The Federal Taxation class at Maranatha Baptist Bible College, led by Professor Corey Pfaffe, CPA, has begun writing short Q&As posts on tax issues of interest to church, religious NPOs, pastors, and missionaries.
You can find the comments at MinistryCPA.
Over the weekend I wrote a post saying that active and informed board members are the cause of the correlation between good governance and compliance with tax laws.
More info is available on the speech by Ms. Lois Lerner, Director of Exempt Organizations at the IRS. She is the senior executive in the IRS that deals with NPOs, so her voice is one that we ought to listen to. She spoke at the Georgetown Law Annual Conference.
That is perhaps the conclusion you could reach from reading a new study from the IRS.
Holly Hall, of The Chronicle of Philanthropy, reports on a speech by Lois Lerner of the IRS in a post, Good Governance Makes tax Compliance More Likely, Says IRS Study.
The IRS looked governance issues in 1,300 charities after the IRS had involvement with those organizations for other reasons. They found a very strong correlation between organizations that had good governance and high levels of compliance with the tax law.
Key findings:
It’s not just two big-time reporters and this teeny-tiny blog looking at the mebendazole issue anymore.
It is now obvious that the IRS has been paying attention for quite some time. On Monday their involvement hit the papers.
Two articles appeared:
William P. Barrett, from Forbes magazine, posted IRS Audit: Big Charity Filed Misleading Tax Return
Caroline Preston, of The Chronicle of Philanthropy posted IRS Levies Fine on Food for the Hungry Over Drug Valuations.
If you have any interest in the issue of valuing GIK meds, you will want to read both articles.
There are lots of places NPOs can get themselves into trouble by violating rules they didn’t know about.
Katie Thomas, CPA, has a great survey of a few places that can cause problems for NPOs in her post, You Don’t Know What You Don’t Know, at the Nonprofit GPS blog. She mentions: (more…)
IRS announced new standard mileage rates for 2012 in Notice 2012-1:
55.5 cents per mile for all miles of business use (business standard mileage rate).
23 cents per mile for use of an automobile …for medical care
23 cents per mile for use …as part of a move for which the expenses are deductible
14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization
Faith-Based Accounting has a great intro to federal tax reporting requirements for NPOs at Ya Mean I Gotta Deal With the I.R.S.?
Do you have: (more…)
The answer could easily be ‘yes.’
Corey Pfaffe, CPA, writing in “Benevolent” Gifts to Volunteers, says if you pay your volunteers you can generate taxable income that should be reported to the IRS.
There is a gray line that NPOs can easily cross. Mr. Pfaffe quotes a paragraph from IRS publication 3079:
“Example: ABC Organization operates a private school and sponsors [fundraisers] to raise revenue for the school. Parents who work at the [fundraising] session are given a tuition reduction of $50 for each week they work. This reduction of tuition is compensation to the parents; they are not working as “volunteers.”
Good news. The IRS has issued guidance on the tax treatment of cell phones.
You probably recall, CPAs and other tax advisers have been grumping at you to report as a taxable benefit the personal usage of cell phones. Yes, I know it’s ridiculous, but that’s the way the law was written.
Previously discussed a scam where someone is sending letters saying businesses need to pay $370 to file the renewal of a fictitious business name license. Those are also called a doing-business-as name.
You also don’t have to pay anyone to file a Statement of Information (SOI-100) with the California Secretary of State. That is the form that nonprofit organizations need to file every two years. I previously mentioned that form in this post.
Corey Pfaffe, CPA addresses this question at his blog post, Expenses for Wife Attending Conference with Minster:
Is it allowable for a minister to use funds from his professional expense reimbursement plan to pay for the registration of his wife at a Christian conference?
Can the minister and his wife be classified as a “ministry team” and therefore allow such an expense?
Check out his answer and come back for my comments.
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Back already? Good.
Corey Pfaffe, CPA, has a good overview of the employee versus independent contractor issue for local churches. See his post: Church Employee or Independent Contractor.
Professor Pfaffe’s approach at his blog uses a Q&A format.
Notice the question he provides:
My question concerns a church’s categorizing of church employees as independent contractors to avoid paying taxes and workers compensation insurance. Can you shed some light on this?
See something wrong with this picture? (more…)
The Commission on Accountability and Policy for Religious Organizations has announced the members of three panels that will advise the commission.
See my previous comments on the Commission for background here, here, and here.
The Commission’s website can be found here.
A short description of the Commission from their website: (more…)
William Vaughan Company CPAs, reports one of their clients got a fax that seemed to be from the IRS asking for bank account information. See their post and a copy of the fax at: Recent IRS Scam Requests Bank Account Information.
How can you tell this is a scam? That is not how the IRS does things. Very simply, it fails the smell test. (more…)
