Tax notes.Application for Charity Status Revised A new form from the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. that streamlines the process by which charitable organizations This article is about charitable organizations. For other uses of the word charity, see Charity. A charitable organization (also known as a charity) is an organization with charitable purposes only. seek tax-exempt status also will help the service spot potentially abusive charities (www.irs.gov/newsroom/article/0,,id=130666,00.html). In addition requiring more information up front will mean fewer contacts between the IRS and the organizations are necessary. The revised Form 1023, Application for Exemption Under Section 501(c)(3) of the Internal Revenue Code The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. , is available online at www.irs.gov. Printed copies of the form and instructions are available from the IRS at 800-829-3676. IRS Changes Terms for Settlement The Appeals Division of the IRS has reassessed and tightened the guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. under which it will accept settlement offers from taxpayers that participated in certain abusive transactions, such as reporting losses and deductions from lease strips or from inflated-basis assets derived from them or in intermediary transactions (www.irs.gov/newsroom/article/0,,id=130347,00.html). Under the new guidelines the IRS will not settle unless taxpayers concede (agree to the disallowance dis·al·low tr.v. dis·al·lowed, dis·al·low·ing, dis·al·lows 1. To refuse to allow: "[The government] of) 100% of the claimed losses or deductions, reduced only by the amount of transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). up to 10% of such claimed losses or deductions. Furthermore, taxpayers also must concede 50% of the accuracy-related penalty at issue. To settle their cases, taxpayers must enter into a closing agreement with the IRS that conforms to these revised guidelines. Reminder: Mileage Rates Set for 2005 The IRS reset the optional standard mileage rates for 2005 in computing the deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). costs of operating an automobile for business, charitable, medical or moving expense purposes (www.irs.gov/newsroom/article/0,,id=131232,00.html). As of January 1, 2005, the standard mileage rates for the use of a car (including a van, pickup or panel truck) for business purposes was set at 40.5 cents a mile; for medical or moving expenses, 15 cents a mile; and when providing services to a charity, 14 cents a mile. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion