Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

1040 Ez Tax Form 2011

2012 Amended Tax Return1040a Form To Print2011 Irs 1040ez Form2012 Income Tax Forms 1040ezHow To File Taxes If Self EmployedAmending Taxes After FilingI Need To File My 2012 Tax ReturnTax Forms2010 Income Tax TableFree Site To File State TaxesHow To File Late Tax Returns1040 Ez Tax Return FormFederal 1040x FormState Tax Return1040ez Online FilingHow To File 2011 Tax Return In 20131040ez Tax TableHr Block Free FilingHow Do I File 2011 Taxes OnlineIncome Tax Preparation FeesState Tax Forms And InstructionsIrs 1040ez Form 20112012 Income Tax Form 1040I Need A 1040x Form2007 Tax Software Free DownloadUs Government Form 1040xE File State Taxes1040x Electronic FilingFile My Taxes For 2012What Is An Amended Tax ReturnHow To File Tax ReturnTaxact OnlineWhere Do I File My State Taxes For FreeFree E File Tax ExtensionHr Block Free EditionCan I File My 2012 Taxes With My 2013 TaxesTax Extension OnlineFile Taxes Online Free Federal And StateIrs Amended Return FormHow To File Taxes Online

1040 Ez Tax Form 2011

1040 ez tax form 2011 1. 1040 ez tax form 2011   Bona Fide Residence Table of Contents Presence TestDays of Presence in the United States or Relevant Possession Significant Connection Tax HomeExceptions Closer ConnectionException for Year of Move Special Rules in the Year of a MoveYear of Moving to a Possession Year of Moving From a Possession Reporting a Change in Bona Fide ResidenceWho Must File Penalty for Not Filing Form 8898 In order to qualify for certain tax benefits (see chapter 3), you must be a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI for the entire tax year. 1040 ez tax form 2011 Generally, you are a bona fide resident of one of these possessions (the relevant possession) if, during the tax year, you: Meet the presence test, Do not have a tax home outside the relevant possession, and Do not have a closer connection to the United States or to a foreign country than to the relevant possession. 1040 ez tax form 2011 Special rule for members of the U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 Armed Forces. 1040 ez tax form 2011   If you are a member of the U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 Armed Forces who qualified as a bona fide resident of the relevant possession in an earlier tax year, your absence from that possession during the current tax year in compliance with military orders will not affect your status as a bona fide resident. 1040 ez tax form 2011 Likewise, being in a possession solely in compliance with military orders will not qualify you for bona fide residency. 1040 ez tax form 2011 Also see the special income source rule for members of the U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 Armed Forces in chapter 2, under Compensation for Labor or Personal Services . 1040 ez tax form 2011 Special rule for civilian spouse of active duty member of the U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 Armed Forces. 1040 ez tax form 2011   If you are the civilian spouse of an active duty servicemember, under Military Spouses Residency Relief Act (MSRRA) you can choose to keep your prior residence or domicile for tax purposes (tax residence) when accompanying the servicemember spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession. 1040 ez tax form 2011 Before relocating, you and your spouse must have the same tax residence. 1040 ez tax form 2011 If you are a civilian spouse and choose to keep your prior tax residence after such relocation, the source of income for services performed (for example, wages, salaries, tips, or self-employment) by you is considered to be (the jurisdiction of) the prior tax residence. 1040 ez tax form 2011 As a result, the amount of income tax withholding (from Form(s) W-2, Wage and Tax Statement) that you are able to claim on your federal return, as well as the need to file a state or U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession return, may be affected. 1040 ez tax form 2011 For more information, consult with state, local, or U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession tax authorities regarding your tax obligations under MSRRA. 1040 ez tax form 2011 Presence Test If you are a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen or resident alien, you will satisfy the presence test for the entire tax year if you meet one of the following conditions. 1040 ez tax form 2011 You were present in the relevant possession for at least 183 days during the tax year. 1040 ez tax form 2011 You were present in the relevant possession for at least 549 days during the 3-year period that includes the current tax year and the 2 immediately preceding tax years. 1040 ez tax form 2011 During each year of the 3-year period, you must be present in the relevant possession for at least 60 days. 1040 ez tax form 2011 You were present in the United States for no more than 90 days during the tax year. 1040 ez tax form 2011 You had earned income in the United States of no more than a total of $3,000 and were present for more days in the relevant possession than in the United States during the tax year. 1040 ez tax form 2011 Earned income is pay for personal services performed, such as wages, salaries, or professional fees. 1040 ez tax form 2011 You had no significant connection to the United States during the tax year. 1040 ez tax form 2011 Special rule for nonresident aliens. 1040 ez tax form 2011   Conditions (1) through (5) above do not apply to nonresident aliens of the United States. 1040 ez tax form 2011 Instead, nonresident aliens must meet the substantial presence test discussed in chapter 1 of Publication 519. 1040 ez tax form 2011 In that discussion, substitute the name of the possession for “United States” and “U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 ” wherever they appear. 1040 ez tax form 2011 Disregard the discussion in that chapter about a Closer Connection to a Foreign Country. 1040 ez tax form 2011 Days of Presence in the United States or Relevant Possession Generally, you are treated as being present in the United States or in the relevant possession on any day that you are physically present in that location at any time during the day. 1040 ez tax form 2011 Days of presence in a possession. 1040 ez tax form 2011   You are considered to be present in the relevant possession on any of the following days. 1040 ez tax form 2011 Any day you are physically present in that possession at any time during the day. 1040 ez tax form 2011 Any day you are outside of the relevant possession in order to receive, or to accompany any of the following family members to receive, qualifying medical treatment (see Qualifying Medical Treatment , later). 1040 ez tax form 2011 Your parent. 1040 ez tax form 2011 Your spouse. 1040 ez tax form 2011 Your child, who is your son, daughter, stepson, or stepdaughter. 1040 ez tax form 2011 This includes an adopted child or child lawfully placed with you for legal adoption. 1040 ez tax form 2011 This also includes a foster child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. 1040 ez tax form 2011 Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. 1040 ez tax form 2011   If, during a single day, you are physically present: In the United States and in the relevant possession, that day is considered a day of presence in the relevant possession; or In two possessions, that day is considered a day of presence in the possession where your tax home is located (see Tax Home , later). 1040 ez tax form 2011 Days of presence in the United States. 1040 ez tax form 2011   You are considered to be present in the United States on any day that you are physically present in the United States at any time during the day. 1040 ez tax form 2011 However, do not count the following days as days of presence in the United States. 1040 ez tax form 2011 Any day you are temporarily present in the United States in order to receive, or to accompany a parent, spouse, or child who is receiving, qualifying medical treatment. 1040 ez tax form 2011 “Child” is defined under item 2c earlier. 1040 ez tax form 2011 “Qualifying medical treatment” is defined later. 1040 ez tax form 2011 Any day you are temporarily present in the United States because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. 1040 ez tax form 2011 Any day you are in the United States for less than 24 hours when you are traveling between two places outside the United States. 1040 ez tax form 2011 Any day you are temporarily present in the United States as a professional athlete to compete in a charitable sports event (defined later). 1040 ez tax form 2011 Any day you are temporarily in the United States as a student (defined later). 1040 ez tax form 2011 Any day you are in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). 1040 ez tax form 2011 Qualifying Medical Treatment Such treatment is generally provided by (or under the supervision of) a physician for an illness, injury, impairment, or physical or mental condition. 1040 ez tax form 2011 The treatment generally involves: Any period of inpatient care that requires an overnight stay in a hospital or hospice, and any period immediately before or after that inpatient care to the extent it is medically necessary, or Any temporary period of inpatient care in a residential medical care facility for medically necessary rehabilitation services. 1040 ez tax form 2011 With respect to each qualifying medical treatment, you must prepare (or obtain) and maintain documentation supporting your claim that such treatment meets the criteria to be considered days of presence in the relevant possession. 1040 ez tax form 2011 You must be able to produce this documentation within 30 days if requested by the IRS or tax administrator for the relevant possession. 1040 ez tax form 2011 You must keep the following documentation. 1040 ez tax form 2011 Records that provide: The patient's name and relationship to you (if the medical treatment is provided to a person you accompany); The name and address of the hospital, hospice, or residential medical care facility where the medical treatment was provided; The name, address, and telephone number of the physician who provided the medical treatment; The date(s) on which the medical treatment was provided; and Receipt(s) of payment for the medical treatment. 1040 ez tax form 2011 Signed certification by the providing or supervising physician that the medical treatment met the requirements for being qualified medical treatment, and setting forth: The patient's name, A reasonably detailed description of the medical treatment provided by (or under the supervision of) the physician, The dates on which the medical treatment was provided, and The medical facts that support the physician's certification and determination that the treatment was medically necessary. 1040 ez tax form 2011 Charitable Sports Event A charitable sports event is one that meets all of the following conditions. 1040 ez tax form 2011 The main purpose is to benefit a qualified charitable organization. 1040 ez tax form 2011 The entire net proceeds go to charity. 1040 ez tax form 2011 Volunteers perform substantially all the work. 1040 ez tax form 2011 In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in the charitable sports event. 1040 ez tax form 2011 You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. 1040 ez tax form 2011 Student To qualify as a student, you must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by a school described in (1) above or by a state, county, or local government agency. 1040 ez tax form 2011 The 5 calendar months do not have to be consecutive. 1040 ez tax form 2011 Full-time student. 1040 ez tax form 2011   A full-time student is a person who is enrolled for the number of hours or courses the school considers to be full-time attendance. 1040 ez tax form 2011 However, school attendance exclusively at night is not considered full-time attendance. 1040 ez tax form 2011 School. 1040 ez tax form 2011   The term “school” includes elementary schools, middle schools, junior and senior high schools, colleges, universities, and technical, trade, and mechanical schools. 1040 ez tax form 2011 It does not include on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. 1040 ez tax form 2011 Significant Connection One way in which you can meet the presence test is to have no significant connection to the United States during the tax year. 1040 ez tax form 2011 This section looks at the factors that determine if a significant connection exists. 1040 ez tax form 2011 You are treated as having a significant connection to the United States if you: Have a permanent home in the United States, Are currently registered to vote in any political subdivision of the United States, or Have a spouse or child (see item 2c under Days of presence in a possession , earlier) who is under age 18 whose main home is in the United States, other than: A child who is in the United States because he or she is the child of divorced or legally separated parents and is living with a custodial parent under a custodial decree or multiple support agreement, or A child who is in the United States as a student. 1040 ez tax form 2011 For the purpose of determining if you have a significant connection to the United States, the term “spouse” does not include a spouse from whom you are legally separated under a decree of divorce or separate maintenance. 1040 ez tax form 2011 Permanent home. 1040 ez tax form 2011   A permanent home generally includes an accommodation such as a house, an apartment, or a furnished room that is either owned or rented by you or your spouse. 1040 ez tax form 2011 The dwelling unit must be available at all times, continuously, not only for short stays. 1040 ez tax form 2011 Exception for rental property. 1040 ez tax form 2011   If you or your spouse own the dwelling unit and at any time during the tax year it is rented to someone else at fair rental value, it will be considered your permanent home only if you or your spouse use that property for personal purposes for more than the greater of: 14 days, or 10% of the number of days during that tax year that the property is rented to others at a fair rental value. 1040 ez tax form 2011   You are treated as using rental property for personal purposes on any day the property is not being rented to someone else at fair rental value for the entire day. 1040 ez tax form 2011   A day of personal use of a dwelling unit is also any day that the unit is used by any of the following persons. 1040 ez tax form 2011 You or any other person who has an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement. 1040 ez tax form 2011 A member of your family or a member of the family of any other person who has an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. 1040 ez tax form 2011 Family includes only brothers and sisters, half-brothers and half-sisters, spouses, ancestors (parents, grandparents, etc. 1040 ez tax form 2011 ), and lineal descendants (children, grandchildren, etc. 1040 ez tax form 2011 ). 1040 ez tax form 2011 Anyone under an arrangement that lets you use some other dwelling unit. 1040 ez tax form 2011 Anyone at less than a fair rental price. 1040 ez tax form 2011   However, any day you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. 1040 ez tax form 2011 Whether your property is used mainly for this purpose is determined in light of all the facts and circumstances, such as: The amount of time you devote to repair and maintenance work, How often during the tax year you perform repair and maintenance work on this property, and The presence and activities of companions. 1040 ez tax form 2011   See Publication 527, Residential Rental Property, for more information about personal use of a dwelling unit. 1040 ez tax form 2011 Example—significant connection. 1040 ez tax form 2011 Ann Green, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, is a sales representative for a company based in Guam. 1040 ez tax form 2011 Ann lives with her spouse and young children in their house in Guam, where she is also registered to vote. 1040 ez tax form 2011 Her business travel requires her to spend 120 days in the United States and another 120 days in foreign countries. 1040 ez tax form 2011 When traveling on business, Ann generally stays at hotels but sometimes stays with her brother, who lives in the United States. 1040 ez tax form 2011 Ann's stays are always of short duration and she asks her brother's permission to stay with him. 1040 ez tax form 2011 Her brother's house is not her permanent home, nor does she have any other accommodations in the United States that would be considered her permanent home. 1040 ez tax form 2011 Ann satisfies the presence test because she has no significant connection to the United States. 1040 ez tax form 2011 Example—presence test. 1040 ez tax form 2011 Eric and Wanda Brown live for part of the year in a condominium, which they own, in the CNMI. 1040 ez tax form 2011 They also own a house in Maine where they live for 120 days every year to be near their grown children and grandchildren. 1040 ez tax form 2011 The Browns are retired and their only income is from pension payments, dividends, interest, and social security benefits. 1040 ez tax form 2011 In 2013, they spent only 175 days in the CNMI because of a 70-day vacation to Europe and Asia. 1040 ez tax form 2011 Thus, in 2013, the Browns were not present in the CNMI for at least 183 days, were present in the United States for more than 90 days, and had a significant connection to the United States because of their permanent home. 1040 ez tax form 2011 However, the Browns still satisfied the presence test with respect to the CNMI because they had no earned income in the United States and were physically present for more days in the CNMI than in the United States. 1040 ez tax form 2011 Tax Home You will have met the tax home test if you did not have a tax home outside the relevant possession during any part of the tax year. 1040 ez tax form 2011 Your tax home is your regular or main place of business, employment, or post of duty regardless of where you maintain your family home. 1040 ez tax form 2011 If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. 1040 ez tax form 2011 If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. 1040 ez tax form 2011 Exceptions There are some special rules regarding tax home that provide exceptions to the general rule stated above. 1040 ez tax form 2011 Students and Government Officials Disregard the following days when determining whether you have a tax home outside the relevant possession. 1040 ez tax form 2011 Days you were temporarily in the United States as a student (see Student under Days of Presence in the United States or Relevant Possession, earlier). 1040 ez tax form 2011 Days you were in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). 1040 ez tax form 2011 Seafarers You will not be considered to have a tax home outside the relevant possession solely because you are employed on a ship or other seafaring vessel that is predominantly used in local and international waters. 1040 ez tax form 2011 For this purpose, a vessel is considered to be predominantly used in local and international waters if, during the tax year, the total amount of time it is used in international waters and in the waters within 3 miles of the relevant possession exceeds the total amount of time it is used in the territorial waters of the United States, another possession, or any foreign country. 1040 ez tax form 2011 Example. 1040 ez tax form 2011 In 2013, Sean Silverman, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, was employed by a fishery and spent 250 days at sea on a fishing vessel. 1040 ez tax form 2011 When not at sea, Sean lived with his spouse at a house they own in American Samoa. 1040 ez tax form 2011 The fishing vessel on which Sean works departs and arrives at various ports in American Samoa, other possessions, and foreign countries, but was in international or American Samoa's local waters for 225 days. 1040 ez tax form 2011 For purposes of determining bona fide residency of American Samoa, Sean will not be considered to have a tax home outside that possession solely because of his employment on board the fishing vessel. 1040 ez tax form 2011 Year of Move If you are moving to or from a possession during the year, you may still be able to meet the tax home test for that year. 1040 ez tax form 2011 See Special Rules in the Year of a Move , later in this chapter. 1040 ez tax form 2011 Closer Connection You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to the relevant U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession. 1040 ez tax form 2011 You will be considered to have a closer connection to a possession than to the United States or to a foreign country if you have maintained more significant contacts with the possession(s) than with the United States or foreign country. 1040 ez tax form 2011 In determining if you have maintained more significant contacts with the relevant possession, the facts and circumstances to be considered include, but are not limited to, the following. 1040 ez tax form 2011 The location of your permanent home. 1040 ez tax form 2011 The location of your family. 1040 ez tax form 2011 The location of personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family. 1040 ez tax form 2011 The location of social, political, cultural, professional, or religious organizations with which you have a current relationship. 1040 ez tax form 2011 The location where you conduct your routine personal banking activities. 1040 ez tax form 2011 The location where you conduct business activities (other than those that go into determining your tax home). 1040 ez tax form 2011 The location of the jurisdiction in which you hold a driver's license. 1040 ez tax form 2011 The location of the jurisdiction in which you vote. 1040 ez tax form 2011 The location of charitable organizations to which you contribute. 1040 ez tax form 2011 The country of residence you designate on forms and documents. 1040 ez tax form 2011 The types of official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification. 1040 ez tax form 2011 Your connections to the relevant possession will be compared to the total of your connections with the United States and foreign countries. 1040 ez tax form 2011 Your answers to the questions on Form 8898, Part III, will help establish the jurisdiction to which you have a closer connection. 1040 ez tax form 2011 Example—closer connection to the United States. 1040 ez tax form 2011 Marcos Reyes, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, moved to Puerto Rico in 2013 to start an investment consulting and venture capital business. 1040 ez tax form 2011 His spouse and two teenage children remained in California to allow the children to complete high school. 1040 ez tax form 2011 He traveled back to the United States regularly to see his spouse and children, to engage in business activities, and to take vacations. 1040 ez tax form 2011 Marcos had an apartment available for his full-time use in Puerto Rico, but remained a joint owner of the residence in California where his spouse and children lived. 1040 ez tax form 2011 Marcos and his family had automobiles and personal belongings such as furniture, clothing, and jewelry located at both residences. 1040 ez tax form 2011 Although Marcos was a member of the Puerto Rico Chamber of Commerce, he also belonged to and had current relationships with social, political, cultural, and religious organizations in California. 1040 ez tax form 2011 Marcos received mail in California, including bank and brokerage statements and credit card bills. 1040 ez tax form 2011 He conducted his personal banking activities in California. 1040 ez tax form 2011 He held a California driver's license and was also registered to vote there. 1040 ez tax form 2011 Based on all of the particular facts and circumstances pertaining to Marcos, he was not a bona fide resident of Puerto Rico in 2013 because he had a closer connection to the United States than to Puerto Rico. 1040 ez tax form 2011 Closer connection to another possession. 1040 ez tax form 2011   Generally, possessions are not treated as foreign countries. 1040 ez tax form 2011 Therefore, a closer connection to a possession other than the relevant possession will not be treated as a closer connection to a foreign country. 1040 ez tax form 2011 Example—tax home and closer connection to possession. 1040 ez tax form 2011 Pearl Blackmon, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, is a permanent employee of a hotel in Guam, but works only during the tourist season. 1040 ez tax form 2011 For the remainder of each year, Pearl lives with her spouse and children in the CNMI, where she has no outside employment. 1040 ez tax form 2011 Most of Pearl's personal belongings, including her automobile, are located in the CNMI. 1040 ez tax form 2011 She is registered to vote in, and has a driver's license issued by, the CNMI. 1040 ez tax form 2011 She does her personal banking in the CNMI and routinely lists her CNMI address as her permanent address on forms and documents. 1040 ez tax form 2011 Pearl satisfies the presence test with respect to both Guam and the CNMI. 1040 ez tax form 2011 She satisfies the tax home test with respect to Guam, because her regular place of business is in Guam. 1040 ez tax form 2011 Pearl satisfies the closer connection test with respect to both Guam and the CNMI, because she does not have a closer connection to the United States or to any foreign country. 1040 ez tax form 2011 Pearl is considered a bona fide resident of Guam, the location of her tax home. 1040 ez tax form 2011 Exception for Year of Move If you are moving to or from a possession during the year, you may still be able to meet the closer connection test for that year. 1040 ez tax form 2011 See Special Rules in the Year of a Move , next. 1040 ez tax form 2011 Special Rules in the Year of a Move If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year. 1040 ez tax form 2011 Year of Moving to a Possession You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following. 1040 ez tax form 2011 You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move. 1040 ez tax form 2011 In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year. 1040 ez tax form 2011 You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move. 1040 ez tax form 2011 Example. 1040 ez tax form 2011 Dwight Wood, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, files returns on a calendar year basis. 1040 ez tax form 2011 He lived in the United States from January 2007 through May 2013. 1040 ez tax form 2011 In June 2013 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. 1040 ez tax form 2011 From July 1 through December 31, 2013 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. 1040 ez tax form 2011 If he is a bona fide resident of the USVI during all of 2014 through 2016, he will satisfy the tax home and closer connection tests for 2013. 1040 ez tax form 2011 If Dwight also satisfies the presence test in 2013, he will be considered a bona fide resident of the USVI for the entire 2013 tax year. 1040 ez tax form 2011 Year of Moving From a Possession In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following. 1040 ez tax form 2011 You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence. 1040 ez tax form 2011 In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year. 1040 ez tax form 2011 You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move. 1040 ez tax form 2011 Example. 1040 ez tax form 2011 Jean Aspen, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, files returns on a calendar year basis. 1040 ez tax form 2011 From January 2010 through December 2012, Jean was a bona fide resident of American Samoa. 1040 ez tax form 2011 Jean continued to live there until September 6, 2013, when she accepted new employment and moved to Hawaii. 1040 ez tax form 2011 Jean's principal place of business from January 1 through September 5, 2013 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. 1040 ez tax form 2011 If Jean continues to live and work in Hawaii for the rest of 2013 and throughout years 2014 through 2016, she will satisfy the tax home and closer connection tests for 2013 with respect to American Samoa. 1040 ez tax form 2011 If Jean also satisfies the presence test in 2013, she will be considered a bona fide resident for the entire 2013 tax year. 1040 ez tax form 2011 Puerto Rico You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you: Are a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move, Cease to be a bona fide resident of Puerto Rico during the tax year, Cease to have a tax home in Puerto Rico during the tax year, and Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico. 1040 ez tax form 2011 Example. 1040 ez tax form 2011 Randy White, a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen, files returns on a calendar year basis. 1040 ez tax form 2011 For all of 2011 and 2012, Randy was a bona fide resident of Puerto Rico. 1040 ez tax form 2011 From January through April 2013, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. 1040 ez tax form 2011 On May 5, 2013, Randy moved and changed his tax home to Nevada. 1040 ez tax form 2011 Later that year he established a closer connection to the United States than to Puerto Rico. 1040 ez tax form 2011 Randy did not satisfy the presence test for 2013 with respect to Puerto Rico, nor the tax home or closer connection tests. 1040 ez tax form 2011 However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2013, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2013. 1040 ez tax form 2011 Reporting a Change in Bona Fide Residence If you became or ceased to be a bona fide resident of a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession, you may need to file Form 8898. 1040 ez tax form 2011 This applies to the U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possessions of American Samoa, the CNMI, Guam, Puerto Rico, and the USVI. 1040 ez tax form 2011 Who Must File You must file Form 8898 for the tax year in which you meet both of the following conditions. 1040 ez tax form 2011 Your worldwide gross income (defined below) in that tax year is more than $75,000. 1040 ez tax form 2011 You meet one of the following. 1040 ez tax form 2011 You take a position for U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 tax purposes that you became a bona fide resident of a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession after a tax year for which you filed a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 income tax return as a citizen or resident alien of the United States but not as a bona fide resident of the possession. 1040 ez tax form 2011 You are a citizen or resident alien of the United States who takes the position for U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 tax purposes that you ceased to be a bona fide resident of a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 possession after a tax year for which you filed an income tax return (with the IRS, the possession tax authority, or both) as a bona fide resident of the possession. 1040 ez tax form 2011 You take the position for U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 tax purposes that you became a bona fide resident of Puerto Rico or American Samoa after a tax year for which you were required to file an income tax return as a bona fide resident of the CNMI, Guam, or the USVI. 1040 ez tax form 2011 Worldwide gross income. 1040 ez tax form 2011   Worldwide gross income means all income you received in the form of money, goods, property, and services, including any income from sources outside the United States (even if you can exclude part or all of it) and before any deductions, credits, or rebates. 1040 ez tax form 2011 Example. 1040 ez tax form 2011 You are a U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 citizen who moved to the CNMI in December 2012, but did not become a bona fide resident of that possession until the 2013 tax year. 1040 ez tax form 2011 You must file Form 8898 for the 2013 tax year if your worldwide gross income for that year was more than $75,000. 1040 ez tax form 2011 Penalty for Not Filing Form 8898 If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. 1040 ez tax form 2011 You may also owe this penalty if you do not include all the information required by the form or the form includes incorrect information. 1040 ez tax form 2011 In either case, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect. 1040 ez tax form 2011 This is in addition to any criminal penalty that may be imposed. 1040 ez tax form 2011 Prev  Up  Next   Home   More Online Publications
Español

U.S. Federal Government

Learn how the U.S. federal government is organized and search for departments and agencies by name or by branch.


Contact Federal Government Departments and Agencies

  • A-Z Index - If you know the name of the federal government department or agency you're looking for, get contact information through our A-Z index. 

Back to Top

How the U.S. Government Is Organized

The Constitution of the United States divides the federal government into three branches to ensure a central government in which no individual or group gains too much control:

  1. Legislative – Makes laws (Congress)
  2. Executive – Carries out laws (President, Vice President, Cabinet)
  3. Judicial – Evaluates laws (Supreme Court and Other Courts)

Each branch of government can change acts of the other branches as follows:

  • The president can veto laws passed by Congress.
  • Congress confirms or rejects the president's appointments and can remove the president from office in exceptional circumstances.
  • The justices of the Supreme Court, who can overturn unconstitutional laws, are appointed by the president and confirmed by the Senate.

The U.S. federal government seeks to act in the best interests of its citizens through this system of checks and balances.

Back to Top

Legislative Branch

The legislative branch enacts legislation, confirms or rejects presidential appointments, and has the authority to declare war.

This branch includes Congress (the Senate and House of Representatives) and several agencies that provide support services to Congress. American citizens have the right to vote for senators and representatives through free, confidential ballots.

  • Senate - There are two elected senators per state, totaling 100 senators. A senate term is six years and there's no limit to the number of terms an individual can serve.
  • House of Representatives - There are 435 elected representatives, which are divided among the 50 states in proportion to their total population. There are additional non-voting delegates who represent the District of Columbia and the territories. A representative serves a two-year term, and there's no limit to the number of terms an individual can serve.

Back to Top

Executive Branch

The executive branch carries out and enforces laws. It includes the president, vice president, the Cabinet, executive departments, independent agencies, and other boards, commissions, and committees.

American citizens have the right to vote for the president and vice president through free, confidential ballots.

Key roles of the executive branch include:

  • President - The president leads the country. He/she is the head of state, leader of the federal government, and commander-in-chief of the United States Armed Forces. The president serves a four-year term and can be elected no more than two times.
  • Vice President - The vice president supports the president. If the president is unable to serve, the vice president becomes president. He/she can serve an unlimited number of four-year terms.
  • The Cabinet - Cabinet members serve as advisors to the president. They include the vice president and the heads of executive departments. Cabinet members are nominated by the president and must be approved by the Senate (with at least 51 votes).

Back to Top

Judicial Branch

The judicial branch interprets the meaning of laws, applies laws to individual cases, and decides if laws violate the Constitution.

The judicial branch is comprised of the Supreme Court and other federal courts.

  • Supreme Court - The Supreme Court is the highest court in the United States. The justices of the Supreme Court are nominated by the president and must be approved by the Senate (with at least 51 votes). Congress decides the number of justices. Currently, there are nine. There is no fixed term for justices. They serve until their death, retirement, or removal in exceptional circumstances.
  • Other Federal Courts - The Constitution grants Congress the authority to establish other federal courts.

Back to Top

The 1040 Ez Tax Form 2011

1040 ez tax form 2011 4. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Line of business. 1040 ez tax form 2011 Examples. 1040 ez tax form 2011 Improvement of business conditions. 1040 ez tax form 2011 Exception for local legislation. 1040 ez tax form 2011 De minimis exception. 1040 ez tax form 2011 Grass roots lobbying. 1040 ez tax form 2011 501(c)(7) - Social and Recreation ClubsLimited membership. 1040 ez tax form 2011 Support. 1040 ez tax form 2011 Facilities open to public. 1040 ez tax form 2011 Gross receipts from nonmembership sources. 1040 ez tax form 2011 Gross receipts. 1040 ez tax form 2011 Nontraditional activities. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Losses and expenses. 1040 ez tax form 2011 Distributions of proceeds. 1040 ez tax form 2011 The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. 1040 ez tax form 2011 Perpetual care organization. 1040 ez tax form 2011 Care of individual plots. 1040 ez tax form 2011 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. 1040 ez tax form 2011 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. 1040 ez tax form 2011 Waiver of payment of income. 1040 ez tax form 2011 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). 1040 ez tax form 2011 Section 501(c)(3) organizations are covered in chapter 3 of this publication. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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). 1040 ez tax form 2011 The discussion that follows describes the information you must provide when applying. 1040 ez tax form 2011 For application procedures, see chapter 1. 1040 ez tax form 2011 To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. 1040 ez tax form 2011 In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. 1040 ez tax form 2011 If the organization provides an excess benefit to certain persons, an excise tax may be imposed. 1040 ez tax form 2011 See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. 1040 ez tax form 2011 Examples. 1040 ez tax form 2011   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. 1040 ez tax form 2011 Nonprofit operation. 1040 ez tax form 2011   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Social welfare. 1040 ez tax form 2011   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). 1040 ez tax form 2011   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. 1040 ez tax form 2011 It therefore does not qualify as a section 501(c)(4) organization. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Political activity. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 See the discussion in chapter 2 under Political Organization Income Tax Return . 1040 ez tax form 2011 Social or recreational activity. 1040 ez tax form 2011   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). 1040 ez tax form 2011 Retirement benefit program. 1040 ez tax form 2011   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. 1040 ez tax form 2011 It may qualify under another paragraph of section 501(c) depending on all the facts. 1040 ez tax form 2011   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). 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. 1040 ez tax form 2011 Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. 1040 ez tax form 2011 They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. 1040 ez tax form 2011 However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. 1040 ez tax form 2011 for more information. 1040 ez tax form 2011 For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. 1040 ez tax form 2011 gov. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Volunteer fire companies. 1040 ez tax form 2011   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. 1040 ez tax form 2011   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). 1040 ez tax form 2011 In this event, your organization should file Form 1023. 1040 ez tax form 2011 Homeowners' associations. 1040 ez tax form 2011   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. 1040 ez tax form 2011 The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. 1040 ez tax form 2011 Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. 1040 ez tax form 2011 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. 1040 ez tax form 2011   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. 1040 ez tax form 2011 It also must show that it does not engage in exterior maintenance of private homes. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Other organizations. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. 1040 ez tax form 2011 Submit any additional information that may be required, as described in this section. 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 In addition, no net earnings of the organization can inure to the benefit of any member. 1040 ez tax form 2011 Composition of membership. 1040 ez tax form 2011   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. 1040 ez tax form 2011 You must show in your application that your organization has the purposes described in the preceding paragraph. 1040 ez tax form 2011 These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. 1040 ez tax form 2011 Benefits to members. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. 1040 ez tax form 2011 gov. 1040 ez tax form 2011 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. 1040 ez tax form 2011 For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. 1040 ez tax form 2011 The term harvesting, in this case, includes fishing and related pursuits. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 The following list contains some examples of activities that show an agricultural or horticultural purpose. 1040 ez tax form 2011 Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. 1040 ez tax form 2011 Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Guarding the purity of a specific breed of livestock. 1040 ez tax form 2011 Encouraging improvements in the production of fish on privately owned fish farms. 1040 ez tax form 2011 Negotiating with processors for the price to be paid to members for their crops. 1040 ez tax form 2011 For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. 1040 ez tax form 2011 gov. 1040 ez tax form 2011 501(c)(6) - Business Leagues, etc. 1040 ez tax form 2011 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. 1040 ez tax form 2011 For a discussion of the procedure to follow, see chapter 1. 1040 ez tax form 2011 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). 1040 ez tax form 2011 In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. 1040 ez tax form 2011 It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Trade associations and professional associations are considered business leagues. 1040 ez tax form 2011 Chamber of commerce. 1040 ez tax form 2011   A chamber of commerce usually is composed of the merchants and traders of a city. 1040 ez tax form 2011 Board of trade. 1040 ez tax form 2011   A board of trade often consists of persons engaged in similar lines of business. 1040 ez tax form 2011 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. 1040 ez tax form 2011   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. 1040 ez tax form 2011 Real estate board. 1040 ez tax form 2011   A real estate board consists of members interested in improving the business conditions in the real estate field. 1040 ez tax form 2011 It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. 1040 ez tax form 2011 Professional football leagues. 1040 ez tax form 2011   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). 1040 ez tax form 2011 They are exempt whether or not they administer a pension fund for football players. 1040 ez tax form 2011 General purpose. 1040 ez tax form 2011   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. 1040 ez tax form 2011 It must be shown that the conditions of a particular trade or the interests of the community will be advanced. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Line of business. 1040 ez tax form 2011   This term generally refers either to an entire industry or to all components of an industry within a geographic area. 1040 ez tax form 2011 It does not include a group composed of businesses that market a particular brand within an industry. 1040 ez tax form 2011 Common business interest. 1040 ez tax form 2011   A common business interest of all members of the organization must be established by the application documents. 1040 ez tax form 2011 Examples. 1040 ez tax form 2011   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). 1040 ez tax form 2011 Improvement of business conditions. 1040 ez tax form 2011   Generally, this must be shown to be the purpose of the organization. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Stock or commodity exchange. 1040 ez tax form 2011   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). 1040 ez tax form 2011 Legislative activity. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Deduction not allowed for dues used for political or legislative activities. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Influencing legislation. 1040 ez tax form 2011 Participating or intervening in a political campaign for, or against, any candidate for public office. 1040 ez tax form 2011 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). 1040 ez tax form 2011 Communicating directly with certain executive branch officials to try to influence their official actions or positions. 1040 ez tax form 2011 See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. 1040 ez tax form 2011 Exception for local legislation. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 De minimis exception. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Grass roots lobbying. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. 1040 ez tax form 2011 They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. 1040 ez tax form 2011   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. 1040 ez tax form 2011 gov. 1040 ez tax form 2011 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. 1040 ez tax form 2011 In applying for recognition of exemption, you should submit the information described in this section. 1040 ez tax form 2011 Also see chapter 1 for the procedures to follow. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Discrimination prohibited. 1040 ez tax form 2011   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. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Private benefit prohibited. 1040 ez tax form 2011   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. 1040 ez tax form 2011 For purposes of this requirement, it is not necessary that net earnings be actually distributed. 1040 ez tax form 2011 Even undistributed earnings can benefit members. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Purposes. 1040 ez tax form 2011   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. 1040 ez tax form 2011 You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Limited membership. 1040 ez tax form 2011   The membership in a social club must be limited. 1040 ez tax form 2011 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. 1040 ez tax form 2011   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. 1040 ez tax form 2011 Corporate members of a club are not the kind of members contemplated by the law. 1040 ez tax form 2011 Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. 1040 ez tax form 2011 See Gross receipts from nonmembership sources , later. 1040 ez tax form 2011 Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Support. 1040 ez tax form 2011   In general, your club should be supported solely by membership fees, dues, and assessments. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Business activities. 1040 ez tax form 2011   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Facilities open to public. 1040 ez tax form 2011   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. 1040 ez tax form 2011 This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. 1040 ez tax form 2011 Gross receipts from nonmembership sources. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Gross receipts. 1040 ez tax form 2011   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. 1040 ez tax form 2011 These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. 1040 ez tax form 2011 Receipts do not include initiation fees and capital contributions. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Nontraditional activities. 1040 ez tax form 2011   Activities conducted by a social club need to further its exempt purposes. 1040 ez tax form 2011 Traditional business activities are those that further a social club's exempt purposes. 1040 ez tax form 2011 Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. 1040 ez tax form 2011 Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. 1040 ez tax form 2011 Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. 1040 ez tax form 2011 Fraternity foundations. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 , purposes. 1040 ez tax form 2011 The procedures to follow in applying for recognition of exemption are described in chapter 1. 1040 ez tax form 2011 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. 1040 ez tax form 2011 If so, your organization need not apply for individual recognition of exemption. 1040 ez tax form 2011 For more information, see Group Exemption Letter in chapter 1 of this publication. 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Lodge system. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Payment of benefits. 1040 ez tax form 2011   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. 1040 ez tax form 2011 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. 1040 ez tax form 2011   The benefits must be limited to members and their dependents. 1040 ez tax form 2011 If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. 1040 ez tax form 2011 Whole-life insurance. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Reinsurance pool. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. 1040 ez tax form 2011 S. 1040 ez tax form 2011 , 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. 1040 ez tax form 2011 The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Both the application form to file and the information to provide are discussed later under the section that describes your employee association. 1040 ez tax form 2011 Chapter 1 describes the procedures to follow in applying for exemption. 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. 1040 ez tax form 2011 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. 1040 ez tax form 2011 A local employees' association must apply for recognition of exemption by filing Form 1024. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Note. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Notice requirement. 1040 ez tax form 2011   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. 1040 ez tax form 2011 The organization gives notice by filing Form 1024. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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 . 1040 ez tax form 2011 Membership. 1040 ez tax form 2011   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. 1040 ez tax form 2011 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. 1040 ez tax form 2011   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. 1040 ez tax form 2011 For example, the owner of a business whose employees are members of the association can be a member. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Employees. 1040 ez tax form 2011   Employees include individuals who became entitled to membership because they are or were employees. 1040 ez tax form 2011 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. 1040 ez tax form 2011   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. 1040 ez tax form 2011 Conversely, membership is involuntary if the designation as a member is due to employee status. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Payment of benefits. 1040 ez tax form 2011   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. 1040 ez tax form 2011 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). 1040 ez tax form 2011 Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. 1040 ez tax form 2011 Nondiscrimination requirements. 1040 ez tax form 2011   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. 1040 ez tax form 2011 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. 1040 ez tax form 2011   A plan meets the nondiscrimination requirements only if both of the following statements are true. 1040 ez tax form 2011 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. 1040 ez tax form 2011 The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. 1040 ez tax form 2011 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. 1040 ez tax form 2011   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. 1040 ez tax form 2011 This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. 1040 ez tax form 2011   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. 1040 ez tax form 2011 The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. 1040 ez tax form 2011 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). 1040 ez tax form 2011 Excluded employees. 1040 ez tax form 2011   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Highly compensated individual. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Go to IRS. 1040 ez tax form 2011 gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. 1040 ez tax form 2011 However, the employer can choose not to have (3) apply. 1040 ez tax form 2011 Aggregation rules. 1040 ez tax form 2011   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Leased employees are treated as employees of the recipient. 1040 ez tax form 2011 One employee. 1040 ez tax form 2011   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). 1040 ez tax form 2011 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. 1040 ez tax form 2011 The trust must be a valid, existing trust under local law and must be evidenced by an executed document. 1040 ez tax form 2011 A conformed copy of the plan of which the trust is a part should be attached to the application. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Note. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Notice requirement. 1040 ez tax form 2011   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. 1040 ez tax form 2011 The organization gives notice by filing Form 1024. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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 . 1040 ez tax form 2011 Types of payments. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Diversion of funds. 1040 ez tax form 2011   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). 1040 ez tax form 2011 Discrimination in benefits. 1040 ez tax form 2011   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. 1040 ez tax form 2011 However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. 1040 ez tax form 2011 Prohibited transactions and exemption. 1040 ez tax form 2011   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. 1040 ez tax form 2011 It must file the claim on Form 1024. 1040 ez tax form 2011 The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. 1040 ez tax form 2011 An authorized principal officer of your organization must make this declaration under the penalties of perjury. 1040 ez tax form 2011   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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Benevolent life insurance associations of a purely local character and like organizations. 1040 ez tax form 2011 Mutual ditch or irrigation companies and like organizations. 1040 ez tax form 2011 Mutual or cooperative telephone companies and like organizations. 1040 ez tax form 2011 A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. 1040 ez tax form 2011 The information to be provided upon application by each of these organizations is described in this section. 1040 ez tax form 2011 For information as to the procedures to follow in applying for exemption, see chapter 1. 1040 ez tax form 2011 General requirements. 1040 ez tax form 2011   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. 1040 ez tax form 2011 They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. 1040 ez tax form 2011 Mutual character. 1040 ez tax form 2011   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. 1040 ez tax form 2011 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. 1040 ez tax form 2011 The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. 1040 ez tax form 2011 Membership. 1040 ez tax form 2011   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. 1040 ez tax form 2011 In a stock company, the stockholders are members. 1040 ez tax form 2011 However, a mutual life insurance organization cannot have policyholders other than its members. 1040 ez tax form 2011 Losses and expenses. 1040 ez tax form 2011   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Distributions of proceeds. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Such distribution represents a refund in the costs of services rendered to the member. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Mutual or cooperative telephone company. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Mutual or cooperative electric company. 1040 ez tax form 2011   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. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Qualified pole rental. 1040 ez tax form 2011   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. 1040 ez tax form 2011   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). 1040 ez tax form 2011 The 85% requirement is applied on the basis of an annual accounting period. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. 1040 ez tax form 2011 Example. 1040 ez tax form 2011   The books of an organization reflect the following for the calendar year. 1040 ez tax form 2011 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. 1040 ez tax form 2011   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. 1040 ez tax form 2011   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Tax treatment of donations. 1040 ez tax form 2011   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. 1040 ez tax form 2011 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. 1040 ez tax form 2011 A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. 1040 ez tax form 2011 Organizations similar to local benevolent life insurance companies. 1040 ez tax form 2011   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Burial and funeral benefit insurance organization. 1040 ez tax form 2011   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. 1040 ez tax form 2011 An organization that provides its benefits in the form of supplies and service is not a life insurance company. 1040 ez tax form 2011 Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. 1040 ez tax form 2011 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. 1040 ez tax form 2011 They can serve noncontiguous areas. 1040 ez tax form 2011 Like organization. 1040 ez tax form 2011   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. 1040 ez tax form 2011 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. 1040 ez tax form 2011 A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. 1040 ez tax form 2011 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. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Operating a mortuary is not permitted. 1040 ez tax form 2011 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. 1040 ez tax form 2011 How income can be used. 1040 ez tax form 2011   You should show that your organization's earnings are or will be used only in one or more of the following ways. 1040 ez tax form 2011 To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. 1040 ez tax form 2011 To buy cemetery property. 1040 ez tax form 2011 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. 1040 ez tax form 2011 No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. 1040 ez tax form 2011 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. 1040 ez tax form 2011 Buying cemetery property. 1040 ez tax form 2011   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. 1040 ez tax form 2011 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. 1040 ez tax form 2011   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. 1040 ez tax form 2011 Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not