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Back tax Index A Adjusted basis for installment sale, Adjusted basis for installment sale purposes. Back tax Assistance (see Tax help) B Basis Adjusted, Adjusted basis. Back tax Assumed mortgage, Buyer Assumes Mortgage Installment obligation, Basis. Back tax , Basis in installment obligation. Back tax , Basis in installment obligation. Back tax Installment sale, Adjusted basis for installment sale purposes. Back tax Repossessed property, Basis in repossessed property. Back tax , Basis. Back tax Bond, Bond. Back tax Buyer's note, Buyer's note. Back tax C Contingent payment sale, Contingent Payment Sale Contract price, Contract price. Back tax D Dealer sales, special rule, Dealer sales. Back tax Depreciation recapture income, Depreciation Recapture Income Disposition of installment obligation, Disposition of an Installment Obligation E Electing out, Electing Out of the Installment Method Escrow account, Escrow Account F Fair market value, Fair market value (FMV). Back tax , Fair market value (FMV). Back tax Figuring installment sale income, Figuring Installment Sale Income Form 4797, Form 4797, Form 4797. Back tax 6252, Form 6252, Reporting an Installment Sale 8594, Reporting requirement. Back tax Schedule D (Form 1040), Schedule D (Form 1040), Other forms. Back tax , Schedule D (Form 1040). Back tax Free tax services, Free help with your tax return. Back tax G Gross profit percentage, Gross profit percentage. Back tax Gross profit, defined, Gross profit. Back tax Guarantee, Debt not payable on demand. Back tax H Help (see Tax help) I Installment obligation Defined, Installment obligation. Back tax Disposition, Disposition of an Installment Obligation Used as security, Installment Obligation Used as Security (Pledge Rule) Installment Sale, What Is an Installment Sale? Interest Escrow account, Escrow Account Income, Interest Income Reporting, Seller-financed mortgage. Back tax Unstated, Installment income after 2013. Back tax Interest on deferred tax, Interest on Deferred Tax Exceptions, Exceptions. Back tax L Like-kind exchange, Like-Kind Exchange N Note Buyer's, Buyer's note. Back tax Third-party, Third-party note. Back tax O Original issue discount, Installment income after 2013. Back tax P Payments considered received, Payments Received or Considered Received Buyer assumes debts, Buyer Assumes Other Debts Buyer pays seller's expenses, Buyer Pays Seller's Expenses Mortgage assumed, Buyer Assumes Mortgage Pledge rule, Installment Obligation Used as Security (Pledge Rule) Payments received, Payments Received or Considered Received Pledge rule, Installment Obligation Used as Security (Pledge Rule) Publications (see Tax help) R Related person Land sale, Land transfers between related persons. Back tax Reporting sale to, Related person. Back tax Sale to, Sale to a Related Person Reporting installment sale, Reporting Installment Sale Income, Reporting an Installment Sale Repossession, Repossession Holding period for resale, Holding period for resales. Back tax Personal property, Personal Property Real property, Real Property S Sale at a loss, Sale at a loss. Back tax Sale of Business, Sale of a Business Home, Sale of Your Home Land between related persons, Land transfers between related persons. Back tax Partnership interest, Sale of Partnership Interest Several assets, Single Sale of Several Assets, Several assets. Back tax Stock or securities, Stock or securities. Back tax Sales by dealers, Dealer sales. Back tax Section 1274, Section 1274 Exceptions, Exceptions to Sections 1274 and 483 Section 483, Section 483 Exceptions, Exceptions to Sections 1274 and 483 Selling expenses, Selling expenses. Back tax Selling price Defined, Selling price. Back tax Reduced, Selling Price Reduced Single sale of several assets, Single Sale of Several Assets, Several assets. Back tax T Tax help, How To Get Tax Help Third-party note, Third-party note. Back tax TTY/TDD information, How To Get Tax Help U Unstated interest, Installment income after 2013. Back tax Prev Up Home More Online Publications
Credits & Deductions for Individuals
EITC Home Page--It’s easier than ever to find out if you qualify for EITC
If you worked but earned less than $51,567 during 2013, you may qualify for EITC. The Earned Income Tax Credit, sometimes called EIC is a tax credit to help you keep more of what you earned. You must file a return and claim the credit to receive it. Find out more about EITC and links to helpful tools and resources.
The Health Coverage Tax Credit (HCTC) Program
The Health Coverage Tax Credit helps make health insurance more affordable for eligible individuals and their families by paying 72.5% of health insurance premiums. Find out if you're eligible for this tax credit, and how you can receive it.
Taxpayers who adopt an eligible child may qualify for the adoption tax credit.
Deducting Business Expenses
Find out what qualifies as a deductible business expense, including depreciation.
Page Last Reviewed or Updated: 05-Mar-2014
The Back Tax
Back tax 2. Back tax 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. Back tax Employment Tax ReturnsException. Back tax FUTA tax exception. Back tax FICA tax exemption election. Back tax Revoking the election. Back tax Definitions. Back tax Effect on employees. Back tax Political Organization Income Tax ReturnExempt function. Back tax Political organization taxable income. Back tax Separate fund. Back tax Failure to file. Back tax Failure to pay on time. Back tax Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. Back tax Publicly traded securities. Back tax Exceptions. Back tax Form 8283. Back tax 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. Back tax 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. Back tax S. Back tax 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. Back tax 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. Back tax S. Back tax 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. Back tax B. Back tax 418, www. Back tax irs. Back tax gov/pub/irs-tege/rp1995-48. Back tax 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. Back tax S. Back tax possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. Back tax 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. Back tax 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. Back tax 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). Back tax 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. Back tax 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. Back tax Form 990-N is due by the 15th day of the fifth month after the close of the tax year. Back tax 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. Back tax To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. Back tax Exceptions. Back tax 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. Back tax 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. Back tax 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. Back tax The following political organizations are not required to file Form 990 or Form 990-EZ. Back tax A state or local committee of a political party. Back tax A political committee of a state or local candidate. Back tax A caucus or association of state or local officials. Back tax A political organization that is required to report as a political committee under the Federal Election Campaign Act. Back tax 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. Back tax Form 990-EZ. Back tax This is a shortened version of Form 990. Back tax It is designed for use by small exempt organizations and nonexempt charitable trusts. Back tax 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. Back tax Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. Back tax If your organization does not meet either of these conditions, you cannot file Form 990-EZ. Back tax Instead you must file Form 990. Back tax Group return. Back tax 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. Back tax This return is in addition to the central organization's separate annual return if it must file a return. Back tax It cannot be included in the group return. Back tax See the instructions for Form 990 for the conditions under which this procedure may be used. Back tax 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. Back tax Schedule A (Form 990 or 990-EZ). Back tax 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. Back tax Schedule B (Form 990, Form 990-EZ, or 990-PF). Back tax Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. Back tax Schedule O (Form 990). Back tax Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. Back tax Other schedules may be required to be filed with Form 990 or 990-EZ. Back tax See the instructions for Form 990 or the instructions for Form 990-EZ for more information. Back tax Report significant new or changed program services and changes to organizational documents. Back tax 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. Back tax 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. Back tax See Miscellaneous Rules, Organization Changes and Exempt Status, later. Back tax Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. Back tax These organizations are discussed in chapter 3. Back tax Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. Back tax If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. Back tax See Regulations section 301. Back tax 6033-4 for more information. Back tax The IRS may waive the requirement to file electronically in cases of undue hardship. Back tax For information on filing a waiver, see Notice 2010-13, 2010-4 I. Back tax R. Back tax B. Back tax 327, available at www. Back tax irs. Back tax gov/ir/2010-04_IRSB/ar14. Back tax html. Back tax Form 990. Back tax 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. Back tax Form 990-PF. Back tax An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. Back tax 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. Back tax Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. Back tax Extension of time to file. Back tax 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. Back tax Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. Back tax For more information, see Form 8868 and its instructions. Back tax When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. Back tax However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. Back tax Application for exemption pending. Back tax 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. Back tax 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. Back tax For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. Back tax State reporting requirements. Back tax Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. Back tax See the instructions for those forms. Back tax Form 8870. Back tax 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. Back tax For more information, see Form 8870 and the instructions for that form. Back tax 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. Back tax The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. Back tax gov. Back tax This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. Back tax The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. Back tax It also includes the effective date of the automatic revocation and the date it was posted to the list. Back tax The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. Back tax 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. Back tax S. Back tax 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. Back tax S. Back tax 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. Back tax 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). Back tax 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). Back tax In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. Back tax For more information about automatic revocation, go to IRS. Back tax gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. Back tax Penalties Penalties for failure to file. Back tax 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. Back tax 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. Back tax Maximum penalty. Back tax The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. Back tax Organization with gross receipts over $1 million. Back tax 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. Back tax Managers. Back tax 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. Back tax 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. Back tax The penalty is $10 a day for each day that a return is not filed after the period given for filing. Back tax The maximum penalty imposed on all persons with respect to any one return is $5,000. Back tax Exception for reasonable cause. Back tax No penalty will be imposed if reasonable cause for failure to file timely can be shown. Back tax 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. Back tax 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. Back tax 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. Back tax Estimated tax. Back tax Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. Back tax Use Form 990-W to figure your organization's estimated tax payments. Back tax Travel tour programs. Back tax 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. Back tax 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. Back tax Example. Back tax ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). Back tax As part of its activities, ABC operates a travel tour program. Back tax The program is open to all current members of ABC and their guests. Back tax ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. Back tax Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. Back tax XYZ pays ABC a per person fee for each participant. Back tax 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. Back tax The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. Back tax Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. Back tax Therefore, ABC's tour program is an unrelated trade or business. Back tax For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. Back tax 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. Back tax 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. Back tax Small Business Health Care Tax Credit. Back tax If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. Back tax Go to IRS. Back tax gov and select Affordable Care Act Tax Provisions for more details. Back tax See Small Business Health Care Tax Credit at www. Back tax irs. Back tax gov/newsroom/article/0,,id=223666,00. Back tax html. Back tax Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. Back tax The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). Back tax 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. Back tax The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. Back tax This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. Back tax The credit can be as high as $6,240 for qualified tax-exempt organizations. Back tax 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. Back tax 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. Back tax All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. Back tax The process for certifying veterans for this credit is the same for all employers. Back tax For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. Back tax Notice 2012-13, 2012-9 I. Back tax R. Back tax B. Back tax 421, also provides additional guidance on submission Form 8850. Back tax 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. Back tax 22, 2011, and before January 1, 2013. Back tax 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. Back tax File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. Back tax 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. Back tax 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. Back tax Trust fund recovery penalty. Back tax 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. Back tax The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. Back tax The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. Back tax Exception. Back tax 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. Back tax This exception does not apply if it results in no one being liable for the penalty. Back tax FICA and FUTA tax exceptions. Back tax 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. Back tax FUTA tax exception. Back tax 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. Back tax FICA tax exemption election. Back tax Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. Back tax 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. Back tax The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. Back tax The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. Back tax Revoking the election. Back tax 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. Back tax Such revocation will apply retroactively to the beginning of the 2-year period. Back tax Definitions. Back tax 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. Back tax 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. Back tax Effect on employees. Back tax 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. Back tax However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. Back tax The tax applies to income of $108. Back tax 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. Back tax Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. Back tax Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. Back tax Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. Back tax S. Back tax 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. Back tax 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. Back tax See Forms 990 and 990-EZ , earlier. Back tax Political organization. Back tax 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. Back tax Exempt function. Back tax 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. Back tax It also includes certain office expenses of a holder of public office or an office in a political organization. Back tax Certain political organizations are required to notify the IRS that they are section 527 organizations. Back tax These organizations must use Form 8871. Back tax Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. Back tax For a discussion on these forms, see Reporting Requirements for a Political Organization, later. Back tax Political organization taxable income. Back tax 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. Back tax 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. Back tax Exempt organization not a political organization. Back tax 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. Back tax 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. Back tax Separate fund. Back tax A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. Back tax The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. Back tax 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. Back tax Due date. Back tax Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. Back tax Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. Back tax If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. Back tax 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. Back tax Extension of time to file. Back tax Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. Back tax 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. Back tax Failure to file. Back tax 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. Back tax For more information about filing Form 1120-POL, refer to the instructions accompanying the form. Back tax Failure to pay on time. Back tax 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. Back tax The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. Back tax 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. Back tax The organization is also required to periodically report certain contributions received and expenditures made by the organization. Back tax To notify the IRS of section 527 treatment, an organization must file Form 8871. Back tax To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. Back tax 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. Back tax 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. Back tax It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. Back tax S. Back tax C. Back tax 431(4)). Back tax It is a state or local candidate committee. Back tax It is a state or local committee of a political party. Back tax It is a section 501(c) organization that has made an “exempt function expenditure. Back tax ” All other political organizations are required to file Form 8871. Back tax 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. Back tax Employer identification number. Back tax If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. Back tax IRS. Back tax gov/businesses/small. Back tax By telephone at 1-800-829-4933 from 7:00 a. Back tax m. Back tax to 10:00 p. Back tax m. Back tax in the organization's local time zone. Back tax By mailing or faxing Form SS-4. Back tax 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. Back tax Due dates. Back tax The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. Back tax If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. Back tax When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. Back tax If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. Back tax How to file. Back tax An organization must file Form 8871 electronically via the IRS Internet website at www. Back tax IRS. Back tax gov/polorgs (Keyword: political orgs). Back tax Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. Back tax After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. Back tax 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. Back tax Penalties Failure to file. Back tax 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. Back tax 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. Back tax Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. Back tax 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. Back tax The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. Back tax Fraudulent returns. Back tax 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. Back tax Waiver of penalties. Back tax 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. Back tax Additional information. Back tax For more information on Form 8871, see the form and its instructions. Back tax 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. Back tax 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). Back tax A political organization that is subject to tax on its income because it did not file or amend Form 8871. Back tax A qualified state or local political organization (QSLPO), discussed below. Back tax All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. Back tax Qualified state or local political organization. Back tax 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). Back tax 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. Back tax The state agency and the organization make the reports publicly available. Back tax 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. Back tax Information required on Form 8872. Back tax 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. Back tax 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. Back tax For additional information that is required, see Form 8872. Back tax Due dates. Back tax 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). Back tax If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. Back tax Election year filing. Back tax In election years, Form 8872 must be filed on either a quarterly or a monthly basis. Back tax Both a pre-election report and a post-election report are also required to be filed in an election year. Back tax An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). Back tax Nonelection year filing. Back tax In nonelection years, the form must be filed on a semiannual or monthly basis. Back tax A complete listing of these filing periods are in the Form 8872 Instructions. Back tax A nonelection year is any odd-numbered year. Back tax How to file. Back tax Form 8872 can be filed either electronically or by mail. Back tax However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. Back tax To file by mail, send Form 8872 to the: Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. Back tax File electronically via the IRS internet website at www. Back tax IRS. Back tax gov/polorgs. Back tax You will need a user ID and password to electronically file Form 8872. Back tax 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. Back tax 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. Back tax 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. Back tax You can also fax your request to (801) 620-3249. Back tax It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. Back tax 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. Back tax The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. Back tax Fraudulent returns. Back tax 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. Back tax Waiver of penalties. Back tax 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. Back tax Donee Information Return Dispositions of donated property. Back tax 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. Back tax 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. Back tax Form 8282 must be filed with the IRS within 125 days after the disposition. Back tax Additionally, a copy of Form 8282 must be given to the donor. Back tax If the organization fails to file the required information return, penalties may apply. Back tax Charitable deduction property. Back tax 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. Back tax Publicly traded securities. Back tax These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. Back tax Appraisal summary. Back tax If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. Back tax below. Back tax Exceptions. Back tax 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. Back tax 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. Back tax The donee organization is not a qualified appraiser for the purpose of valuing the donated property. Back tax For more information, get Publication 561, Determining the Value of Donated Property. Back tax Form 8283. Back tax For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. Back tax The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. Back tax 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. Back tax The signature does not represent concurrence in the appraised value of the contributed property. Back tax A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. Back tax The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. Back tax A copy of Form 8283 must be given to the donee. Back tax 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. Back tax In other situations, the donee organization is required to provide information to the donor. Back tax A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. Back tax (See Disclosure statement. Back tax later. Back tax ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. Back tax See Quid pro quo contribution below for an example. Back tax Failure to make the required disclosure may result in a penalty to the organization. Back tax A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. Back tax In certain circumstances, an organization may be able to meet both of these requirements with the same written document. Back tax 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. Back tax Quid pro quo contribution. Back tax A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. Back tax 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. Back tax Generally, a written statement is required for each payment, whenever the contribution portion is over $75. Back tax Example. Back tax If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. Back tax In this example, the charitable part of the payment is $60. Back tax 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. Back tax If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. Back tax Disclosure statement. Back tax 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. Back tax The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. Back tax 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. Back tax No disclosure statement is required if any of the following are true. Back tax The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. Back tax B. Back tax 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. Back tax B. Back tax 507 (as adjusted for inflation), Revenue Procedure 92-49. Back tax 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). Back tax There is only an intangible religious benefit provided to the donor. Back tax 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. Back tax 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. Back tax 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. Back tax 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. Back tax Good faith estimate of fair market value (FMV). Back tax 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. Back tax 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. Back tax Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. Back tax Example 1. Back tax A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. Back tax The tennis professional provides 1-hour lessons on a commercial basis for $100. Back tax A good faith estimate of the lesson's FMV is $100. Back tax Example 2. Back tax For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. Back tax 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. Back tax 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. Back tax Example 3. Back tax For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. Back tax The artist does not provide tours on a commercial basis. Back tax Tours of the museum normally are free to the public. Back tax A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. Back tax Penalty for failure to disclose. Back tax A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. Back tax The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. Back tax The charity can avoid the penalty if it can show that the failure was due to reasonable cause. Back tax 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. Back tax 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. Back tax The donor is responsible for requesting and obtaining the written acknowledgment from the donee. Back tax 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. Back tax Quid pro quo contribution. Back tax 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. Back tax See Disclosure of Quid Pro Quo Contributions earlier. Back tax Form of acknowledgment. Back tax Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. Back tax For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. Back tax Cash contributions. Back tax 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. Back tax 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. Back tax Contributions by payroll deduction. Back tax 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. Back tax For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. Back tax The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. Back tax 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. Back tax The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. Back tax See section 3. Back tax 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. Back tax 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. Back tax 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. Back tax The organization must file the report on Copy A of Form 1098-C. Back tax An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. Back tax S. Back tax Information Returns. Back tax See the Instructions for Form 1096 for the correct filing location. Back tax An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. Back tax 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. Back tax IRS. Back tax gov/pub/irs-pdf/p1220. Back tax pdf. Back tax Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. Back tax However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. Back tax See the Instructions for Form 1098-C. Back tax Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. Back tax 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. Back tax For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. Back tax R. Back tax B. Back tax 1287, at www. Back tax irs. Back tax gov/irb/2005-25_IRB/2005-25_IRB/ar09. Back tax html. Back tax Material improvements or significant intervening use. Back tax 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. Back tax Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. Back tax 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. Back tax Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. Back tax 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. Back tax 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. Back tax Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. Back tax To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. Back tax 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. Back tax Penalties. Back tax 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. Back tax Other penalties may apply. Back tax See Part O in the 2012 General Instructions for Certain Information Returns. Back tax 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. Back tax 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. Back tax 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. Back tax 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. Back tax 6%. Back tax 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. Back tax 6%. Back tax 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. Back tax The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. Back tax 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. Back tax 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. Back tax Form 8899. Back tax 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. Back tax 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. Back tax Qualified donee income. Back tax 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. Back tax 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