Tag Archives: Exempt Status

Nonprofit News and Updates

This is a great way to start of a blog post, and awesome Infographic from “America’s Nonprofit Sector: A Primer” from the Foundation Center. Please click on the image to enlarge.

Elections and Nonprofits

Many elections this year around the country have issues that will directly affect nonprofit organizations. The National Council of Nonprofits has a nice rundown here of more than 140, check it out to see what is happening in your state.

Washington Nonprofits will be having upcoming events around elections and what nonprofits can do, click through to see all that they are doing this election season.

Nonprofit HR

Do you know about Seattle’s new paid sick/safe leave ordinance that takes effect September 1? Washington Employers has good information on the program and, if you are affected by this, what to do.

Finance and Regulations

The Nonprofit Times has a good piece via their Exempt e-newsletter about new and proposed state regulations will make things harder for some nonprofits. It’s good to know what is happening in other states so you can have a ready response in case legislation like these come to yours.

Two articles from the Chronicle of Philanthropy detail the pitfalls in spending, fundraising and especially outsourced fundraising. The articles feature two veterans charities – why do these types of organizations seem so ripe for potential scams – and one animal related group, but there are lots of similarities, red flags and warnings in them for both donors and nonprofits. The first is here, the second is here.

This may be the most interesting piece, to me at least, that came out recently. The American Institute of Certified Public Accountants has released a draft of a proposed not-for-profit guide. It is primarily designed for CPAs performing work for not-for-profits, but it offers insight to all as to what issues the field thinks is important. I’ll be looking them over and probably letting them know my two cents in the comment period.

Management and Money

Both of these articles from the Nonprofit Quarterly stood out to me recently. Is managing a complex organization a game? This article makes the case that it is not. And do you know what the right mix of resources is for your organization? If so have you achieved that mix of income? This article is helpful for identifying so areas of thought you might not have considered before.

In Closing

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Year End IRS Charity News and Updates

As we get ready to roll into another year I thought I’d post a few items from the IRS and others about year end issues. I wrote about recording donation received in a prior year before, but it is worth a reminder as I always get a few of those questions.

Before the IRS updates, including the 2012 Mileage rates, I thought I would share the The Johns Hopkins Center for Civil Society Studies’ 11 Intriguing Discoveries of 2011. I really like the work that the Center does bringing together news and trends about the nonprofit sector. Check out the list and sign up to see what they bring us for 2012.

IRS Announces 2012 Standard Mileage Rates

Beginning on Jan. 1, 2012, the standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes for the use of a car (also vans, pickups or panel trucks) will be:

  • 55.5 cents per mile for business miles driven
  • 23 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile. The standard mileage rates are based on an annual study of the fixed and variable costs of operating an automobile. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Updated IRS Publication

An updated edition of Publication 557, Tax-Exempt Status for Your Organization is now available on IRS.gov. It provides an overview of the rules and procedures that apply to organizations that seek tax exempt status. Both for existing charities and start ups, I think it is a must read on how to stay compliant with the IRS.

Don’t Overlook the Small Business Health Care Tax Credit

If you are a nonprofit who pays at least half of your employee health insurance premiums, you may qualify for a tax credit of up to 25 percent of the premiums paid. An employer with fewer than 25 full-time employees who pays an average wage of less than $50,000 a year may qualify. For more information see the Small Business Health Care Tax Credit.

Reinstatement of Exemption After Automatic Revocation

Is your nonprofit on the list of organizations revoked for failure to file a required 990 for three consecutive years?  If so, does the organization want its tax-exempt status reinstated?  Learn all about automatic revocation of exemption and how to apply for reinstatement on IRS.gov.

Organizations seeking reinstatement must file an application for exemption and pay a user fee regardless of whether it was required to file an application previously.  Certain small organizations who were eligible to file the Form 990-N for 2007, 2008 and 2009 and who file for reinstatement before December 31, 2012 may qualify for a reduced user fee of $100 under a transitional relief program. Consult Notice 2011-43 to see if your organization may qualify for a reduced user fee. You can also, see this IRS video to learn about reinstatement.

Nonprofits Not Required to File an Application for Exemption Still Have Annual Filing Requirement

Certain organizations do not have to apply for tax exemption but still have a filing requirement. These include section 501(c)(3) organizations whose gross receipts in each taxable year are normally not more than $5,000 as well as organizations exempt under other Code Sections, such as 501(c)(4).

Most small tax-exempt organizations, other than churches and certain church-related organizations, whose gross receipts are normally $50,000 or less for tax years ending on or after December 31, 2010 ($25,000 before December 31, 2010) have an annual reporting requirement.  For tax years beginning after December 31, 2007, organizations are required to file an annual electronic notice, Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required To File Form 990 or 990-EZ.

If you have never filed, please contact Customer Account Services at 1-877-829-5500 (a toll-free number) and ask that an account be established for the organization to allow filing of the e-Postcard.

Voluntary Worker Classification Settlement Program; Past Payroll Tax Relief Provided to Employers Who Reclassify Their Workers

The IRS launched a new program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers. This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.

The new Voluntary Classification Settlement Program (VCSP) is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government. Under the program, eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees. The VCSP is available to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees. Click here for more details.

Stayed tuned for more and have a great 2012!

 

Nonprofit News Update

roundupThis weeks update features a great piece on using Social Capital, more human resource topics that didn’t make it in to the last post and the latest from the Internal Revenue Service that might affect your organization.

The Power of Social Capital

The Fieldstone Alliance has a great e-newsletter and this topic caught me eye: Mapping Your Networks to Mine Valuable Resources. From the article:

After Exploring all possible options for reducing expenses and increasing revenues, many nonprofits are stymied—how can they survive this downturn? Every nonprofit has another valuable resource that they can tap—social capital. Positive, productive relationships represent social capital, which is just as important (well, almost as important) as money in the bank.

Social capital has been described as the resources available to people based on the networks their relationships give them access to. Just as a skilled plumber knows how the water is piped throughout the house, a skilled nonprofit or community leader knows how social capital flows through their networks or community.

Check out the article for more.

More on Nonprofits Human Resource Issues

Are you, or have you ever had to draft a severance agreement? This article talks about a new publication from the Equal Employment Opportunity Commission that may be of help, even though some are renaming the document, “How to Sue Your Employer.”

Exempt employees can present a challenge to employers, nonprofit or for-profit, especially when it comes to the issue of docking an employee’s pay.  Make a mistake and you can violate their exempt status and open your self up to a world of financial and legal hurt. This article and this article offer some guidance that may be of help. You should also make sure there are not any separate, or even more stringent state rules that may apply to your organization as well.

IRS Updates and News

For those who have been waiting, efile.form990.org is ready to help you through filling out your 2008 form 990. They can also help you with several state filings as well, please do pay them a visit.

The final regulations for the 990-N, the electronic post card filing for small nonprofits have been released. No changes from the draft version, but it should be noted that organizations that are required to file the form and fail to do so for three consecutive years will automatically lose their tax-exempt status. Revocations will begin in May 2010.

The latest Form 990 filing tip is all about related organizations and schedule R. What is a related organization you ask? From the IRS:

Related organizations are organizations that stand in a parent/subsidiary relationship, brother/sister relationship, or supporting/supported organization relationship. Supporting and supported organizations are defined in section 509(a)(3) and 509(f)(3). Determination of the first two relationships depends on a definition of control set forth in the Form 990 instructions glossary and Schedule R instructions. The definition of control depends on whether the organization has owners or persons with beneficial interests.

Finally, the IRS wants us to make sure we handle donated property and non-cash contribution transactions the right way. Here is a page with several more links that might be of interest to any organization that receives non-cash contributions.