Nonprofit finance, accounting, and tax news. Other tidbits of interest to the charity community.
You may think local churches are immune to scandals. In your ministry, perhaps you feel that since you are staffed by sold-out followers of Christ who are passionately committed to your mission, you won’t have any of those kinds of problems.
Allow me to share some of my experiences. (more…)
You may have heard auditors talking about the codification of accounting rules. Well, it isn’t about everything getting fishy. (Bad joke – sorry!) You probably have seen lots of odd comments in the notes to your financial statements. Instead of mentioning FAS Statement #157 when discussing fair value accounting of your investments, your notes now refer to something like ASC 820. What happened? (more…)
In case there was not enough going on for your change-phobic auditor to deal with, all the audit rules are being rewritten. Every one of them. (more…)
More NPOs will have to use the long 990 in 2010 than before. The cutoff for filing a 990-EZ went down in 2009 and will drop again in 2010. More details on this page at http://www.nonprofittaxes.com/
Did you know your 990 for the last two or three years is available on-line? An organization called GuideStar receives an electronic copy of all 990s from the IRS and posts them to the GuideStar web site. With simply a free registration, all of those 990s are available to anyone with internet access. (more…)
Recently, I have been looking at a number of 990s. One thing I have observed with unsettling frequency is that when the form calls for an address of an officer or board member, the address listed looks like a home address. (more…)
One of the most difficult areas for a church to maintain good internal controls is for the offering between the time the ushers collect it and the counters start their count. It is hard to keep controls over the uncounted offering. That is also one of the riskiest areas for a local church.
If you want to look at just one area where there is high risk in your church, check out your procedures for controlling the offering.
Not to worry, there will be a lot of discussion on point in this blog.
You have probably heard this story before, but I will mention it again. When you are pondering how to handle a situation, think about how it would look on the front page of the newspaper. Do you want to see this policy, decision, or personnel action on the front page of the Wall Street Journal®? How about the lead article in the local section of the Los Angeles Times®? The front page of your local paper? (more…)
The healthcare act passed in spring 2010 provides a tax credit to small businesses and nonprofit organizations to assist with the cost of providing health care to employees. The tax credit is available to NPOs with less than 25 full time equivalents that pay over half of the health insurance costs and have less than $50,000 average compensation per person. For those nonprofit employers who qualify, the credit is 25% of healthcare costs and is offset against payroll taxes. There is a phase-out calculation when full time equivalents are over 10 and average compensation is over $25,000. As you would expect, there are detailed rules and requirements.
The IRS has a fact sheet available. They also have a one minute YouTube video. (A YouTube video? From the IRS? Yes, a YouTube video from the tax people.)
Remember this is a brief overview. Check out the IRS information and consult with your tax advisor before you do anything!
Update on 9-7-10 – The IRS announced today that the method of receiving the credit for NPOs will be for those organizations to file a soon-to-be modified 990-T. That is the form used to report unrelated business income and to pay taxes on the UBI. The formwill be modified for the tax credit. Watch for more details in the future.
New accounting rules for mergers and acquisitions of nonprofit organizations are now in effect. In the past, when two nonprofit organizations came together, the accounting was essentially to combine the accounting information of the two entities. This is no longer allowed.
Under the new rules, there are mergers and acquisitions. The accounting for each is quite different. (more…)
Looking for a good introduction to NPO tax issues? Want a primer for your new board members? The IRS has a great web-based course that provides a well designed overview of many tax-exempt issues. (more…)
The IRS has available on their web site a number of short, narrated courses on a variety of topics. They are in PDF format, with each set of slides or entire presentation downloadable. Length is from 7 to 37 minutes.
Courses are available here. Specific classes are:
Presentation 1: Navigating IRS Resources for Tax-Exempt Organizations
Presentation 2: Political Campaigns and Charities: The Ban on Political Campaign Intervention
Presentation 3: The Wonderful World of Foundation Classification (Part I)
Presentation 4: Can I Deduct My Charitable Contributions?
Presentation 5: Applying for Tax-Exempt Status
Presentation 6: Preparing to File the New Form 990
Presentation 7: The Redesigned Form 990 – Part I
Presentation 8: The Redesigned Form 990 – Part II
Presentation 9: The Redesigned Form 990 – Part III
Presentation 10: The Redesigned Form 990 – Part IV
Presentation 11: An Overview of Form 990-EZ
Presentation 12: Disaster Relief – Part I
Presentation 13: Disaster Relief – Part II
Presentation 14: 403(b) Tax-Sheltered Annuity Plans – Employee
Presentation 15: 403(b) Tax-Sheltered Annuity Plans – Employer
Hope you can find something for you!
Barna Research Group surveyed 1,114 Protestant churches in the 4th quarter of 2009 to find out what impact the recession had on them in 2009. (more…)
Nonprofits with revenue under $25,000 per year must file a 990-N at least once every 3 years to avoid loss of tax-exempt status. The deadline for filing the first 990-N, or risk losing exempt status, has been extended by the IRS. Christine Abrams, CPA, has more details.
GuideStar surveyed almost 7,000 NPOs to find out what happened in giving for the first five months of 2010. (more…)