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Tax Act 2011 Return

Amend 2010 Tax Return FreeAarp Tax HelpForm 1040ez More:label_form_201040ez More:taxesTax Planning Us 1040xHrblockAmended TaxTax AmendmentForm 1040ezCan I Efile My 2012 Taxes NowEz Form 2014Form 1040x InstructionsCan I Still File My 2010 TaxesFederal Amended Tax FormsFree Turbotax For StudentsIncome Tax Form 1040HrblockfreetaxIrs OrgTurbo TaxIrs Tax Form 1040ezHow To File An Amendment On My TaxesHow To File 1040nrUs Government Form 1040x2012 Form 1040xFiling Previous Year TaxesFree Tax Filing For Low Income2008 Federal Tax FormsIrs Forms 2010Irs GovIrs Tax Form 2010Free File For State Income TaxH&r Block BasicFree Tax FilingMilitary Tax CreditFree 2011 Taxes Online1040 Forms2012 Tax Amendment FormTurbo Tax Filing1040x FormE File Amended 1040xTax Planning Us 2005 Taxes

Tax Act 2011 Return

Tax act 2011 return 1. Tax act 2011 return   Filing Information Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Filing RequirementsWhen To File and Pay Foreign Currency Does My Return Have To Be On Paper? Where To File Nonresident Alien Spouse Treated as a ResidentSocial Security Number (SSN) How To Make the Choice Suspending the Choice Ending the Choice Estimated Tax Other Forms You May Have To File Topics - This chapter discusses: Whether you have to file a return, When to file your return and pay any tax due, How to treat foreign currency, How to file electronically, Where to file your return, When you can treat your nonresident alien spouse as a resident, and When you may have to make estimated tax payments. Tax act 2011 return Useful Items - You may want to see: Publication 3 Armed Forces' Tax Guide 501 Exemptions, Standard Deduction, and Filing Information 505 Tax Withholding and Estimated Tax 519 U. Tax act 2011 return S. Tax act 2011 return Tax Guide for Aliens 970 Tax Benefits for Education Form (and Instructions) 1040-ES Estimated Tax for Individuals 1040X Amended U. Tax act 2011 return S. Tax act 2011 return Individual Income Tax Return 2350 Application for Extension of Time To File U. Tax act 2011 return S. Tax act 2011 return Income Tax Return 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion 4868 Application for Automatic Extension of Time To File U. Tax act 2011 return S. Tax act 2011 return Individual Income Tax Return 8822 Change of Address See chapter 7 for information about getting these publications and forms. Tax act 2011 return Filing Requirements If you are a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad. Tax act 2011 return Your income, filing status, and age generally determine whether you must file an income tax return. Tax act 2011 return Generally, you must file a return for 2013 if your gross income from worldwide sources is at least the amount shown for your filing status in the following table. Tax act 2011 return Filing Status*   Amount Single $10,000 65 or older $11,500 Head of household $12,850 65 or older $14,350 Qualifying widow(er) $16,100 65 or older $17,300 Married filing jointly $20,000 Not living with spouse at end of year $3,900 One spouse 65 or older $21,200 Both spouses 65 or older $22,400 Married filing separately $3,900 *If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return. Tax act 2011 return Gross income. Tax act 2011 return   This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. Tax act 2011 return   For purposes of determining whether you must file a return, gross income includes any income that you can exclude as foreign earned income or as a foreign housing amount. Tax act 2011 return If you are self-employed, your gross income includes the amount on Part I, line 7 of Schedule C (Form 1040), Profit or Loss From Business, or line 1 of Schedule C-EZ (Form 1040), Net Profit From Business. Tax act 2011 return Self-employed individuals. Tax act 2011 return   If your net earnings from self-employment are $400 or more, you must file a return even if your gross income is below the amount listed for your filing status in the table shown earlier. Tax act 2011 return Net earnings from self-employment are defined in Publication 334, Tax Guide for Small Business. Tax act 2011 return 65 or older. Tax act 2011 return   You are considered to be age 65 on the day before your 65th birthday. Tax act 2011 return For example, if your 65th birthday is on January 1, 2014, you are considered 65 for 2013. Tax act 2011 return Residents of U. Tax act 2011 return S. Tax act 2011 return possessions. Tax act 2011 return   If you are (or were) a bona fide resident of a U. Tax act 2011 return S. Tax act 2011 return possession, you may be required to file Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U. Tax act 2011 return S. Tax act 2011 return Possession. Tax act 2011 return See the instructions for the form for more information. Tax act 2011 return When To File and Pay If you file on a calendar year basis, the due date for filing your return is April 15 of the following year. Tax act 2011 return If you file on a fiscal year basis (a year ending on the last day of any month except December), the due date is 3 months and 15 days after the close of your fiscal year. Tax act 2011 return In general, the tax shown on your return should be paid by the due date of the return, without regard to any extension of time for filing the return. Tax act 2011 return When the due date for doing any act for tax purposes—filing a return, paying taxes, etc. Tax act 2011 return — falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. Tax act 2011 return A tax return delivered by the U. Tax act 2011 return S. Tax act 2011 return mail or a designated delivery service that is postmarked or dated by the delivery service on or before the due date is considered to have been filed on or before that date. Tax act 2011 return See your Form 1040 or Form 1040A instructions for a list of designated delivery services. Tax act 2011 return Foreign wire transfers. Tax act 2011 return   If you have a U. Tax act 2011 return S. Tax act 2011 return bank account, you can use: EFTPS (Electronic Federal Tax Payment System), or Federal Tax Application (same-day wire transfer). Tax act 2011 return If you do not have a U. Tax act 2011 return S. Tax act 2011 return bank account, ask if your financial institution has a U. Tax act 2011 return S. Tax act 2011 return affiliate that can help you make same-day wire transfers. Tax act 2011 return   For more information, visit www. Tax act 2011 return eftps. Tax act 2011 return gov. Tax act 2011 return Extensions You can get an extension of time to file your return. Tax act 2011 return In some circumstances, you also can get an extension of time to file and pay any tax due. Tax act 2011 return However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. Tax act 2011 return This publication discusses four extensions: an automatic 2-month extension, an automatic 6-month extension, an additional extension for taxpayers out of the country, and an extension of time to meet tests. Tax act 2011 return If you served in a combat zone or qualified hazardous duty area, see Publication 3 for a discussion of extensions of deadlines. Tax act 2011 return Automatic 2-month extension. Tax act 2011 return   You are allowed an automatic 2-month extension to file your return and pay federal income tax if you are a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien, and on the regular due date of your return: You are living outside the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. Tax act 2011 return   If you use a calendar year, the regular due date of your return is April 15. Tax act 2011 return Even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return. Tax act 2011 return Married taxpayers. Tax act 2011 return   If you file a joint return, either you or your spouse can qualify for the automatic extension. Tax act 2011 return If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies for it. Tax act 2011 return How to get the extension. Tax act 2011 return   To use this automatic 2-month extension, you must attach a statement to your return explaining which of the two situations listed earlier qualified you for the extension. Tax act 2011 return Automatic 6-month extension. Tax act 2011 return   If you are not able to file your return by the due date, you generally can get an automatic 6-month extension of time to file (but not of time to pay). Tax act 2011 return To get this automatic extension, you must file a paper Form 4868 or use IRS e-file (electronic filing). Tax act 2011 return For more information about filing electronically, see E-file options , later. Tax act 2011 return   The form must show your properly estimated tax liability based on the information available to you. Tax act 2011 return    You may not be eligible. Tax act 2011 return You cannot use the automatic 6-month extension of time to file if: You want the IRS to figure your tax, or You are under a court order to file by the regular due date. Tax act 2011 return E-file options. Tax act 2011 return    You can use e-file to get an extension of time to file. Tax act 2011 return You can either file Form 4868 electronically or you can pay part or all of your estimate of tax due using a credit or debit card. Tax act 2011 return   First, complete Form 4868 to use as a worksheet. Tax act 2011 return If you think you may owe tax when you file your return, use Part II of the form to estimate your balance due. Tax act 2011 return    Then, do one of the following. Tax act 2011 return E-file Form 4868. Tax act 2011 return You can use a tax software package with your personal computer or a tax professional to file Form 4868 electronically. Tax act 2011 return You will need to provide certain information from your tax return for 2012. Tax act 2011 return If you wish to make a payment by electronic funds withdrawal, see the instructions for Form 4868. Tax act 2011 return If you e-file Form 4868, do not also send a paper Form 4868. Tax act 2011 return E-file and pay by credit or debit card. Tax act 2011 return You can get an extension by paying part or all of your estimate of tax due by using a credit or debit card. Tax act 2011 return You can do this by phone or over the Internet. Tax act 2011 return If you do this, you do not file Form 4868. Tax act 2011 return For more information, see the instructions for your tax return. Tax act 2011 return When to file. Tax act 2011 return   Generally, you must request the 6-month extension by the regular due date of your return. Tax act 2011 return Previous 2-month extension. Tax act 2011 return   If you cannot file your return within the automatic 2-month extension period, you generally can get an additional 4 months to file your return, for a total of 6 months. Tax act 2011 return The 2-month period and the 6-month period start at the same time. Tax act 2011 return You have to request the additional 4 months by the new due date allowed by the 2-month extension. Tax act 2011 return   The additional 4 months of time to file (unlike the original 2-month extension) is not an extension of time to pay. Tax act 2011 return You must make an accurate estimate of your tax based on the information available to you. Tax act 2011 return If you find you cannot pay the full amount due with Form 4868, you can still get the extension. Tax act 2011 return You will owe interest on the unpaid amount from the original due date of the return. Tax act 2011 return   You also may be charged a penalty for paying the tax late unless you have reasonable cause for not paying your tax when due. Tax act 2011 return Penalties for paying the tax late are assessed from the original due date of your return, unless you qualify for the automatic 2-month extension. Tax act 2011 return In that situation, penalties for paying late are assessed from the extended due date of the payment (June 15 for calendar year taxpayers). Tax act 2011 return Additional extension of time for taxpayers out of the country. Tax act 2011 return   In addition to the 6-month extension, taxpayers who are out of the country can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Tax act 2011 return   To request this extension, you must send the Internal Revenue Service a letter explaining the reasons why you need the additional 2 months. Tax act 2011 return Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0045   You will not receive any notification from the Internal Revenue Service unless your request is denied. Tax act 2011 return   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350, discussed next. Tax act 2011 return Extension of time to meet tests. Tax act 2011 return   You generally cannot get an extension of more than 6 months. Tax act 2011 return However, if you are outside the United States and meet certain requirements, you may be able to get a longer extension. Tax act 2011 return   You can get an extension of more than 6 months to file your tax return if you need the time to meet either the bona fide residence test or the physical presence test to qualify for either the foreign earned income exclusion or the foreign housing exclusion or deduction. Tax act 2011 return The tests, the exclusions, and the deduction are explained in chapter 4. Tax act 2011 return   You should request an extension if all three of the following apply. Tax act 2011 return You are a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien. Tax act 2011 return You expect to meet either the bona fide residence test or the physical presence test, but not until after your tax return is due. Tax act 2011 return Your tax home is in a foreign country (or countries) throughout your period of bona fide residence or physical presence, whichever applies. Tax act 2011 return   If you are granted an extension, it generally will be to 30 days beyond the date on which you can reasonably expect to qualify for an exclusion or deduction under either the bona fide residence test or the physical presence test. Tax act 2011 return However, if you have moving expenses that are for services performed in 2 years, you may be granted an extension until after the end of the second year. Tax act 2011 return How to get an extension. Tax act 2011 return   To obtain an extension, file Form 2350 either by giving it to a local IRS representative or other IRS employee or by mailing it to the: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0045   You must file Form 2350 by the due date for filing your return. Tax act 2011 return Generally, if both your tax home and your abode are outside the United States and Puerto Rico on the regular due date of your return and you file on a calendar year basis, the due date for filing your return is June 15. Tax act 2011 return What if tests are not met. Tax act 2011 return   If you obtain an extension and unforeseen events make it impossible for you to meet either the bona fide residence test or the physical presence test, you should file your income tax return as soon as possible because you must pay interest on any tax due after the regular due date of the return (even though an extension was granted). Tax act 2011 return    You should make any request for an extension early, so that if it is denied you still can file your return on time. Tax act 2011 return Otherwise, if you file late and additional tax is due, you may be subject to a penalty. Tax act 2011 return Return filed before test is met. Tax act 2011 return   If you file a return before you meet the bona fide residence test or the physical presence test, you must include all income from both U. Tax act 2011 return S. Tax act 2011 return and foreign sources and pay the tax on that income. Tax act 2011 return If you later meet either of the tests, you can claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction on Form 1040X. Tax act 2011 return Foreign Currency You must express the amounts you report on your U. Tax act 2011 return S. Tax act 2011 return tax return in U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return How you do this depends on your functional currency. Tax act 2011 return Your functional currency generally is the U. Tax act 2011 return S. Tax act 2011 return dollar unless you are required to use the currency of a foreign country. Tax act 2011 return You must make all federal income tax determinations in your functional currency. Tax act 2011 return The U. Tax act 2011 return S. Tax act 2011 return dollar is the functional currency for all taxpayers except some qualified business units (QBUs). Tax act 2011 return A QBU is a separate and clearly identified unit of a trade or business that maintains separate books and records. Tax act 2011 return Even if you have a QBU, your functional currency is the dollar if any of the following apply. Tax act 2011 return You conduct the business in U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return The principal place of business is located in the United States. Tax act 2011 return You choose to or are required to use the U. Tax act 2011 return S. Tax act 2011 return dollar as your functional currency. Tax act 2011 return The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. Tax act 2011 return Make all income tax determinations in your functional currency. Tax act 2011 return If your functional currency is the U. Tax act 2011 return S. Tax act 2011 return dollar, you must immediately translate into U. Tax act 2011 return S. Tax act 2011 return dollars all items of income, expense, etc. Tax act 2011 return (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Tax act 2011 return Use the exchange rate prevailing when you receive, pay, or accrue the item. Tax act 2011 return If there is more than one exchange rate, use the one that most properly reflects your income. Tax act 2011 return You can generally get exchange rates from banks and U. Tax act 2011 return S. Tax act 2011 return Embassies. Tax act 2011 return If your functional currency is not the U. Tax act 2011 return S. Tax act 2011 return dollar, make all income tax determinations in your functional currency. Tax act 2011 return At the end of the year, translate the results, such as income or loss, into U. Tax act 2011 return S. Tax act 2011 return dollars to report on your income tax return. Tax act 2011 return Blocked Income You generally must report your foreign income in terms of U. Tax act 2011 return S. Tax act 2011 return dollars and, with one exception (see Fulbright Grant, later), you must pay taxes due on it in U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return If, because of restrictions in a foreign country, your income is not readily convertible into U. Tax act 2011 return S. Tax act 2011 return dollars or into other money or property that is readily convertible into U. Tax act 2011 return S. Tax act 2011 return dollars, your income is “blocked” or “deferrable” income. Tax act 2011 return You can report this income in one of two ways: Report the income and pay your federal income tax with U. Tax act 2011 return S. Tax act 2011 return dollars that you have in the United States or in some other country, or Postpone the reporting of the income until it becomes unblocked. Tax act 2011 return If you choose to postpone the reporting of the income, you must file an information return with your tax return. Tax act 2011 return For this information return, you should use another Form 1040 labeled “Report of Deferrable Foreign Income, pursuant to Rev. Tax act 2011 return Rul. Tax act 2011 return 74-351. Tax act 2011 return ” You must declare on the information return that you will include the deferrable income in your taxable income for the year that it becomes unblocked. Tax act 2011 return You also must state that you waive any right to claim that the deferrable income was includible in your income for any earlier year. Tax act 2011 return You must report your income on your information return using the foreign currency in which you received that income. Tax act 2011 return If you have blocked income from more than one foreign country, include a separate information return for each country. Tax act 2011 return Income becomes unblocked and reportable for tax purposes when it becomes convertible, or when it is converted, into U. Tax act 2011 return S. Tax act 2011 return dollars or into other money or property that is convertible into U. Tax act 2011 return S. Tax act 2011 return currency. Tax act 2011 return Also, if you use blocked income for your personal expenses or dispose of it by gift, bequest, or devise, you must treat it as unblocked and reportable. Tax act 2011 return If you have received blocked income on which you have not paid tax, you should check to see whether that income is still blocked. Tax act 2011 return If it is not, you should take immediate steps to pay tax on it, file a declaration or amended declaration of estimated tax, and include the income on your tax return for the year in which the income became unblocked. Tax act 2011 return If you choose to postpone reporting blocked income and in a later tax year you wish to begin including it in gross income although it is still blocked, you must obtain the permission of the IRS to do so. Tax act 2011 return To apply for permission, file Form 3115, Application for Change in Accounting Method. Tax act 2011 return You also must request permission from the IRS on Form 3115 if you have not chosen to defer the reporting of blocked income in the past, but now wish to begin reporting blocked income under the deferred method. Tax act 2011 return See the instructions for Form 3115 for information on changing your accounting method. Tax act 2011 return Fulbright Grant All income must be reported in U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return In most cases, the tax also must be paid in U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return If, however, at least 70% of your Fulbright grant has been paid in nonconvertible foreign currency (blocked income), you can use the currency of the host country to pay the part of the U. Tax act 2011 return S. Tax act 2011 return tax that is based on the blocked income. Tax act 2011 return Paying U. Tax act 2011 return S. Tax act 2011 return tax in foreign currency. Tax act 2011 return   To qualify for this method of payment, you must prepare a statement that shows the following information. Tax act 2011 return You were a Fulbright grantee and were paid in nonconvertible foreign currency. Tax act 2011 return The total grant you received during the year and the amount you received in nonconvertible foreign currency. Tax act 2011 return At least 70% of the grant was paid in nonconvertible foreign currency. Tax act 2011 return The statement must be certified by the U. Tax act 2011 return S. Tax act 2011 return educational foundation or commission paying the grant or other person having control of grant payments to you. Tax act 2011 return   You should prepare at least two copies of this statement. Tax act 2011 return Attach one copy to your Form 1040 and keep the other copy for identification purposes when you make a tax deposit of nonconvertible foreign currency. Tax act 2011 return Figuring actual tax. Tax act 2011 return   When you prepare your income tax return, you may owe tax or the entire liability may have been satisfied with your estimated tax payments. Tax act 2011 return If you owe tax, figure the part due to (and payable in) the nonconvertible foreign currency by using the following formula. Tax act 2011 return   Adjusted gross income that is blocked income × Total U. Tax act 2011 return S. Tax act 2011 return tax = Tax on blocked income     Total adjusted  gross income     You must attach all of the following to the return. Tax act 2011 return A copy of the certified statement discussed earlier. Tax act 2011 return A detailed statement showing the allocation of tax attributable to amounts received in foreign currency and the rates of exchange used in determining your tax liability in U. Tax act 2011 return S. Tax act 2011 return dollars. Tax act 2011 return The original deposit receipt for any balance of tax due that you paid in nonconvertible foreign currency. Tax act 2011 return Figuring estimated tax on nonconvertible foreign currency. Tax act 2011 return   If you are liable for estimated tax (discussed later), figure the amount you can pay to the IRS in nonconvertible foreign currency using the following formula. Tax act 2011 return   Adjusted gross income that is blocked income × Total estimated U. Tax act 2011 return S. Tax act 2011 return tax = Estimated tax on blocked income     Total adjusted  gross income     If you must pay your host country income tax on your grant, subtract any estimated foreign tax credit that applies to your grant from the estimated tax on the blocked income. Tax act 2011 return Deposit of foreign currency with disbursing officer. Tax act 2011 return   Once you have determined the amount of the actual tax or estimated tax that you can pay in nonconvertible foreign currency, deposit that amount with the disbursing officer of the Department of State in the foreign country in which the foundation or commission paying the grant is located. Tax act 2011 return Estimated tax installments. Tax act 2011 return   You can either deposit the full estimated tax amount before the first installment due date or make four equal payments before the installment due dates. Tax act 2011 return See Estimated Tax , later. Tax act 2011 return Deposit receipt. Tax act 2011 return   Upon accepting the foreign currency, the disbursing officer will give you a receipt in duplicate. Tax act 2011 return The original of this receipt (showing the amount of foreign currency deposited and its equivalent in U. Tax act 2011 return S. Tax act 2011 return dollars) should be attached to your Form 1040 or payment voucher from Form 1040-ES. Tax act 2011 return Keep the copy for your records. Tax act 2011 return Does My Return Have To Be On Paper? IRS e-file (electronic filing) is the fastest, easiest, and most convenient way to file your income tax return electronically. Tax act 2011 return IRS e-file offers accurate, safe, and fast alternatives to filing on paper. Tax act 2011 return IRS computers quickly and automatically check for errors or other missing information. Tax act 2011 return Even returns with a foreign address can be e-filed! How to e-file. Tax act 2011 return   There are three ways you can e-file. Tax act 2011 return Use your personal computer. Tax act 2011 return Use a volunteer. Tax act 2011 return Many programs offering free tax help can e-file your return. Tax act 2011 return Use a tax professional. Tax act 2011 return Most tax professionals can e-file your return. Tax act 2011 return These methods are explained in detail in the instructions for your tax return. Tax act 2011 return Where To File If any of the following situations apply to you, do not file your return with the service center listed for your home state. Tax act 2011 return You claim the foreign earned income exclusion. Tax act 2011 return You claim the foreign housing exclusion or deduction. Tax act 2011 return You live in a foreign country. Tax act 2011 return Instead, use one of the following special addresses. Tax act 2011 return If you are not enclosing a check or money order, file your return with the: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 USA If you are enclosing a check or money order, file your return with: Internal Revenue Service Center P. Tax act 2011 return O. Tax act 2011 return Box 1303 Charlotte, NC 28201-1303 USA If you do not know where your legal residence is and you do not have a principal place of business in the United States, you can file with the appropriate address listed above. Tax act 2011 return However, you should not file with the addresses listed above if you are a bona fide resident of the U. Tax act 2011 return S. Tax act 2011 return Virgin Islands, Guam, or the Commonwealth of the Northern Mariana Islands during your entire tax year. Tax act 2011 return Resident of U. Tax act 2011 return S. Tax act 2011 return Virgin Islands (USVI). Tax act 2011 return   If you are a bona fide resident of the USVI during your entire tax year, you generally are not required to file a U. Tax act 2011 return S. Tax act 2011 return return. Tax act 2011 return However, you must file a return with the USVI. Tax act 2011 return    Send your return to the:     Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. Tax act 2011 return Thomas, Virgin Islands 00802 Non-USVI resident with USVI income. Tax act 2011 return   If you are a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien and you have income from sources in the USVI or income effectively connected with the conduct of a trade or business in the USVI, and you are not a bona fide resident of the USVI during your entire tax year, you must file identical tax returns with the United States and the USVI. Tax act 2011 return File the original return with the United States and file a signed copy of the U. Tax act 2011 return S. Tax act 2011 return return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue. Tax act 2011 return   You must complete Form 8689, Allocation of Individual Income Tax to the U. Tax act 2011 return S. Tax act 2011 return Virgin Islands, and attach a copy to both your U. Tax act 2011 return S. Tax act 2011 return return and your USVI return. Tax act 2011 return You should file your U. Tax act 2011 return S. Tax act 2011 return return with the address listed under Where To File. Tax act 2011 return   See Publication 570, Tax Guide for Individuals With Income From U. Tax act 2011 return S. Tax act 2011 return Possessions, for information about filing Virgin Islands returns. Tax act 2011 return Resident of Guam. Tax act 2011 return   If you are a bona fide resident of Guam during your entire tax year, you should file a return with Guam. Tax act 2011 return    Send your return to the:     Department of Revenue and Taxation Government of Guam P. Tax act 2011 return O. Tax act 2011 return Box 23607 GMF, GU 96921   However, if you have income from sources within Guam and you are a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien, but not a bona fide resident of Guam during the entire tax year, you should file a return with the United States. Tax act 2011 return Send your return to the address listed under Where To File. Tax act 2011 return   See Publication 570 for information about filing Guam returns. Tax act 2011 return Resident of the Commonwealth of the Northern Mariana Islands. Tax act 2011 return   If you are a bona fide resident of the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you should file a return with the Northern Mariana Islands. Tax act 2011 return    Send your return to the:      Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Tax act 2011 return O. Tax act 2011 return Box 5234, CHRB Saipan, MP 96950   However, if you have income from sources within the CNMI and you are a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien, but not a bona fide resident of the CNMI during the entire tax year, you should file a return with the United States. Tax act 2011 return Send your return to the address listed under Where To File. Tax act 2011 return   See Publication 570 for information about filing Northern Mariana Islands returns. Tax act 2011 return Nonresident Alien Spouse Treated as a Resident If, at the end of your tax year, you are married and one spouse is a U. Tax act 2011 return S. Tax act 2011 return citizen or a resident alien and the other is a nonresident alien, you can choose to treat the nonresident as a U. Tax act 2011 return S. Tax act 2011 return resident. Tax act 2011 return This includes situations in which one of you is a nonresident alien at the beginning of the tax year and a resident alien at the end of the year and the other is a nonresident alien at the end of the year. Tax act 2011 return If you make this choice, the following two rules apply. Tax act 2011 return You and your spouse are treated, for income tax purposes, as residents for all tax years that the choice is in effect. Tax act 2011 return You must file a joint income tax return for the year you make the choice. Tax act 2011 return This means that neither of you can claim under any tax treaty not to be a U. Tax act 2011 return S. Tax act 2011 return resident for a tax year for which the choice is in effect. Tax act 2011 return You can file joint or separate returns in years after the year in which you make the choice. Tax act 2011 return Example 1. Tax act 2011 return Pat Smith, a U. Tax act 2011 return S. Tax act 2011 return citizen, is married to Norman, a nonresident alien. Tax act 2011 return Pat and Norman make the choice to treat Norman as a resident alien by attaching a statement to their joint return. Tax act 2011 return Pat and Norman must report their worldwide income for the year they make the choice and for all later years unless the choice is ended or suspended. Tax act 2011 return Although Pat and Norman must file a joint return for the year they make the choice, they can file either joint or separate returns for later years. Tax act 2011 return Example 2. Tax act 2011 return When Bob and Sharon Williams got married, both were nonresident aliens. Tax act 2011 return In June of last year, Bob became a resident alien and remained a resident for the rest of the year. Tax act 2011 return Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return for last year. Tax act 2011 return Bob and Sharon must report their worldwide income for last year and all later years unless the choice is ended or suspended. Tax act 2011 return Bob and Sharon must file a joint return for last year, but they can file either joint or separate returns for later years. Tax act 2011 return If you do not choose to treat your nonresident alien spouse as a U. Tax act 2011 return S. Tax act 2011 return resident, you may be able to use head of household filing status. Tax act 2011 return To use this status, you must pay more than half the cost of maintaining a household for certain dependents or relatives other than your nonresident alien spouse. Tax act 2011 return For more information, see Publication 501. Tax act 2011 return Social Security Number (SSN) If you choose to treat your nonresident alien spouse as a U. Tax act 2011 return S. Tax act 2011 return resident, your spouse must have either an SSN or an individual taxpayer identification number (ITIN). Tax act 2011 return To get an SSN for a nonresident alien spouse, apply at an office of the U. Tax act 2011 return S. Tax act 2011 return Social Security Administration (SSA) or U. Tax act 2011 return S. Tax act 2011 return consulate. Tax act 2011 return You must complete Form SS-5, Application for a Social Security Card, available at www. Tax act 2011 return socialsecurity. Tax act 2011 return gov or by calling 1-800-772-1213. Tax act 2011 return You must also provide original or certified copies of documents to verify that spouse's age, identity, and citizenship. Tax act 2011 return If the nonresident alien spouse is not eligible to get an SSN, he or she can file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS to apply for an ITIN. Tax act 2011 return How To Make the Choice Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. Tax act 2011 return It should contain the following: A declaration that one spouse was a nonresident alien and the other spouse a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien on the last day of your tax year and that you choose to be treated as U. Tax act 2011 return S. Tax act 2011 return residents for the entire tax year, and The name, address, and social security number (or individual taxpayer identification number) of each spouse. Tax act 2011 return (If one spouse died, include the name and address of the person making the choice for the deceased spouse. Tax act 2011 return ) You generally make this choice when you file your joint return. Tax act 2011 return However, you also can make the choice by filing a joint amended return on Form 1040X. Tax act 2011 return Attach Form 1040, 1040A, or 1040EZ and print “Amended” across the top of the amended return. Tax act 2011 return If you make the choice with an amended return, you and your spouse also must amend any returns that you may have filed after the year for which you made the choice. Tax act 2011 return You generally must file the amended joint return within 3 years from the date you filed your original U. Tax act 2011 return S. Tax act 2011 return income tax return or 2 years from the date you paid your income tax for that year, whichever is later. Tax act 2011 return Table 1–1. Tax act 2011 return Ending the Choice To Treat Nonresident Alien Spouse as a Resident Revocation   Either spouse can revoke the choice for any tax year. Tax act 2011 return   • The revocation must be made by the due date for filing the tax return for that tax year. Tax act 2011 return   • The spouse who revokes the choice must attach a signed statement declaring that the choice is being revoked. Tax act 2011 return The statement revoking the choice must include the following:     • The name, address, and social security number (or taxpayer identification number) of each spouse. Tax act 2011 return     • The name and address of any person who is revoking the choice for a deceased spouse. Tax act 2011 return     • A list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income. Tax act 2011 return   • If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where the last joint return was filed. Tax act 2011 return Death   The death of either spouse ends the choice, beginning with the first tax year following the year in which the spouse died. Tax act 2011 return   • If the surviving spouse is a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used. Tax act 2011 return   • If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died. Tax act 2011 return Divorce or  Legal separation   A divorce or legal separation ends the choice as of the beginning of the tax year in which the legal separation occurs. Tax act 2011 return Inadequate records   The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records. Tax act 2011 return Suspending the Choice The choice to be treated as a resident alien does not apply to any later tax year if neither of you is a U. Tax act 2011 return S. Tax act 2011 return citizen or resident alien at any time during the later tax year. Tax act 2011 return Example. Tax act 2011 return Dick Brown was a resident alien on December 31, 2010, and married to Judy, a nonresident alien. Tax act 2011 return They chose to treat Judy as a resident alien and filed a joint 2010 income tax return. Tax act 2011 return On January 10, 2012, Dick became a nonresident alien. Tax act 2011 return Judy had remained a nonresident alien. Tax act 2011 return Because Dick was a resident alien during part of 2012, Dick and Judy can file joint or separate returns for that year. Tax act 2011 return Neither Dick nor Judy was a resident alien at any time during 2013 and their choice is suspended for that year. Tax act 2011 return For 2013, both are treated as nonresident aliens. Tax act 2011 return If Dick becomes a resident alien again in 2014, their choice is no longer suspended and both are treated as resident aliens. Tax act 2011 return Ending the Choice Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier) or ended in one of the ways shown in Table 1-1. Tax act 2011 return If the choice is ended for any of the reasons listed in Table 1-1, neither spouse can make a choice in any later tax year. Tax act 2011 return Estimated Tax The requirements for determining who must pay estimated tax are the same for a U. Tax act 2011 return S. Tax act 2011 return citizen or resident abroad as for a taxpayer in the United States. Tax act 2011 return For current instructions on making estimated tax payments, see Form 1040-ES. Tax act 2011 return If you had a tax liability for 2013, you may have to pay estimated tax for 2014. Tax act 2011 return Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 after subtracting your withholding and credits and you expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Tax act 2011 return (The return must cover all 12 months. Tax act 2011 return ) If less than two-thirds of your gross income for 2013 and 2014 is from farming or fishing and your adjusted gross income for 2013 is more than $150,000 ($75,000 if you are married and file separately), substitute 110% for 100% in (2). Tax act 2011 return See Publication 505 for more information. Tax act 2011 return The first installment of estimated tax is due on April 15, 2014. Tax act 2011 return Foreign earned income exclusion. Tax act 2011 return   When figuring your estimated gross income, subtract amounts you expect to exclude under the foreign earned income exclusion and the foreign housing exclusion. Tax act 2011 return In addition, you can reduce your income by your estimated foreign housing deduction. Tax act 2011 return However, you must estimate tax on your nonexcluded income using the tax rates that will apply had you not excluded the income. Tax act 2011 return If the actual amount of the exclusion or deduction is less than you estimate, you may have to pay a penalty for underpayment of estimated tax. Tax act 2011 return   For more information about figuring your estimated tax, see Publication 505. Tax act 2011 return Other Forms You May Have To File FinCEN Form 114 (replaces Form TD F 90-22. Tax act 2011 return 1). Tax act 2011 return   Beginning October 1, 2013, Form 114, Report of Foreign Bank and Financial Accounts (FBAR), must be filed instead of Form TD F 90-22. Tax act 2011 return 1. Tax act 2011 return Form 114 is filed electronically with the Financial Crimes Enforcement Network (FinCEN). Tax act 2011 return See the filing instructions at www. Tax act 2011 return bsaefiling. Tax act 2011 return fincen. Tax act 2011 return treas. Tax act 2011 return gov/main. Tax act 2011 return html. Tax act 2011 return   You must file Form 114 if you had any financial interest in, or signature or other authority over a bank, securities, or other financial account in a foreign country. Tax act 2011 return You do not need to file the report if the assets are with a U. Tax act 2011 return S. Tax act 2011 return military banking facility operated by a financial institution or if the combined assets in the account(s) are $10,000 or less during the entire year. Tax act 2011 return   More information about the filing of Form 114 can be found in the instructions for the form. Tax act 2011 return FinCEN Form 105. Tax act 2011 return   You must file Form 105, Report of International Transportation of Currency or Monetary Instruments, if you physically transport, mail, ship, or cause to be physically transported, mailed, or shipped into or out of the United States, currency or other monetary instruments totaling more than $10,000 at one time. Tax act 2011 return Certain recipients of currency or monetary instruments also must file Form 105. Tax act 2011 return   More information about the filing of Form 105 can be found in the instructions on the back of the form. Tax act 2011 return Form 8938. Tax act 2011 return   You must file Form 8938 to report the ownership of specified foreign financial assets if the total value of those assets exceeds an applicable threshold amount (the “reporting threshold ”). Tax act 2011 return The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. Tax act 2011 return Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. Tax act 2011 return S. Tax act 2011 return person. Tax act 2011 return   You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. Tax act 2011 return   More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. Tax act 2011 return Prev  Up  Next   Home   More Online Publications
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The Tax Act 2011 Return

Tax act 2011 return 4. Tax act 2011 return   Other Section 501(c) Organizations Table of Contents Introduction 501(c)(4) - Civic Leagues and Social Welfare OrganizationsSpecific Organizations 501(c)(5) - Labor, Agricultural and Horticultural OrganizationsLabor Organizations Agricultural and Horticultural Organizations 501(c)(6) - Business Leagues, etc. Tax act 2011 return Line of business. Tax act 2011 return Examples. Tax act 2011 return Improvement of business conditions. Tax act 2011 return Exception for local legislation. Tax act 2011 return De minimis exception. Tax act 2011 return Grass roots lobbying. Tax act 2011 return 501(c)(7) - Social and Recreation ClubsLimited membership. Tax act 2011 return Support. Tax act 2011 return Facilities open to public. Tax act 2011 return Gross receipts from nonmembership sources. Tax act 2011 return Gross receipts. Tax act 2011 return Nontraditional activities. Tax act 2011 return 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal SocietiesFraternal Beneficiary Societies (501(c)(8)) Domestic Fraternal Societies (501(c)(10)) 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' AssociationsLocal Employees' Associations (501(c)(4)) Voluntary Employees' Beneficiary Associations (501(c)(9)) Supplemental Unemployment Benefit Trusts (501(c)(17)) 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like OrganizationsMembership. Tax act 2011 return Losses and expenses. Tax act 2011 return Distributions of proceeds. Tax act 2011 return The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. Tax act 2011 return Perpetual care organization. Tax act 2011 return Care of individual plots. Tax act 2011 return 501(c)(14) - Credit Unions and Other Mutual Financial OrganizationsState-Chartered Credit Unions Other Mutual Financial Organizations 501(c)(19) - Veterans' Organizations 501(c)(20) - Group Legal Services Plan Organizations 501(c)(21) - Black Lung Benefit TrustsExcise taxes. Tax act 2011 return 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. Tax act 2011 return Waiver of payment of income. Tax act 2011 return 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent CorporationsUnrelated Business Income 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations 501(c)(29) - CO-OP Health Insurance Issuers New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers General Requirements for Exemption under 501(c)(29) and Annual Filing Requirement Additional Guidance for Prospective 501(c)(29) Organizations Introduction This chapter contains specific information for certain organizations described in section 501(c), other than those organizations that are described in section 501(c)(3). Tax act 2011 return Section 501(c)(3) organizations are covered in chapter 3 of this publication. Tax act 2011 return The Table of Contents at the beginning of this publication, as well as the Organization Reference Chart, may help you locate at a glance the type of organization discussed in this chapter. Tax act 2011 return 501(c)(4) - Civic Leagues and Social Welfare Organizations If your organization is not organized for profit and will be operated primarily to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). Tax act 2011 return The discussion that follows describes the information you must provide when applying. Tax act 2011 return For application procedures, see chapter 1. Tax act 2011 return To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. Tax act 2011 return In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. Tax act 2011 return If the organization provides an excess benefit to certain persons, an excise tax may be imposed. Tax act 2011 return See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. Tax act 2011 return Examples. Tax act 2011 return   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. Tax act 2011 return Nonprofit operation. Tax act 2011 return   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. Tax act 2011 return However, such evidence, including the fact that your organization is organized under a state law relating to nonprofit corporations, will not in itself establish a social welfare purpose. Tax act 2011 return Social welfare. Tax act 2011 return   To establish that your organization is organized primarily to promote social welfare, you should submit evidence with your application showing that your organization will operate primarily to further (in some way) the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). Tax act 2011 return   An organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community. Tax act 2011 return It therefore does not qualify as a section 501(c)(4) organization. Tax act 2011 return Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community. Tax act 2011 return However, an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. Tax act 2011 return Political activity. Tax act 2011 return   Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. Tax act 2011 return However, if you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. Tax act 2011 return See the discussion in chapter 2 under Political Organization Income Tax Return . Tax act 2011 return Social or recreational activity. Tax act 2011 return   If social activities will be the primary purpose of your organization, you should not file an application for exemption as a social welfare organization but should file for exemption as a social club described in section 501(c)(7). Tax act 2011 return Retirement benefit program. Tax act 2011 return   An organization established by its members that has as its primary activity providing supplemental retirement benefits to its members or death benefits to their beneficiaries does not qualify as an exempt social welfare organization. Tax act 2011 return It may qualify under another paragraph of section 501(c) depending on all the facts. Tax act 2011 return   However, a nonprofit association that is established, maintained, and funded by a local government to provide the only retirement benefits to a class of employees may qualify as a social welfare organization under section 501(c)(4). Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. Tax act 2011 return Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. Tax act 2011 return They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. Tax act 2011 return However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Tax act 2011 return for more information. Tax act 2011 return For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. Tax act 2011 return gov. Tax act 2011 return Specific Organizations The following information should be contained in the application form and accompanying statements of certain types of civic leagues or social welfare organizations. Tax act 2011 return Volunteer fire companies. Tax act 2011 return   If your organization wishes to obtain exemption as a volunteer fire company or similar organization, you should submit evidence that its members are actively engaged in fire fighting and similar disaster assistance, whether it actually owns the fire fighting equipment, and whether it provides any assistance for its members, such as death and medical benefits in case of injury to them. Tax act 2011 return   If your organization does not have an independent social purpose, such as providing recreational facilities for members, it may be exempt under section 501(c)(3). Tax act 2011 return In this event, your organization should file Form 1023. Tax act 2011 return Homeowners' associations. Tax act 2011 return   A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development should show that it is operated for the benefit of all the residents of the community. Tax act 2011 return The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. Tax act 2011 return Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. Tax act 2011 return Even if an area represented by an association is not a community, the association can still qualify for exemption if its activities benefit a community. Tax act 2011 return   The association should submit evidence that areas such as roadways and park land that it owns and maintains are open to the general public and not just its own members. Tax act 2011 return It also must show that it does not engage in exterior maintenance of private homes. Tax act 2011 return   A homeowners' association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally can elect under the provisions of section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. Tax act 2011 return Other organizations. Tax act 2011 return   Other nonprofit organizations that qualify as social welfare organizations include: An organization operating an airport that is on land owned by a local government, which supervises the airport's operation, and that serves the general public in an area with no other airport, A community association that works to improve public services, housing, and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs, and meetings; and contracts with a private security service to patrol the community, A community association devoted to preserving the community's traditions, architecture, and appearance by representing it before the local legislature and administrative agencies in zoning, traffic, and parking matters, An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area, and An organization that holds an annual festival of regional customs and traditions. Tax act 2011 return 501(c)(5) - Labor, Agricultural and Horticultural Organizations If you are a member of an organization that wants to obtain recognition of exemption from federal income tax as a labor, agricultural, or horticultural organization, you should submit an application on Form 1024. Tax act 2011 return You must indicate in your application for exemption and accompanying statements that no part of the organization's net earnings will inure to the benefit of any member. Tax act 2011 return In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. Tax act 2011 return Submit any additional information that may be required, as described in this section. Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. Tax act 2011 return However, such payments may be deductible as business expenses if they are ordinary and necessary in the conduct of the taxpayer's trade or business. Tax act 2011 return For more information about certain limits affecting the deductibility of these business expenses, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Tax act 2011 return Labor Organizations A labor organization is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. Tax act 2011 return To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. Tax act 2011 return In addition, no net earnings of the organization can inure to the benefit of any member. Tax act 2011 return Composition of membership. Tax act 2011 return   While a labor organization generally is composed of employees or representatives of the employees (in the form of collective bargaining agents) and similar employee groups, evidence that an organization's membership consists mainly of workers does not in itself indicate an exempt purpose. Tax act 2011 return You must show in your application that your organization has the purposes described in the preceding paragraph. Tax act 2011 return These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. Tax act 2011 return Benefits to members. Tax act 2011 return   The payment by a labor organization of death, sick, accident, and similar benefits to its individual members with funds contributed by its members, if made under a plan to better the conditions of the members, does not preclude exemption as a labor organization. Tax act 2011 return However, an organization does not qualify for exemption as a labor organization if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member. Tax act 2011 return   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. Tax act 2011 return gov. Tax act 2011 return Agricultural and Horticultural Organizations Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. Tax act 2011 return For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. Tax act 2011 return The term harvesting, in this case, includes fishing and related pursuits. Tax act 2011 return Agricultural organizations can be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. Tax act 2011 return When the activities are directed toward the improvement of marketing or other business conditions in one or more lines of business, rather than the improvement of production techniques or the betterment of the conditions of persons engaged in agriculture, the organization must qualify for exemption as a business league, board of trade, or other organization, as discussed next in the section on 501(c)(6) organizations. Tax act 2011 return The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. Tax act 2011 return The following list contains some examples of activities that show an agricultural or horticultural purpose. Tax act 2011 return Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. Tax act 2011 return Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. Tax act 2011 return Testing soil for members and nonmembers of the farm bureau on a cost basis, the results of the tests and other recommendations being furnished to the community members to educate them in soil treatment. Tax act 2011 return Guarding the purity of a specific breed of livestock. Tax act 2011 return Encouraging improvements in the production of fish on privately owned fish farms. Tax act 2011 return Negotiating with processors for the price to be paid to members for their crops. Tax act 2011 return For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. Tax act 2011 return gov. Tax act 2011 return 501(c)(6) - Business Leagues, etc. Tax act 2011 return If your association wants to apply for recognition of exemption from federal income tax as a nonprofit business league, chamber of commerce, real estate board, or board of trade, it should file Form 1024. Tax act 2011 return For a discussion of the procedure to follow, see chapter 1. Tax act 2011 return Your organization must indicate in its application form and attached statements that no part of its net earnings will inure to the benefit of any private shareholder or individual and that it is not organized for profit or organized to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining). Tax act 2011 return In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. Tax act 2011 return It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. Tax act 2011 return A business league, in general, is an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit. Tax act 2011 return Trade associations and professional associations are considered business leagues. Tax act 2011 return Chamber of commerce. Tax act 2011 return   A chamber of commerce usually is composed of the merchants and traders of a city. Tax act 2011 return Board of trade. Tax act 2011 return   A board of trade often consists of persons engaged in similar lines of business. Tax act 2011 return For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. Tax act 2011 return   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. Tax act 2011 return Real estate board. Tax act 2011 return   A real estate board consists of members interested in improving the business conditions in the real estate field. Tax act 2011 return It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. Tax act 2011 return Professional football leagues. Tax act 2011 return   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). Tax act 2011 return They are exempt whether or not they administer a pension fund for football players. Tax act 2011 return General purpose. Tax act 2011 return   You must indicate in the material submitted with your application that your organization will be devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. Tax act 2011 return It must be shown that the conditions of a particular trade or the interests of the community will be advanced. Tax act 2011 return Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose. Tax act 2011 return Line of business. Tax act 2011 return   This term generally refers either to an entire industry or to all components of an industry within a geographic area. Tax act 2011 return It does not include a group composed of businesses that market a particular brand within an industry. Tax act 2011 return Common business interest. Tax act 2011 return   A common business interest of all members of the organization must be established by the application documents. Tax act 2011 return Examples. Tax act 2011 return   Activities that would tend to illustrate a common business interest are: Promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association, Education of the public in the use of credit, Establishment of uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies, Establishment and maintenance of the integrity of a local commercial market, Operation of a trade publication primarily intended to benefit an entire industry, and Encouragement of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). Tax act 2011 return Improvement of business conditions. Tax act 2011 return   Generally, this must be shown to be the purpose of the organization. Tax act 2011 return This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the name of members, interest-free loans, assigning exclusive franchise areas, operation of a real estate multiple listing system, or operation of a credit reporting agency. Tax act 2011 return Stock or commodity exchange. Tax act 2011 return   A stock or commodity exchange is not a business league, chamber of commerce, real estate board, or board of trade and is not exempt under section 501(c)(6). Tax act 2011 return Legislative activity. Tax act 2011 return   An organization that is exempt under section 501(c)(6) can work for the enactment of laws to advance the common business interests of the organization's members. Tax act 2011 return Deduction not allowed for dues used for political or legislative activities. Tax act 2011 return   A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is reported to the taxpayer by the organization as having been used for any of the following activities. Tax act 2011 return Influencing legislation. Tax act 2011 return Participating or intervening in a political campaign for, or against, any candidate for public office. Tax act 2011 return Trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grass roots lobbying). Tax act 2011 return Communicating directly with certain executive branch officials to try to influence their official actions or positions. Tax act 2011 return See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. Tax act 2011 return Exception for local legislation. Tax act 2011 return   Members can deduct dues (or assessments) to an organization that are for expenses of: Appearing before, submitting statements to, or sending communications to members of a local council or similar governing body with respect to legislation or proposed legislation of direct interest to the member, or Communicating information between the member and the organization with respect to local legislation or proposed legislation of direct interest to the organization or the member. Tax act 2011 return Legislation or proposed legislation is of direct interest to a taxpayer if it will, or can reasonably be expected to, affect the taxpayer's trade or business. Tax act 2011 return De minimis exception. Tax act 2011 return   In-house expenditures of $2,000 or less for the year for activities (1) – (4) listed earlier will not prevent a deduction for dues if the dues meet all other tests to be deductible as a business expense. Tax act 2011 return Grass roots lobbying. Tax act 2011 return   A tax-exempt trade association, labor union, or similar organization is considered to be engaging in grass roots lobbying if it contacts prospective members or calls upon its own members to contact their employees and customers for the purpose of urging such persons to communicate with their elected state or Congressional representatives to support the promotion, defeat, or repeal of legislation that is of direct interest to the organization. Tax act 2011 return Any dues or assessments directly related to such activities are not deductible by the taxpayer, since the individuals being contacted, who are not members of the organization, are a segment of the general public. Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. Tax act 2011 return They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. Tax act 2011 return   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. Tax act 2011 return gov. Tax act 2011 return 501(c)(7) - Social and Recreation Clubs If your club is organized for pleasure, recreation, and other similar nonprofitable purposes and substantially all of its activities are for these purposes, it should file Form 1024 to apply for recognition of exemption from federal income tax. Tax act 2011 return In applying for recognition of exemption, you should submit the information described in this section. Tax act 2011 return Also see chapter 1 for the procedures to follow. Tax act 2011 return Typical organizations that should file for recognition of exemption as social clubs include: College alumni associations that are not described in chapter 3 under Alumni association , College fraternities or sororities operating chapter houses for students, Country clubs, Amateur hunting, fishing, tennis, swimming, and other sport clubs, Dinner clubs that provide a meeting place, library, and dining room for members, Hobby clubs, Garden clubs, and Variety clubs. Tax act 2011 return Discrimination prohibited. Tax act 2011 return   Your organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. Tax act 2011 return   However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. Tax act 2011 return Also, the restriction on religious discrimination does not apply to a club that is an auxiliary of a fraternal beneficiary society (discussed later) if that society is described in section 501(c)(8) and exempt from tax under section 501(a) and limits its membership to the members of a particular religion. Tax act 2011 return Private benefit prohibited. Tax act 2011 return   No part of the organization's net earnings can inure to the benefit of any person having a personal and private interest in the activities of the organization. Tax act 2011 return For purposes of this requirement, it is not necessary that net earnings be actually distributed. Tax act 2011 return Even undistributed earnings can benefit members. Tax act 2011 return Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. Tax act 2011 return However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. Tax act 2011 return Purposes. Tax act 2011 return   To show that your organization possesses the characteristics of a club within the meaning of the exemption law, you should submit evidence with your application that personal contact, commingling, and fellowship exist among members. Tax act 2011 return You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. Tax act 2011 return   Fellowship need not be present between each member and every other member of a club if it is a material part in the life of the organization. Tax act 2011 return A statewide or nationwide organization that is made up of individual members, but is divided into local groups, satisfies this requirement if fellowship is a material part of the life of each local group. Tax act 2011 return   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. Tax act 2011 return For example, a club that, in addition to its social activities, has a plan for the payment of sick and death benefits is not operating exclusively for pleasure, recreation, and other nonprofitable purposes. Tax act 2011 return Limited membership. Tax act 2011 return   The membership in a social club must be limited. Tax act 2011 return To show that your organization has a purpose that would characterize it as a club, you should submit evidence with your application that there are limits on admission to membership consistent with the character of the club. Tax act 2011 return   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. Tax act 2011 return Corporate members of a club are not the kind of members contemplated by the law. Tax act 2011 return Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. Tax act 2011 return See Gross receipts from nonmembership sources , later. Tax act 2011 return Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. Tax act 2011 return   The fact that a social club may have an associate (nonvoting) class of membership will not be, in and of itself, a cause for nonrecognition of exemption. Tax act 2011 return However, if one membership class pays substantially lower dues and fees than another membership class, although both classes enjoy the same rights and privileges in using the club facilities, there may be an inurement of income to the benefited class, resulting in a denial of the club's exemption. Tax act 2011 return Support. Tax act 2011 return   In general, your club should be supported solely by membership fees, dues, and assessments. Tax act 2011 return However, if otherwise entitled to exemption, your club will not be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities. Tax act 2011 return Business activities. Tax act 2011 return   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. Tax act 2011 return However, evidence submitted with your application form that your organization will provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests will not cause denial of exemption. Tax act 2011 return Facilities open to public. Tax act 2011 return   Evidence that your club's facilities will be open to the general public (persons other than members or their dependents or guests) may cause denial of exemption. Tax act 2011 return This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. Tax act 2011 return Gross receipts from nonmembership sources. Tax act 2011 return   A section 501(c)(7) organization can receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. Tax act 2011 return Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. Tax act 2011 return Of the 35% gross receipts listed above, up to 15% of the gross receipts can be derived from the use of the club's facilities or services by the general public. Tax act 2011 return If an organization has outside income that is more than these limits, all the facts and circumstances will be taken into account in determining whether the organization qualifies for exempt status. Tax act 2011 return Gross receipts. Tax act 2011 return   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. Tax act 2011 return These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. Tax act 2011 return Receipts do not include initiation fees and capital contributions. Tax act 2011 return Unusual amounts of income, such as from the sale of a clubhouse or similar facility, are not included in gross receipts or in figuring the percentage limits. Tax act 2011 return Nontraditional activities. Tax act 2011 return   Activities conducted by a social club need to further its exempt purposes. Tax act 2011 return Traditional business activities are those that further a social club's exempt purposes. Tax act 2011 return Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. Tax act 2011 return Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. Tax act 2011 return Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. Tax act 2011 return Fraternity foundations. Tax act 2011 return   If your organization is a foundation formed for the exclusive purpose of acquiring and leasing a chapter house to a local fraternity chapter or sorority chapter maintained at an educational institution and does not engage in any social or recreational activities, it may be a title holding corporation (discussed later under section 501(c)(2) organizations and under section 501(c)(25) organizations) rather than a social club. Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. Tax act 2011 return 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies This section describes the information to be provided upon application for recognition of exemption by two types of fraternal societies: beneficiary and domestic. Tax act 2011 return The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc. Tax act 2011 return , purposes. Tax act 2011 return The procedures to follow in applying for recognition of exemption are described in chapter 1. Tax act 2011 return If your organization is controlled by a central organization, you should check with your controlling organization to determine whether your unit has been included in a group exemption letter or can be added. Tax act 2011 return If so, your organization need not apply for individual recognition of exemption. Tax act 2011 return For more information, see Group Exemption Letter in chapter 1 of this publication. Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Donations by an individual to a domestic fraternal beneficiary society or a domestic fraternal society operating under the lodge system are deductible as charitable contributions only if used exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Tax act 2011 return Fraternal Beneficiary Societies (501(c)(8)) A fraternal beneficiary society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Tax act 2011 return The application and accompanying statements should establish that the organization: Is a fraternal organization, Operates under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system, and Provides for the payment of life, sick, accident, or other benefits to the members of the society, order, or association or their dependents. Tax act 2011 return Lodge system. Tax act 2011 return   Operating under the lodge system means carrying on activities under a form of organization that comprises local branches, chartered by a parent organization and largely self-governing, called lodges, chapters, or the like. Tax act 2011 return Payment of benefits. Tax act 2011 return   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. Tax act 2011 return An organization can qualify for exemption if most of its members are eligible for benefits, and the benefits are paid from contributions or dues paid by those members. Tax act 2011 return   The benefits must be limited to members and their dependents. Tax act 2011 return If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. Tax act 2011 return Whole-life insurance. Tax act 2011 return   Whole-life insurance constitutes a life benefit under section 501(c)(8) even though the policy may contain investment features such as a cash surrender value or a policy loan. Tax act 2011 return Reinsurance pool. Tax act 2011 return   Payments by a fraternal beneficiary society into a state-sponsored reinsurance pool that protects participating insurers against excessive losses on major medical health and accident insurance will not preclude exemption as a fraternal beneficiary society. Tax act 2011 return Domestic Fraternal Societies (501(c)(10)) A domestic fraternal society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Tax act 2011 return The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. Tax act 2011 return S. Tax act 2011 return , Operates under the lodge system, Devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and Does not provide for the payment of life, sick, accident, or other benefits to its members. Tax act 2011 return The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. Tax act 2011 return 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations This section describes the information to be provided upon application for recognition of exemption by the following types of employees' associations: A voluntary employees' beneficiary association (including federal employees' associations) organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries, if no part of the net earnings of the association inures to the benefit of any private shareholder or individual, and A supplemental unemployment benefit trust whose primary purpose is providing for payment of supplemental unemployment benefits. Tax act 2011 return Both the application form to file and the information to provide are discussed later under the section that describes your employee association. Tax act 2011 return Chapter 1 describes the procedures to follow in applying for exemption. Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. Tax act 2011 return Local Employees' Associations (501(c)(4)) A local association of employees whose membership is limited to employees of a designated person or persons in a particular municipality, and whose income will be devoted exclusively to charitable, educational, or recreational purposes. Tax act 2011 return A local employees' association must apply for recognition of exemption by filing Form 1024. Tax act 2011 return The organization must submit evidence that: It is of a purely local character, Its membership is limited to employees of a designated person or persons in a particular locality, and Its net earnings will be devoted exclusively to charitable, educational, or recreational purposes. Tax act 2011 return A local association of employees that has established a system of paying retirement or death benefits, or both, to its members will not qualify for exemption since the payment of these benefits is not considered as being for charitable, educational, or recreational purposes. Tax act 2011 return Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption. Tax act 2011 return Voluntary Employees' Beneficiary Associations (501(c)(9)) An application for recognition of exemption as a voluntary employees' beneficiary association must be filed on Form 1024. Tax act 2011 return The material submitted with the application must show that your organization: Is a voluntary association of employees, Will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose, and Will not allow any of its net earnings to inure to the benefit of any private individual or shareholder except in the form of scheduled benefit payments. Tax act 2011 return To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Tax act 2011 return Note. Tax act 2011 return Under section 4976, the reversion of funds from a section 501(c)(9) organization to the employer who created the beneficiary association may subject the employer to a 100% penalty excise tax on the amount of the reversion. Tax act 2011 return Notice requirement. Tax act 2011 return   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Tax act 2011 return The organization gives notice by filing Form 1024. Tax act 2011 return If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before notice is given. Tax act 2011 return An extension of time for filing the notice can be granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Tax act 2011 return Membership. Tax act 2011 return   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. Tax act 2011 return This common bond can be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. Tax act 2011 return   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. Tax act 2011 return For example, the owner of a business whose employees are members of the association can be a member. Tax act 2011 return An association will be considered composed of employees if 90% of its total membership on one day of each quarter of its tax year consists of employees. Tax act 2011 return Employees. Tax act 2011 return   Employees include individuals who became entitled to membership because they are or were employees. Tax act 2011 return For example, an individual will qualify as an employee even though the individual is on a leave of absence or has been terminated due to retirement, disability, or layoff. Tax act 2011 return   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. Tax act 2011 return Conversely, membership is involuntary if the designation as a member is due to employee status. Tax act 2011 return However, an association will be considered voluntary if employees are required to be members of the organization as a condition of their employment and they do not incur a detriment (such as a payroll deduction) as a result of their membership. Tax act 2011 return An employer has not imposed involuntary membership on the employee if membership is required as the result of a collective bargaining agreement or as an incident of membership in a labor organization. Tax act 2011 return Payment of benefits. Tax act 2011 return   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. Tax act 2011 return The benefits can be provided directly by your association or indirectly by your association through the payments of premiums to an insurance company (or fees to a medical clinic). Tax act 2011 return Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. Tax act 2011 return Nondiscrimination requirements. Tax act 2011 return   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. Tax act 2011 return However, if the organization is part of a plan that is a collective bargaining agreement that was the subject of good faith bargaining between employee organizations and employers, the plan need not meet these requirements for the organization to qualify as tax exempt. Tax act 2011 return   A plan meets the nondiscrimination requirements only if both of the following statements are true. Tax act 2011 return Each class of benefits under the plan is provided under a classification of employees that is set forth in the plan and does not discriminate in favor of employees who are highly compensated individuals. Tax act 2011 return The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. Tax act 2011 return A life insurance, disability, severance pay, or supplemental unemployment compensation benefit does not discriminate in favor of highly compensated individuals merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan. Tax act 2011 return   For purposes of determining whether a plan meets the nondiscrimination requirements, the employer can elect to exclude all disability or severance payments payable to individuals who are in pay status as of January 1, 1985. Tax act 2011 return This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. Tax act 2011 return   If a plan provides a benefit for which there is a nondiscrimination provision provided under Chapter 1 of the Internal Revenue Code as a condition of that benefit being excluded from gross income, these nondiscrimination requirements do not apply. Tax act 2011 return The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. Tax act 2011 return For example, benefits provided under a medical reimbursement plan would meet the nondiscrimination requirements for an association, if the benefits meet the nondiscrimination requirements of section 105(h)(3) and 105(h)(4). Tax act 2011 return Excluded employees. Tax act 2011 return   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. Tax act 2011 return These include employees: Who have not completed 3 years of service, Who have not attained age 21, Who are seasonal or less than half-time employees, Who are not in the plan and who are included in a unit of employees covered by a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining, or Who are nonresident aliens and who receive no earned income from the employer that has United States source income. Tax act 2011 return Highly compensated individual. Tax act 2011 return   A highly compensated individual is one who: Owned 5 percent or more of the employer at any time during the current year or the preceding year, Received more than $115,000 in compensation from the employer for the preceding year (the amount is annualized for inflation. Tax act 2011 return Go to IRS. Tax act 2011 return gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. Tax act 2011 return However, the employer can choose not to have (3) apply. Tax act 2011 return Aggregation rules. Tax act 2011 return   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. Tax act 2011 return Employees of controlled groups of corporations, trades, or businesses under common control, or members of an affiliated service group, are treated as employees of a single employer. Tax act 2011 return Leased employees are treated as employees of the recipient. Tax act 2011 return One employee. Tax act 2011 return   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). Tax act 2011 return Supplemental Unemployment Benefit Trusts (501(c)(17)) A trust or trusts forming part of a written plan (established and maintained by an employer, his or her employees, or both) providing solely for the payment of supplemental unemployment compensation benefits must file the application for recognition of exemption on Form 1024. Tax act 2011 return The trust must be a valid, existing trust under local law and must be evidenced by an executed document. Tax act 2011 return A conformed copy of the plan of which the trust is a part should be attached to the application. Tax act 2011 return To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Tax act 2011 return Note. Tax act 2011 return Under section 4976, the reversion of funds from a section 501(c)(17) organization to the employer who created the supplemental unemployment benefit trust may subject the employer to a 100% penalty excise tax on the amount of the reversion. Tax act 2011 return Notice requirement. Tax act 2011 return   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Tax act 2011 return The organization gives notice by filing Form 1024. Tax act 2011 return If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before such notice is given. Tax act 2011 return An extension of time for filing the notice is granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Tax act 2011 return Types of payments. Tax act 2011 return   You must show that the supplemental unemployment compensation benefits will be benefits paid to an employee because of the employee's involuntary separation from employment (whether or not the separation is temporary) resulting directly from a reduction-in-force, discontinuance of a plant or operation, or other similar conditions. Tax act 2011 return In addition, sickness and accident benefits (but not vacation, retirement, or death benefits) may be included in the plan if these are subordinate to the unemployment compensation benefits. Tax act 2011 return Diversion of funds. Tax act 2011 return   It must be impossible under the plan (at any time before the satisfaction of all liabilities with respect to employees under the plan) to use or to divert any of the corpus or income of the trust to any purpose other than the payment of supplemental unemployment compensation benefits (or sickness or accident benefits to the extent just explained). Tax act 2011 return Discrimination in benefits. Tax act 2011 return   Neither the terms of the plan nor the actual payment of benefits can be discriminatory in favor of the company's officers, stockholders, supervisors, or highly paid employees. Tax act 2011 return However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. Tax act 2011 return Prohibited transactions and exemption. Tax act 2011 return   If your organization is a supplemental unemployment benefit trust and has received a denial of exemption because it engaged in a prohibited transaction, as defined by section 503(b), it can file a claim for exemption in any tax year following the tax year in which the notice of denial was issued. Tax act 2011 return It must file the claim on Form 1024. Tax act 2011 return The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. Tax act 2011 return An authorized principal officer of your organization must make this declaration under the penalties of perjury. Tax act 2011 return   If your organization has satisfied all requirements as a supplemental unemployment benefit trust described in section 501(c)(17), it will be notified in writing that it has been recognized as exempt. Tax act 2011 return However, the organization will be exempt only for those tax years after the tax year in which the claim for exemption (Form 1024) is filed. Tax act 2011 return Tax year in this case means the established annual accounting period of the organization or, if the organization has not established an annual accounting period, the calendar year. Tax act 2011 return For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. Tax act 2011 return 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations Each of the following organizations apply for recognition of exemption from federal income tax by filing Form 1024. Tax act 2011 return Benevolent life insurance associations of a purely local character and like organizations. Tax act 2011 return Mutual ditch or irrigation companies and like organizations. Tax act 2011 return Mutual or cooperative telephone companies and like organizations. Tax act 2011 return A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. Tax act 2011 return The information to be provided upon application by each of these organizations is described in this section. Tax act 2011 return For information as to the procedures to follow in applying for exemption, see chapter 1. Tax act 2011 return General requirements. Tax act 2011 return   These organizations must use their income solely to cover losses and expenses, with any excess being returned to members or retained to cover future losses and expenses. Tax act 2011 return They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. Tax act 2011 return Mutual character. Tax act 2011 return   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. Tax act 2011 return They are associations of persons or organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. Tax act 2011 return To maintain the mutual characteristic of democratic ownership and control, they must be so organized and operated that their members have the right to choose the management, to receive services at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. Tax act 2011 return   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. Tax act 2011 return Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. Tax act 2011 return The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. Tax act 2011 return Membership. Tax act 2011 return   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. Tax act 2011 return In a stock company, the stockholders are members. Tax act 2011 return However, a mutual life insurance organization cannot have policyholders other than its members. Tax act 2011 return Losses and expenses. Tax act 2011 return   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. Tax act 2011 return Any excess income not retained in reasonable reserves for future losses and expenses belongs to members in proportion to their patronage or business done with the organization. Tax act 2011 return If such patronage refunds are retained in reasonable amounts for purposes of expanding and improving facilities, retiring capital indebtedness, acquiring other assets, and unexpected expenses, the organization must maintain records sufficient to reflect the equity of each member in the assets acquired with the funds. Tax act 2011 return Distributions of proceeds. Tax act 2011 return   The cooperative may distribute the unexpended balance of collections or assessments remaining on hand at the end of the year to members or patrons prorated on the basis of their patronage or business done with the cooperative. Tax act 2011 return Such distribution represents a refund in the costs of services rendered to the member. Tax act 2011 return The 85% Requirement All of the organizations listed above must submit evidence with their application that they receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses. Tax act 2011 return Nevertheless, certain items of income are excluded from the computation of the 85% requirement if the organization is a mutual or cooperative telephone or electric company. Tax act 2011 return Mutual or cooperative telephone company. Tax act 2011 return   A mutual or cooperative telephone company will exclude from the computation of the 85% requirement any income received or accrued from: A nonmember telephone company for the performance of communication services involving the completion of long distance calls to, from, or between members of the mutual or cooperative telephone company, Qualified pole rentals, The sale of display listings in a directory furnished to its members, or The prepayment of a loan created in 1987, 1988, or 1989, under section 306A, 306B, or 311 of the Rural Electrification Act of 1936. Tax act 2011 return Mutual or cooperative electric company. Tax act 2011 return   A mutual or cooperative electric company will exclude from the computation of the 85% requirement any income received or accrued from: Qualified pole rentals, Any provision or sale of electric energy transmission services or ancillary service if the services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by the Federal Energy Regulatory Commission (FERC) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member), The provision or sale of electric energy distribution services or ancillary services if the services are provided on a nondiscriminatory open-access basis to distribute electric energy not owned by the mutual or electric cooperative company: To end-users who are served by distribution facilities not owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), or Generated by a generation facility not owned or leased by the company or any of its members and which is directly connected to distribution facilities owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), Any nuclear decommissioning transaction, or Any asset exchange or conversion transaction. Tax act 2011 return   An electric cooperative's sale of excess fuel at cost in the year of purchase is not income for purposes of determining compliance with the 85% requirement. Tax act 2011 return Qualified pole rental. Tax act 2011 return   The term qualified pole rental means any rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that are used by the company in providing telephone or electric services to its members, and Pursuant to the rental to support one or more wires (in addition to wires described in (1)) for use in connection with the transmission by wire of electricity or of telephone or other communications. Tax act 2011 return   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). Tax act 2011 return The 85% requirement is applied on the basis of an annual accounting period. Tax act 2011 return Failure of an organization to meet the requirement in a particular year precludes exemption for that year, but has no effect upon exemption for years in which the 85% requirement is met. Tax act 2011 return Gain from the sale or conversion of the organization's property is not considered an amount received from members in determining whether the organization's income consists of amounts collected from members. Tax act 2011 return Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. Tax act 2011 return Example. Tax act 2011 return   The books of an organization reflect the following for the calendar year. Tax act 2011 return Collections from members $2,400 Short-term capital gains 600 Short-term capital losses 400 Other income None Gross income ($2,400 + $600 =$3000) 100% Collected from members ($2,400) 80%   Since amounts collected from members do not constitute at least 85% of gross income, the organization is not entitled to exemption from federal income tax for the year. Tax act 2011 return   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. Tax act 2011 return   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. Tax act 2011 return   If the 85% test is not met, your organization, if classifiable under this section, will not qualify for exemption as any other type of organization described in this publication. Tax act 2011 return Tax treatment of donations. Tax act 2011 return   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. Tax act 2011 return Local Life Insurance Associations A benevolent life insurance association or an organization seeking recognition of exemption on grounds of similarity to a benevolent life insurance association must submit evidence upon applying for recognition of exemption that it will be of a purely local character, that its excess funds will be refunded to members or retained in reasonable reserves to meet future losses and expenses, and that it meets the 85% income requirement. Tax act 2011 return If an organization issues policies for stipulated cash premiums, or if it requires advance deposits to cover the cost of the insurance and maintains investments from which more than 15% of its income is derived, it will not be entitled to exemption. Tax act 2011 return To establish that your organization is of a purely local character, it should show that its activities will be confined to a particular community, place, or district irrespective of political subdivisions. Tax act 2011 return If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. Tax act 2011 return A benevolent life insurance association that does not terminate membership when a member moves from the local area in which the association operates will qualify for exemption if it meets the other requirements. Tax act 2011 return A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. Tax act 2011 return Organizations similar to local benevolent life insurance companies. Tax act 2011 return   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. Tax act 2011 return However, an organization that pays only sick, accident, or health benefits, but not life insurance benefits, is not an organization similar to a benevolent life insurance association and should not apply for recognition of exemption as described in this section. Tax act 2011 return Burial and funeral benefit insurance organization. Tax act 2011 return   This type of organization can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. Tax act 2011 return An organization that provides its benefits in the form of supplies and service is not a life insurance company. Tax act 2011 return Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. Tax act 2011 return Mutual or Cooperative Associations Mutual ditch or irrigation companies, mutual or cooperative telephone companies, and like organizations need not establish that they are of a purely local character. Tax act 2011 return They can serve noncontiguous areas. Tax act 2011 return Like organization. Tax act 2011 return   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. Tax act 2011 return Examples include the following: cooperatives that provide protection of river banks to prevent erosion, water and sewer services, cable television, satellite, television, cellular phone services, two-way radio service, or natural gas services. Tax act 2011 return 501(c)(13) - Cemetery Companies If your organization wishes to obtain recognition of exemption from federal income tax as a cemetery company or a corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, it must file an application on Form 1024. Tax act 2011 return For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. Tax act 2011 return A nonprofit mutual cemetery company that seeks recognition of exemption should submit evidence with its application that it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. Tax act 2011 return A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. Tax act 2011 return The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements of section 501(c)(13) are met. Tax act 2011 return If your organization is a nonprofit corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, you should show that it is not permitted by its charter to engage in any business not necessarily incident to that purpose. Tax act 2011 return Operating a mortuary is not permitted. Tax act 2011 return However, selling monuments, markers, vaults, and flowers solely for use in the cemetery is permitted if the profits from these sales are used to maintain the cemetery as a whole. Tax act 2011 return How income can be used. Tax act 2011 return   You should show that your organization's earnings are or will be used only in one or more of the following ways. Tax act 2011 return To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. Tax act 2011 return To buy cemetery property. Tax act 2011 return To create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. Tax act 2011 return No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. Tax act 2011 return Ordinary and necessary expenses in connection with the operation, management, maintenance, and improvement of the cemetery are permitted, as are reasonable fees for the services of a manager. Tax act 2011 return Buying cemetery property. Tax act 2011 return   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. Tax act 2011 return You must show the method used to finance the purchase of the cemetery property and that the purchase price of the land at the time of its sale to the cemetery was not unreasonable. Tax act 2011 return   Except for holders of preferred stock (discussed later), no person can have any interest in the net earnings of a tax-exempt cemetery company or crematorium. Tax act 2011 return Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not