Tag Archives: CA Attorney General

Even More Questions and Answers

Questions?Here are even more nonprofit accounting and financial questions that have come to from this site and from my workshops and my answers.

Question – California’s RRF-1

Are there any income minimums for filling out the California Attorney General’s Registration / Renewal Fee Report (RRF-1 form)?

Answer – No, but the fees charged vary based on the organization overall income.

Question – Donation Transactions

Let’s say Joe buys a necklace for $1,000.00. He gives it to a nonprofit to sell at auction. Two questions:

  1. It sells for $1,200.00 – what year end donation value does Joe get on his year end donation statement.
  2. It sells for $800.00 – what year end donation value does Joe get on his year end statement for IRS.

Also, if it sells for $1,200.00 what donation value does the purchaser get on her year end tax statement? My concern is who to give the donation credit to for year end tax purposes.

If someone gives a basketball that a sports star signs and the basketball cost $10.00. Yet someone is a real fan of the sports star and is willing to purchase the basketball for $1,000,000.00 – does the purchaser not receive any donation value for income tax purposes, he gets no statement at the end of the year, even though he gave $1,000,000.00 for a $10.00 basketball? And the person who bought a $10.00 ball and had a signature put on it gets a year end tax donation statement for 1,000,000.00?

I have read GAAP until I am blue in the face and cannot find an answer to the donation side of this issue. Lots on the bookkeeping of the sold asset, but not on what to report to IRS as donation value per donor and purchaser.

Answer -In your example above, for the person who gave the ball to be auctioned you do not put a value on the donor acknowledgment. It is not the nonprofit’s job to give tax advice to the donor, and by giving them a value that is what you are doing. Just simply say, “Thank you for the donation of the autographed basket ball.” What the donor values it on their tax form is between them and the IRS.

For the person who pays $1,000,000.00 for the ball you would give them a receipt showing that they donated $1,000,000.00 to the nonprofit less the cost of a basket ball. If you can find a value for a similarly signed ball, say on Ebay or something, you could tell them the value is their donation less the cost of the autographed ball.

Donation rules tend to be made by the IRS rules and not come from GAAP rules. A really good resources for this is IRS publication 1771. Gives you the rules and even sample language. Please check out this post, it also help answer your questions.

Nonprofit News Roundup: Laws and Money

roundupSmart things from other parts of the web.  More good blog posts will be found at the end of this month when the Nonprofit Congress Blog hosts the Nonprofit Blog CarnivalClick through for more details.

Human Resources News For California Nonprofits

Two pieces from What’s New in Employment Law from earlier this year that detail the differences and similarities between California and Federal rules in charts provided by The California Fair Employment and Housing Commission: The comparison between the Federal ADA rules (both new and old) and the California rules and the FMLA and CA’s Family Rights Act and Pregnancy Disability Leave law.

Another post from them details the updates to to CA’s Alternative Work Week law.  I like the changes.

Meal and rest period information for employers as a result of a recent court case.

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More Questions

Questions?Here are some answers to question I received at a recent training.  Many of the questions in this batch came from folks involved with religious organizations, synagogues and churches.

Why are religious organization tax exempt?

The best answer I have is the First Amendment of the Constitution of the United States which states, “Congress shall make no law respecting an establishment of religion, nor prohibiting the free exercise thereof.” Taxing a religious organization might interfere with the free exercise of religion.  For the IRS take on churches and religious organization exemptions please read this.

Is  a board member protected from legal action if it relies on outside advice?

If the board member is not paid and is acting in good faith they are most likely protected if they are involved in making what turn out to be bad decisions, even decisions that result in harm to the nonprofit.  More protection may be had in the organization Directors and Officers Liability insurance policies.  A great source of info on this topic is here, and for an organization that specializes in nonprofit insurances click here.

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