Nonprofit update

Common problems to avoid in employment law – post by Katie Morell at AmEx Open Forum:

3 Legal Landmines You Must Avoid

Extremely short version:

Read the rest of this entry »

I have several posts about the mandatory report of overseas bank accounts.  This issue can easily involve NPOs that have overseas operations. The form used to report and the whole process is referred to as FBAR. Actual name is Report of Foreign Bank and Financial Accounts.

Extension of deadline

The IRS has extended a deadline for filing the FBAR reports for 2009 and earlier. The new deadline is November 1, 2011.

This means “persons” could catch up on the filing of all those reports that had never been filed. Persons include NPOs with bank accounts used in overseas projects.

By the way, the extension does not apply to the 12-31-10 reports which must be filed by 6-30-11.

Read the rest of this entry »

Verne Hargrave, at Faith-Based Accounting, has a one word answer. See his post: Question #4 – “should our childcare workers be treated as employees or independent contractors.” Straight to the point.

Previously discussed the FBAR report and additional background on how easy it is for an NPO with overseas activity to generate a requirement to file the report.  Will get back to the extended deadline, but need to look at the downside of not filing.

Penalties

This is where things get ugly. The FBAR report says the penalty for a person who fails to properly file is a civil penalty up to $10,000. This applies to organizations also.  If there is reasonable cause, then no penalty will be imposed.

It gets worse.

Read the rest of this entry »

This series of posts is discussion the FBAR in general and an extension of the deadline to file the reports from 2009 and earlier. It is important to note the deadline for filing the 2010 reports is still June 30, 2011. Not much time left for those reports.

Previously discussed the filing requirements for the FBAR report and how that would fit into the operations of an NPO with overseas activities.

How does this get messy for a mission organization?

How else could the usual functioning of a foreign mission organization create filing requirements? Let’s say you have missionaries located in the field who have a local bank account. While they likely are drawing a very modest salary, the situation could easily develop where staff could cross that $10,000 cutoff in their account and have to file a report. Merely send someone funds to buy a vehicle, for example. Your program manager and assistant manager sign on the account used for the office expenses, so they each have a personal filing requirement.

Read the rest of this entry »

Federal law requires filing a report with the Treasury Department when you have foreign bank accounts with balances over a certain amount. This law applies to NPOs.

Deadline for filing all of the past reports has been extended by the IRS.

How can this be an issue in the nonprofit community? If you have field programs and a local bank account to pay bills then this requirement could kick in. It is my personal perception there may be some mission organizations that have a filing requirement but are not doing what they need to do.

I will give a little background, explain why this is an issue for the nonprofit community, and then describe the extended deadline.

Read the rest of this entry »

As discussed here, not filing any returns with the IRS for three years now results in automatic revocation of exempt status. This is a very bad place to be. Without exempt status an organization cannot accept deductible contributions, would have to file an 1120 income tax form, and would not be able to do other things that only exempt organizations can do.

If you get in this situation there is no appeal or reversal. Your organization will have to apply for exempt status from scratch. The whole 1023 thing.

The IRS announced some special rules, called transition relief, for very small organizations.

Read the rest of this entry »