Orange County Head Start Inc

PART X, LINE 2:

“Ochs is exempt from federal income taxes under section 501(c)(3) of the internal revenue code and is also exempt from california franchise taxes under section 23701(d) of the revenue and taxation code and, therefore, has made no provision for federal or california income taxes. In addition, ochs was determined by the internal revenue service to not be a "private foundation" within the meaning of section 509(a) of the code. Under the new internal revenue code section 512(a)(7), certain employer-provided fringe benefits are considered unrelated business income (ubi) and are subject to income tax. The fringe benefit payments are classified as ubi if they are incurred by the organization after december 31, 2017 for: (1) on-premises athletic facility is a facility predominately used by employees and their families, (2) qualified transportation benefits include commuter vehicle and van pooling as well as transit, such as buses and trains, or (3) qualified parking facility includes parking provided by an employer and parking reimbursements provided under a bona-fide reimbursement arrangement. During the year ended june 30, 2018, ochs does not believe that the payments incurred by the organization were classified as ubi under the 2017 tax cuts and jobs acts as qualified transportation benefits and has not recognized any income tax charge. Ochs follows the provisions of fasb asc 740-10, income taxes and subsections thereof. Accordingly, ochs accounts for uncertain tax positions by recording a liability for unrecognized tax benefits resulting from uncertain tax positions taken, or expected to be taken, in its tax returns. Ochs recognizes the effect of income tax positions only if those positions are more likely than not of being sustained by the appropriate taxing authorities. Ochs does not believe that its financial statements include any uncertain tax positions and accordingly, has not recognized any liability for unrecognized tax benefits in the accompanying financial statements.”