Treasury, IRS Will Issue Proposed Guidance for Tax-Exempt Social Welfare Organizations
Initial Proposed Guidance Clarifies Qualification Requirements and Seeks Public Input
WASHINGTON — The U.S. Department
of the Treasury and the Internal Revenue Service today will issue
initial guidance regarding qualification requirements for tax-exemption
as a social welfare organization under section 501(c)(4) of the Internal
Revenue Code. This proposed guidance defines the term
“candidate-related political activity,” and would amend current
regulations by indicating that the promotion of social welfare does not
include this type of activity. The proposed guidance also seeks initial
comments on other aspects of the qualification requirements, including
what proportion of a 501(c)(4) organization’s activities must promote
The proposed guidance is expected to be posted on the Federal Register later today.
There are a number of steps in
the regulatory process that must be taken before any final guidance can
be issued. Given the significant public interest in these and related
issues, Treasury and the IRS expect to receive a large number of
comments. Treasury and the IRS are committed to carefully and
comprehensively considering all of the comments received before issuing
additional proposed guidance or final rules.
“This is part of ongoing efforts
within the IRS that are improving our work in the tax-exempt area,” said
IRS Acting Commissioner Danny Werfel. “Once final, this proposed
guidance will continue moving us forward and provide clarity for this
important segment of exempt organizations.”
“This proposed guidance is a
first critical step toward creating clear-cut definitions of political
activity by tax-exempt social welfare organizations,” said Treasury
Assistant Secretary for Tax Policy Mark J. Mazur. “We are committed to
getting this right before issuing final guidance that may affect a broad
group of organizations. It will take time to work through the
regulatory process and carefully consider all public feedback as we
strive to ensure that the standards for tax-exemption are clear and can
be applied consistently.”
Organizations may apply for
tax-exempt status under section 501(c)(4) of the tax code if they
operate to promote social welfare. The IRS currently applies a “facts
and circumstances” test to determine whether an organization is engaged
in political campaign activities that do not promote social welfare.
Today’s proposed guidance would reduce the need to conduct
fact-intensive inquiries by replacing this test with more definitive
In defining the new term,
“candidate-related political activity,” Treasury and the IRS drew upon
existing definitions of political activity under federal and state
campaign finance laws, other IRS provisions, as well as suggestions made
in unsolicited public comments.
Under the proposed guidelines, candidate-related political activity includes: 1. Communications
Communications that expressly advocate for a clearly identified political candidate or candidates of a political party.
Communications that are made
within 60 days of a general election (or within 30 days of a primary
election) and clearly identify a candidate or political party.
Communications expenditures that must be reported to the Federal Election Commission.
2. Grants and Contributions
Any contribution that is recognized under campaign finance law as a reportable contribution.
Grants to section 527 political
organizations and other tax-exempt organizations that conduct
candidate-related political activities (note that a grantor can rely on a
written certification from a grantee stating that it does not engage
in, and will not use grant funds for, candidate-related political
3. Activities Closely Related to Elections or Candidates
Voter registration drives and “get-out-the-vote” drives.
Distribution of any material prepared by or on behalf of a candidate or by a section 527 political organization.
Preparation or distribution of voter guides that refer to candidates (or, in a general election, to political parties).
Holding an event within 60 days of a general election (or within 30
days of a primary election) at which a candidate appears as part of the
These proposed rules reduce the need to conduct fact-intensive
inquiries, including inquiries into whether activities or communications
are neutral and unbiased.
Treasury and the IRS are planning
to issue additional guidance that will address other issues relating to
the standards for tax exemption under section 501(c)(4). In particular,
there has been considerable public focus regarding the proportion of a
section 501(c)(4) organization’s activities that must promote social
welfare. Due to the importance of this aspect of the regulation, the
proposed guidance requests initial comments on this issue.
The proposed guidance also seeks
comments regarding whether standards similar to those proposed today
should be adopted to define the political activities that do not further
the tax-exempt purposes of other tax-exempt organizations and to
promote consistent definitions across the tax-exempt sector.
Long Island- Wish you could make your student loans disappear?
Student loan forgiveness programs can make it happen, but there’s a problem.
“There needs to be more awareness about these programs,” said Betsy
Mayotte, director of regulatory compliance at American Student
Assistance, a nonprofit that helps borrowers manage their student debt.
So the organization released a student loan forgiveness guide this year on its website, http://asa.org.
The Consumer Financial Protection Bureau, a government watchdog,
released its own guide recently to bring attention to the programs. The programs are not a quick fix. Instead, they enable borrowers to erase their remaining student debt after several years of payments. Most of the programs are tied to certain low-paid professions, such
as teachers or public defenders, and have other restrictions.
Here’s an overview of several options.
Public service program
This program is for those who work in federal, state or local
government jobs or at a nonprofit that has been designated as a
501(c)(3) tax-exempt organization.
The federal consumer protection bureau estimates that a quarter of
the country’s workforce falls into those categories. Individuals also
must have high student loan balances relative to their incomes.
The program works like this: Anyone who makes 120 on-time monthly
payments toward their student loans and works in a qualifying job for 10
years (they don’t have to be consecutive) can apply to have their
remaining balance forgiven.
The amount of the loans forgiven is not taxed, under current tax law.
Only those with federal Direct Loans will qualify for this program,
but some loans, such as the Federal Family Education Loan (also known as
FFEL) and the Perkins Loan, can be consolidated into a Direct Loan. If
you don’t know what type of federal loan you have, you can find out at nslds.ed.gov.
The program was established in 2007, so no one has received loan forgiveness yet.
Those hoping to take advantage need to make sure their job qualifies
with the Department of Education every year, says Mark Kantrowitz,
publisher of Edvisors.com. Save the paperwork and annual income forms in case you need to later prove your eligibility.
The Department of Education offers more guidelines: http://1.usa.gov/18sELJS.
Under this program, borrowers can qualify for reduced monthly payments and, after 25 years, the remaining balance is forgiven.
It is important to note that the forgiven amount is taxed as income,
which means you will likely have to pay a sum to the IRS that is lower
than the amount forgiven.
The program is for those whose federal student loan debt is high relative to their income and family size.
Your lender will ultimately decide if you are qualified, but you can
see if you would benefit from this program by using this online
There are other rules, such as which types of federal loans qualify. The Department of Education has a helpful tipsheet: http://1.usa.gov/19JJVQA.
Pay as you earn plan
Borrowers can apply to have their monthly payments reduced and, after 20 years of payments, the balance is forgiven.
Any forgiven amounts are taxed as income.
This program is for those with a high level of federal student loans
compared to their income and who took out their first federal student
loan after Oct. 1, 2007.
Use the Department of Education’s online calculator to see if you qualify: http://1.usa.gov/194F7V0.
Depending on your job, you may be able to get help with your loans.
Teachers, for example, should see if they are eligible for the teacher loan forgiveness program.
They must work at a qualifying school for five consecutive years to
receive up to $17,500 in forgiveness on certain federal loans. For more
details, see: http://1.usa.gov/1bITqWq.
American Student Assistance put together a list of more than 60
programs. Some are based on type of job; others are state programs. Some
state programs even help with private loans.
Mayotte of American Student Assistance recommends an Internet search
to see if your state or job qualifies for some sort of student loan
She says it’s important to ask your employers or human resources
department if student loan help is available. She says more employers
are refunding a part of their employee’s student loan payments.
Mayotte also warns that borrowers should not take jobs just to have
their student loans forgiven, or take out too much debt because they
assume their debt will be forgiven.
Many of the programs are budget-based, she says, and there’s a
possibility that some could disappear or not be around by the time you
WASHINGTON ― The Internal Revenue Service today issued a consumer
alert about possible scams taking place in the wake of Typhoon Haiyan.
On Nov. 8, 2013, Typhoon Haiyan — known as Yolanda in the Philippines —
made landfall in the central Philippines, bringing strong winds and
heavy rains that have resulted in flooding, landslides, and widespread
Following major disasters, it is common for scam artists to
impersonate charities to get money or private information from
well-intentioned taxpayers. Such fraudulent schemes may involve contact
by telephone, social media, email or in-person solicitations.
The IRS cautions people wishing to make disaster-related charitable donations to avoid scam artists by following these tips:
To help disaster victims, donate to recognized charities.
Be wary of charities with names that are similar to familiar or
nationally known organizations. Some phony charities use names or
websites that sound or look like those of respected, legitimate
organizations. The IRS website at IRS.gov has a search feature, Exempt Organizations Select Check,
through which people may find legitimate, qualified charities;
donations to these charities may be tax-deductible. Legitimate charities
may also be found on the Federal Emergency Management Agency (FEMA)
website at fema.gov.
Don’t give out personal financial information — such as Social
Security numbers or credit card and bank account numbers and passwords —
to anyone who solicits a contribution from you. Scam artists may use
this information to steal your identity and money.
Don’t give or send cash. For security and tax record purposes,
contribute by check or credit card or another way that provides
documentation of the gift.
If you plan to make a contribution for which you would like to claim a deduction, see IRS Publication 526, Charitable Contributions, to read about the kinds of organizations that can receive deductible contributions.
Bogus websites may solicit funds for disaster victims. Such
fraudulent sites frequently mimic the sites of, or use names similar to,
legitimate charities, or claim to be affiliated with legitimate
charities in order to persuade members of the public to send money or
provide personal financial information that can be used to steal
identities or financial resources. Additionally, scammers often send
email that steers the recipient to bogus websites that appear to be
affiliated with legitimate charitable causes.
Taxpayers suspecting disaster-related frauds should visit IRS.gov and search for the keywords “Report Phishing.” More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.”
Sales tax applies to retail sales of certain tangible personal property and services. Use tax applies if you buy tangible personal property and services outside the state and use it within New York State.
We all have those days when we're down in the dumps and just can't get motivated. But are you seeing that more often than not at your office? Is productivity beginning to suffer? Does the staff morale need a makeover?
There are many simple, but effective techniques you can use to boost employee morale, even if your staff is really down in the dumps.
Change up the schedule When
people are stuck in a rut, you need to break out of the daily grind. Allow them start a little later
on Monday so they can tie up any personal loose ends leftover from the weekend and
come in focused and ready to turn things around.
Have a daily pow wow When people are down,
keeping things quiet will only make it worse. Have a daily brief meeting where you can
share the actions and progress you're taking to make things better. Do
this in a daily circle standing, like a huddle. It creates a natural shot of
energy and is better for you than coffee and doughnuts. Say "thank you" This is the easy one. It's just two simple words. Say it and say it about
something specific and with sincerity. Showing your staff they are appreciated goes a long way in the effort to
increase morale. Let them talk If you're a customer service person you're taught that angry people need to vent
before they'll be open to change. Speak with your employees individually or in small
groups to share the problems and challenges they're facing. This
technique is a considerable step in restoring morale. In large groups it's more likely to get someone on a soap
box harping on one problem, which can generate more problems than you
can fix, so keep it to smaller more personal groups. Change the scenery Even in
the greatest workspace, emotions can decline when the physical environment
stays the same. Get your team out of the office occasionally for a unique and different activity, like volunteering for a day at
Habitat for Humanity, community food drive or a company fishing trip. While everyone is out, have the office spruced up with fresh paint or floral arrangements with bright colors. The return to a clean bright space may be just the
sparkle you need to improve morale. Do something out of the ordinary Bringing
in doughnuts or bagels for breakfast is a nice gesture,
but might not be enough to uplift the mood. Do something
different: If your employees sit in front of their computers all day,
hire a massage therapist to come in so employees can enjoy quick but
revitalizing back and shoulder massage. Or how about hiring a
yoga instructor to come in to teach a class for an hour? Remember-Have fun! You don't have to dress in a crazy
costume, but you can promote good spirits and enjoyment in
the workplace. Go around and talk to your employees. Smile. Acknowledge what
they do, for without them, you wouldn't be in business.
To All Our Service Men and Women My heart and appreciation goes out to all our men and women To those who have served and to those who still are today In peace and in war You are there, protecting and defending our country, our freedom, our honor Some call them soldiers, I call them heroes Our veterans have risked their lives for us They have lived through hell and fought with honor For every life, there is a soul For every soul, there is a life For those who have died, we show tremendous gratitude And hold you forever in our memory For those who live, along with them live the horrific memories of battle Some memories are of defeat and some of victory Our veterans are more than soldiers They were and always will be our heroes
Bookkeeping may seem like an overwhelming task simply because you are unfamiliar with how to do it
if you’re going to hire a professional for your record keeping, it’s
advisable to have the basic knowledge of how your books work. Many
online schools offer basic bookkeeping classes that teach the necessary skills. Why not spend a few hours learning some basic bookkeeping strategies? It could prove to be a wise investment of your time.
Fast Track Settlement Program Now Available Nationwide; Time-Saving Option Helps Small Businesses Under Audit
WASHINGTON — The Internal Revenue Service
today announced the nationwide rollout of a streamlined program
designed to enable small businesses under audit to more quickly settle
their differences with the IRS.
The Fast Track Settlement
(FTS) program is designed to help small businesses and self-employed
individuals who are under examination by the Small Business/Self
Division of the IRS. Modeled on a similar program long available to
large and mid-size businesses (those with more than $10 million in
assets), FTS uses alternative dispute resolution techniques to help
taxpayers save time and avoid a formal administrative appeal or lengthy
litigation. As a result, audit issues can usually be resolved within 60
days, rather than months or years. Plus, taxpayers choosing this option
lose none of their rights because they still have the right to appeal
even if the FTS process is unsuccessful.
Jointly administered by SB/SE and the IRS Appeals
office, FTS is designed to expedite case resolution. Under FTS,
taxpayers under examination with issues in dispute work directly with
IRS representatives from SB/SE’s Examination Division and Appeals to
resolve those issues, with the Appeals representative typically serving
The taxpayer or the IRS examination representative may initiate Fast Track for eligible cases, usually before a 30-day letter is issued. The goal is to complete cases within 60 days of acceptance of the application in Appeals.
2014 PTIN Renewal Period Underway for Tax Professionals
WASHINGTON — The Internal Revenue Service
today reminded the nation’s almost 690,000 federal tax return preparers
that they must renew their Preparer Tax Identification Numbers (PTINs)
for 2014. All current PTINs will expire on Dec. 31, 2013.
Anyone who, for compensation,
prepares or helps prepare any federal return or claim for refund must
have a valid PTIN from the IRS. The PTIN must be used as the identifying
number on returns prepared.
“We ask that you renew your PTIN
as soon as possible to avoid a last-minute rush. It’s easy to let this
slip as the holiday season approaches,” said Carol A. Campbell,
Director, IRS Return Preparer Office.
The PTIN system is ready to accept applications for 2014.
For those who already have a 2013
PTIN, the renewal process can be completed online and only takes a few
moments. The renewal fee is $63. If you can’t remember your user ID and
password, there are online tools to assist you. Preparers can get
started at www.irs.gov/ptin.
If you are registering for the first time, the PTIN application fee is $64.25 and the process may also be completed online.
IRS Paid Preparer Tax Identification Number Application and Renewal, is
available for paper applications and renewals, but takes four to six
weeks to process. Failure to have and use a valid PTIN may result in
penalties. All enrolled agents, regardless of whether they prepare
returns, must have a PTIN in order to maintain their status.
There have been a number of enhancements to the online PTIN system since last year. They include:
The fully functional “Manage My
Account” tool allowing preparers to self-correct almost any field at any
time (including professional credentials). Previously, most changes had
to be made during renewal. A phone call was required for users to make
changes during the rest of the year. However, for security reasons, name
changes still require written documentation.
Preparers can now view completed
continuing education programs reported by IRS-approved providers
beginning with 2013 courses. Providers report completed CE programs to
the IRS based on your PTIN number. Enrolled agents must have a minimum
of 16 CE hours annually and a total of 72 hours every three years.
Others can also view voluntary programs completed. If something is
missing, contact your provider directly as we only display what
providers send to us.
Planning to take a year off for
any reason? A new function allows certain preparers to inactivate their
PTINs voluntarily and then reactivate the same number when they return
to work. This is only for those preparers who plan to take a full year
off. If you are paid to prepare tax returns during any part of a year,
you must have a valid PTIN. Note: Enrolled agents must maintain a valid
PTIN each year in order to maintain their EA credential and therefore
are not eligible to inactivate their PTIN.
WASHINGTON — The Internal Revenue
Service today warned consumers about a sophisticated phone scam
targeting taxpayers, including recent immigrants, throughout the
Victims are told they owe money
to the IRS and it must be paid promptly through a pre-loaded debit card
or wire transfer. If the victim refuses to cooperate, they are then
threatened with arrest, deportation or suspension of a business or
driver’s license. In many cases, the caller becomes hostile and
“This scam has hit taxpayers in
nearly every state in the country. We want to educate taxpayers so they
can help protect themselves. Rest assured, we do not and will not ask
for credit card numbers over the phone, nor request a pre-paid debit
card or wire transfer,” says IRS Acting Commissioner Danny Werfel. “If
someone unexpectedly calls claiming to be from the IRS and threatens
police arrest, deportation or license revocation if you don’t pay
immediately, that is a sign that it really isn’t the IRS calling.”
Werfel noted that the first IRS contact with taxpayers on a tax issue is
likely to occur via mail
Other characteristics of this scam include:
Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
Scammers may be able to recite the last four digits of a victim’s Social Security Number.
Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
Victims hear background noise of other calls being conducted to mimic a call site.
After threatening victims with
jail time or driver’s license revocation, scammers hang up and others
soon call back pretending to be from the local police or DMV, and the
caller ID supports their claim.
If you get a phone call from someone claiming to be from the IRS, here’s what you should do:
If you know you owe taxes or you
think you might owe taxes, call the IRS at 800-829-1040. The IRS
employees at that line can help you with a payment issue – if there
really is such an issue.
If you know you don’t owe taxes or have no reason to think that you
owe any taxes (for example, you’ve never received a bill or the caller
made some bogus threats as described above), then call and report the
incident to the Treasury Inspector General for Tax Administration at 800-366-4484.
If you’ve been targeted by this scam, you should also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add "IRS Telephone Scam" to the comments of your complaint.
Taxpayers should be aware that
there are other unrelated scams (such as a lottery sweepstakes) and
solicitations (such as debt relief) that fraudulently claim to be from
The IRS encourages taxpayers to
be vigilant against phone and email scams that use the IRS as a lure.
The IRS does not initiate contact with taxpayers by email to request
personal or financial information. This includes any type of electronic
communication, such as text messages and social media channels. The IRS
also does not ask for PINs, passwords or similar confidential access
information for credit card, bank or other financial accounts.
Recipients should not open any attachments or click on any links
contained in the message. Instead, forward the e-mail to firstname.lastname@example.org.
More information on how to report phishing scams involving the IRS is available on the genuine IRS website, IRS.gov.