Nonprofit finance, accounting, and tax news. Other tidbits of interest to the charity community.
The Evangelical Council for Financial Accountability is graciously making two resources available for the really low price of registering at their website.
I encourage churches and parachurch organizations to seriously consider becoming accredited members of ECFA.
As you ponder doing so, you really ought to register at their site. They provide a variety of information even for those who merely register. If you do that, which already makes sense, then the books free.
The IRS announced the standard mileage rates for 2015. You can find the announcement in IR-2014-79.
Beginning on January 1, 2015, the standard mileage rates for the use of a car (also vans and pickups) will be: (more…)
Bit of short notice, but tomorrow (Wednesday 12/31 at 11 am Central) Clifton Larson Allen will provide a free webcast:
Looks like it will be a great survey for small NPOs.
Hat tip to my friend, Tim Murphy (@NonprofitCFO), of CLA for mentioning the course.
If you are involved with a small ministry with just a few staff people, you may not have yet tuned into the health care law, the Patient Protection and Affordable Care Act. If so, it might be wise to dive into the details.
Prof. Corey Pfaffe has provided a few introductory articles at MinistryCPA. (more…)
The chairman of the Evangelical Council for Financial Accountability has a superb open letter outlining a strategy for dealing with the issue of pastors touching on politics during sermons.
A few of the problems with the current ban on political speech are the flagrant violations of the U.S. constitution: (more…)
Corey Pfaffe, CPA, provides answers to those top 10 questions at MinistryCPA.
The questions, with links to each answer, can be found here.
You can download a superb 12 page PDF of the full set of answers here.
If you are a pastor, missionary, church treasurer, or on the finance staff of a charity, I recommend you check out Prof. Pfaffe’s superb explanations. Get professional advice to apply the information to your situation or if you need to go beyond the very straightforward answers.
There is a bonus question: (more…)
For a quick tax update, I recommend you frequently visit Corey Pfaffe’s blog, MinistryCPA. Better yet, set up an RSS feed so you get his articles as he posts them.
Here are three of his recent articles that would help your understanding:
Pastors and other ministers of the gospel are defined by federal law to be self-employed for purposes of FICA. That means they are required to make quarterly payment to the Treasury of self-employment taxes under SECA instead of FICA.
That also means churches should not be withholding FICA taxes from staff who are categorized as ministers of the gospel. Don’t blame me – that’s federal law.
What to do? Should churches correct the incorrect withholding?
990s are publicly available.
If you put social security numbers in the return, those numbers are now publicly available too.
Check to make sure you don’t included any soc numbers in the return.
Where can you find some comparability information for salary? To support that your nonprofit is providing reasonable compensation to your staff, you will need something to back up your conclusion the pay package is reasonable.
With a few minutes research, I found several resources. Prices and links as of the moment I looked at the websites.
The first three are already known in the religious community. Three more might be helpful as well. You can find more sources with a few minutes research on the ‘net, but this will get you started:
National Association of Church Business Administration: (more…)
The IRS has released a new Form 1023-EZ to provide a much simpler way for small charities to get tax exempt status at the federal level.
The new form is 3 pages long instead of 26 pages in the full 1023. This application is allowed for organizations who expect revenue to be $50,000 or less for each of the next three years.
If the applicant is already in operation, the income in each of the past years cannot be over $50,000.
There are a few other conditions for using the 1023-EZ, but I think that charities that plan to be under $50K for three more years won’t have much problem meeting those requirements. One condition to keep an eye on is that the applicant cannot have over $250,000 in assets.
If you don’t know where to start when looking at a 990 to figure out what’s going on, two reporters have provided you a great intro.
Here is a slide deck for a presentation that highlights a few items to look at: Five Tip-offs to Trouble in the Form 990.
A 990 has been highlighted here so you can see where to look for key numbers that tell the story of what is happening in a charity. The sample is an actual 990 with an unflattering story to tell.
Board training opportunity
If you have board members who have a basic idea of how to find their way around a 990 and want them to learn more, show them the above links.
The presentation is from Kris Hundley of the Tampa Bay Times and Kendall Taggart of The Center for Investigative Reporting.
For finance staff in a charity, some things to learn
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.
A law expected to go into effect in Florida as soon as the governor signs it will give charity regulators more authority to oversee charities and deal with bad actors. Report is by Kris Hundley from Tampa Bay Times: New law will give regulators more oversight of charities.
Here is an overall assessment of the new law: (more…)
There is a perception that regulators, such as the IRS, California Franchise Tax Board, and California Attorney General scour every filing they receive from charities to make sure every charity is obeying every law and has every box checked correctly. Based on that detailed analysis, the agencies decide who to audit for misconduct and they start enforcement action on everyone that steps so much as an inch out of line or answers even one question “wrong”.
Umm. Not quite.
The perception amongst my colleagues who work with charities is that the various regulators barely have time to file the reports and probably don’t have time to study anything. I have long guessed that the volume of reports is so overwhelming that there isn’t time to carefully consider anything unless someone from the public complains.
In her report, Bill targeting ‘scam charities’ in California law moves forward, Kendall Taggart from the Center for Investigative Reporting confirms my colleague’s read of the situation is more accurate that the common perception.
Charities and fundraisers operating in California are required to file an annual report with the Registry of Charitable Trusts in the Attorney General’s office. The initial filing is a CT-1. The recurring annual report is the RRF-1.
Here is some info from the article: (more…)