private Schools , discussed later. Amend 2012 tax return online Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. Amend 2012 tax return online Advocacy of a position. Amend 2012 tax return online   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. Amend 2012 tax return online The mere presentation of unsupported opinion is not educational. Amend 2012 tax return online Method not educational. Amend 2012 tax return online   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). Amend 2012 tax return online The following factors may indicate that the method is not educational. Amend 2012 tax return online The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. Amend 2012 tax return online The facts that purport to support the viewpoint are distorted. Amend 2012 tax return online The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. Amend 2012 tax return online The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. Amend 2012 tax return online   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. Amend 2012 tax return online Qualifying organizations. Amend 2012 tax return online   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. Amend 2012 tax return online College book stores, cafeterias, restaurants, etc. Amend 2012 tax return online   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. Amend 2012 tax return online Alumni association. Amend 2012 tax return online   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. Amend 2012 tax return online If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . Amend 2012 tax return online Athletic organization. Amend 2012 tax return online   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. Amend 2012 tax return online If it is not so engaged, your organization may be exempt as a social club described in chapter 4. Amend 2012 tax return online Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. Amend 2012 tax return online If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. Amend 2012 tax return online Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. Amend 2012 tax return online The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. Amend 2012 tax return online (This information also must be projected, so far as may be feasible, for the next academic year. Amend 2012 tax return online ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. Amend 2012 tax return online A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. Amend 2012 tax return online A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. Amend 2012 tax return online The public school district and county in which the school is located. Amend 2012 tax return online How to determine racial composition. Amend 2012 tax return online   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. Amend 2012 tax return online Nevertheless, a statement of the method by which the racial composition was determined must be supplied. Amend 2012 tax return online The identity of individual students or members of the faculty and administrative staff should not be included with this information. Amend 2012 tax return online   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. Amend 2012 tax return online Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. Amend 2012 tax return online Also, the school must circulate information that clearly states the school's admission policies. Amend 2012 tax return online A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. Amend 2012 tax return online The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. Amend 2012 tax return online The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. Amend 2012 tax return online Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. Amend 2012 tax return online A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. Amend 2012 tax return online A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. Amend 2012 tax return online Policy statement. Amend 2012 tax return online   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. Amend 2012 tax return online Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. Amend 2012 tax return online Publicity requirement. Amend 2012 tax return online   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. Amend 2012 tax return online Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. Amend 2012 tax return online To satisfy this requirement, the school must use one of the following two methods. Amend 2012 tax return online Method one. Amend 2012 tax return online   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. Amend 2012 tax return online Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Amend 2012 tax return online When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. Amend 2012 tax return online If this method is used, the notice must meet the following printing requirements. Amend 2012 tax return online It must appear in a section of the newspaper likely to be read by prospective students and their families. Amend 2012 tax return online It must occupy at least 3 column inches. Amend 2012 tax return online It must have its title printed in at least 12 point bold face type. Amend 2012 tax return online It must have the remaining text printed in at least 8 point type. Amend 2012 tax return online The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. Amend 2012 tax return online It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. Amend 2012 tax return online   Method two. Amend 2012 tax return online   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. Amend 2012 tax return online If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. Amend 2012 tax return online In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. Amend 2012 tax return online The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. Amend 2012 tax return online Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Amend 2012 tax return online Exceptions. Amend 2012 tax return online   The publicity requirements will not apply in the following situations. Amend 2012 tax return online First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. Amend 2012 tax return online These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. Amend 2012 tax return online If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. Amend 2012 tax return online Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . Amend 2012 tax return online   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. Amend 2012 tax return online The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. Amend 2012 tax return online   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. Amend 2012 tax return online Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. Amend 2012 tax return online   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. Amend 2012 tax return online The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. Amend 2012 tax return online In this regard, it is each school's responsibility to determine whether either of the exceptions applies. Amend 2012 tax return online Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. Amend 2012 tax return online Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. Amend 2012 tax return online Facilities and programs. Amend 2012 tax return online   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. Amend 2012 tax return online Scholarship and loan programs. Amend 2012 tax return online   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. Amend 2012 tax return online This must be known throughout the general community being served by the school and should be referred to in its publicity. Amend 2012 tax return online Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. Amend 2012 tax return online Certification. Amend 2012 tax return online   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. Amend 2012 tax return online   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. Amend 2012 tax return online Recordkeeping requirements. Amend 2012 tax return online With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. Amend 2012 tax return online Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. Amend 2012 tax return online Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. Amend 2012 tax return online Copies of all materials used by or on behalf of the school to solicit contributions. Amend 2012 tax return online Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. Amend 2012 tax return online (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. Amend 2012 tax return online ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. Amend 2012 tax return online However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. Amend 2012 tax return online The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. Amend 2012 tax return online Similarly, the IRS does not require a school to keep records prohibited under state or federal law. Amend 2012 tax return online Exceptions. Amend 2012 tax return online   The school does not have to independently maintain these records for IRS use if both of the following are true. Amend 2012 tax return online Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. Amend 2012 tax return online The school maintains copies of these reports from which this information is readily obtainable. Amend 2012 tax return online If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. Amend 2012 tax return online Failure to maintain records. Amend 2012 tax return online   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. Amend 2012 tax return online Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. Amend 2012 tax return online However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. Amend 2012 tax return online Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). Amend 2012 tax return online Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. Amend 2012 tax return online Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. Amend 2012 tax return online Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. Amend 2012 tax return online The rest of this section contains a description of the information to be provided by certain specific organizations. Amend 2012 tax return online This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. Amend 2012 tax return online Each of the following organizations must submit the information described. Amend 2012 tax return online Charitable organization supporting education. Amend 2012 tax return online   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. Amend 2012 tax return online Scholarships. Amend 2012 tax return online   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. Amend 2012 tax return online Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. Amend 2012 tax return online How and by whom the recipients are or will be selected. Amend 2012 tax return online If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. Amend 2012 tax return online If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. Amend 2012 tax return online A copy of the scholarship application form and any brochures or literature describing the scholarship program. Amend 2012 tax return online Hospital. Amend 2012 tax return online   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. Amend 2012 tax return online   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. Amend 2012 tax return online You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. Amend 2012 tax return online Submit also an appraisal showing the fair rental value of the rented space. Amend 2012 tax return online Clinic. Amend 2012 tax return online   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. Amend 2012 tax return online Home for the aged. Amend 2012 tax return online   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. Amend 2012 tax return online Community nursing bureau. Amend 2012 tax return online   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. Amend 2012 tax return online Organization providing loans. Amend 2012 tax return online   If you make, or will make, loans for charitable and educational purposes, submit the following information. Amend 2012 tax return online An explanation of the circumstances under which such loans are, or will be, made. Amend 2012 tax return online Criteria for selection, including the rules of eligibility. Amend 2012 tax return online How and by whom the recipients are or will be selected. Amend 2012 tax return online Manner of repayment of the loan. Amend 2012 tax return online Security required, if any. Amend 2012 tax return online Interest charged, if any, and when payable. Amend 2012 tax return online Copies in duplicate of the loan application and any brochures or literature describing the loan program. Amend 2012 tax return online Public-interest law firms. Amend 2012 tax return online   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. Amend 2012 tax return online How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. Amend 2012 tax return online Whether the organization will accept fees for its services. Amend 2012 tax return online A description of the cases litigated or to be litigated and how they benefit the public generally. Amend 2012 tax return online Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. Amend 2012 tax return online Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. Amend 2012 tax return online Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. Amend 2012 tax return online Acceptance of attorneys' fees. Amend 2012 tax return online   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. Amend 2012 tax return online Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. Amend 2012 tax return online   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. Amend 2012 tax return online All fee awards must be paid to the organization and not to its individual staff attorneys. Amend 2012 tax return online Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. Amend 2012 tax return online Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. Amend 2012 tax return online   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. Amend 2012 tax return online   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. Amend 2012 tax return online Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. Amend 2012 tax return online That the particular religious beliefs of the organization are truly and sincerely held. Amend 2012 tax return online That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. Amend 2012 tax return online Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. Amend 2012 tax return online If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. Amend 2012 tax return online Churches. Amend 2012 tax return online   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. Amend 2012 tax return online In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. Amend 2012 tax return online   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. Amend 2012 tax return online Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. Amend 2012 tax return online The IRS considers the facts and circumstances of each organization applying for church status. Amend 2012 tax return online Convention or association of churches. Amend 2012 tax return online   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. Amend 2012 tax return online Integrated auxiliaries. Amend 2012 tax return online   An organization is an integrated auxiliary of a church if all the following are true. Amend 2012 tax return online The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). Amend 2012 tax return online It is affiliated with a church or a convention or association of churches. Amend 2012 tax return online It is internally supported. Amend 2012 tax return online An organization is internally supported unless both of the following are true. Amend 2012 tax return online It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). Amend 2012 tax return online It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. Amend 2012 tax return online Special rule. Amend 2012 tax return online   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. Amend 2012 tax return online   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. Amend 2012 tax return online   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. Amend 2012 tax return online Scientific Organizations You must show that your organization's research will be carried on in the public interest. Amend 2012 tax return online Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. Amend 2012 tax return online Aiding in the scientific education of college or university students. Amend 2012 tax return online Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th