More details on the new Florida law for charitable solicitation

A Florida CPA firm has provided much more detail on Florida’s toughened charitable solicitation laws going into effect on July 1, 2014.

See New Florida Law Tightens Rules for Charitable Solicitation, by Mike Batts, CPA of Batts Morrison Wales & Lee.

If your charity raises funds in Florida, you might want to check out the article to see if you need to do more research.

Previously mentioned this law in my post Increased oversight for charities in Florida.

BMWL provides a copy of the law here.

New reporting exists for charities started up recently (i.e. registered with state less than 4 years) to raise funds for disaster relief.

All charities registered in the state must have a conflict of interest policy.

For professional solicitors, the law contains

extensive new and breathtakingly comprehensive registration, licensing, and disclosure requirements.

990 can be submitted instead of reviewed or audited financial statements

Earlier comments I’ve read indicated charities with income over certain amounts would be required to have a review or audit.

The article above says charities may submit either a 990 or financial statements. If the financials option is chosen, then the review or audit requirements kick in. That doesn’t seem like a very vigorous requirement, so I checked out the new law for myself.

The requirement for financial statements starts on line 745. The requirement for an audit when income is over $1M or a review when income is over $500k is on lines 766 through 789.

The alternative of submitting a 990 instead of financial statements starts on line 790. The revised state code says

(2) (a) In lieu of the financial statement report described in subsection (1), a charitable organization or sponsor may submit a copy of its Internal Revenue Service Form 990 and all attached schedules filed for the preceding fiscal year, or a copy of its Internal Revenue Service Form 990-EZ and Schedule O filed for the preceding fiscal year. A charitable organization or sponsor that submits such forms or schedules may redact information that is not subject to public inspection pursuant to 26 U.S.C. s. 6104(d)(3) before submission.

A charity can go through the audit or review process or instead can submit a 990. So in Florida, the new financial reporting requirement is to do a lot of extra work or submit the 990 that has already been prepared.

If you choose the 990 option, it would be worth your time to read the article for deeper background on who can prepare your 990.

Update:  Full disclosure – I am friends with some of the staff at Batts Morrison Wales and Lee.  We both focus on providing audit services to the nonprofit community.

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