Religious Law and Consultation

Expanded Minsiterial Exception Case

2012-01-13T13:40:00.001-06:00

On Jan. 11, the Supreme Court issued a ruling in a significant church employment dispute, giving religious organizations wide latitude in hiring and firing clergy and other employees who perform religious duties. In its unanimous decision, the high court explicitly recognized a legal doctrine known as the “ministerial exception.”
The case, Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission, involved the dismissal of a teacher at a Lutheran school in Michigan who performed both secular and religious duties. The teacher argued that she had been fired in violation of laws protecting people with disabilities. Specifically, she claimed that the religious school had retaliated against her for asserting her rights under the Americans with Disabilities Act. But the high court ruled that the ministerial exception trumps anti-discrimination laws. “The interest of society in the enforcement of employment discrimination statutes is undoubtedly important,” Chief Justice John Roberts Jr. wrote for the court. “But so too is the interest of religious groups in choosing who will preach their beliefs, teach their faith, and carry out their mission.” Read more....

Directors personally liable for negligence of a nonprofit board

2012-01-05T08:16:00.002-06:00

Directors and officers must exercise reasonable inquiry, skill and diligence in performing their duties and must have a reasonable basis for their reliance on any information provided them. If it is determined that officers or directors of a nonprofit corporation have not fulfilled their fiduciary duties with respect to the management of the organization, creditors may be able to hold the directors personally liable for the nonprofit’s debts. Read more....

Online Symposium on Consecrated Life

2012-01-02T17:30:00.001-06:00

First Session - January 8, 2012, 2pm ET

A Prophetic Moment: Transforming the Shadow and Bringing Religious Life into the 21st Century

Religious life is a call from God to be a distinct voice in the wilderness. Within this wilderness is shadow material that begs to be uncovered and transformed. Is this the prophetic work that Religious are called to in the 21st century? In light of the vows and the trends of the Church, these shadow elements and their transformational possibilities will be explored.
Presenter: Linda Buck, CSJ is a Sister of St. Joseph of Orange. She is a Licensed Marriage & Family Therapist and holds a Master’s degree from Pepperdine University in Clinical Psychology. She is an Adjunct Professor at Pepperdine University and a Certified Spiritual Director. Linda provides workshops and retreats focusing on the integration of spirituality and psychology.
Register: www.ahereford.org/symposium

IRS on Supporting Organizations and Donor Advised Funds

2011-12-13T08:17:00.002-06:00

The IRS issued a report regarding supporting organizations (SO) and donor advised funds (DAF), including whether contributions to SOs or DAFs should be deductible and/or whether SOs and DAFs should be subject to minimum distribution requirements. This long-awaited report was released by Treasury on December 5 and can be found by clicking here. Based on a quick review of this 100+ page report, there are no recommendations that would seem to require additional regulation beyond those amendments made by the Pension Protection Act of 2006 – the report concludes contributions are generally deductible, and no minimum distribution requirement is necessary.

Social Media Resources

2011-11-23T08:18:00.002-06:00

For a recent presentation, I prepared a series of links regarding the use of Social Media by Religious and Nonprofit organizations. Click here.... I will also be doing the presentation as a webcast next August. You can find more information or register on my website: Click here....

Canon Law Resource

2011-10-19T14:36:00.023-05:00

Amy Hereford has been posting and updating the Canon Law Wiki for about 5 years. It provides a basic online resource for canon law.
A wiki is an online platform that allows multiple editors to contribute to the project. Currently it boasts about a thousand visitors each month from around the globe. Each flag on the map at the right indicates that visitors from that country have used the resource.
You may wish to use the resource the next time you have a canon law question. Writers are also welcome and invited to share their expertise.

Webcast on Associates

2011-10-12T01:16:00.001-05:00

November 15, 2011: Associates of Religious Institutes This one hour webcast will propose models for understanding the evolving relationship of religious institutes and societies to their associates. It will discuss the civil and canonical issues raised and explore best practices. For more information...

Medicare Open Enrollment

2011-10-05T14:33:00.005-05:00

Medicare open enrollment this year is from October 15-December 7. This is for any change to your Part D drug plan or your Medicare Advantage plan (if you have one) which will then become effective on 01/01/12. You may have noticed an increase in advertisements for plans since the open enrollment dates were moved up this year.

Last year, a couple of the Part D drug plans decided to opt out of the Medicare program altogether. If you should receive a letter from your plan stating that they are doing that this year, you may choose another plan.

Reporting employer health care coverage on Form W-2

2011-09-28T15:14:00.002-05:00

An Oct. 31 webinar will explain the Affordable Care Act provision that requires some employers to report health care coverage on Form W-2.
Related links:

IR-2011-31, IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage
Employer-Provided Health Coverage Informational Reporting Requirements: Frequently Asked Questions

IRS Webinar: International Activities of Domestic Charitable Organizations

2011-09-17T14:03:00.003-05:00

View a recording of the IRS Exempt Organizations webinar on International Activities of Domestic Charitable Organizations on IRSVideos.gov.

Small Business Health Care Tax Credit

2011-09-12T13:12:00.000-05:00

News Release IR-2011-90 reminds small businesses, small non-profit organizations and professional service providers that there is still time to claim the Small Business Health Care Tax Credit, and encourages them to find out if they or their clients are eligible to claim the credit on their tax returns as the upcoming filing extension tax deadlines near.

Medicare Preventive Benefits Chart

2011-09-06T16:37:00.000-05:00

The National Council on Aging in conjunction with other sponsors recently developed and distributed a chart that summarizes the preventative benefits covered by Medicare. You may find this to be a helpful reference. Chart....

Online Symposium on Religious Life

2011-08-18T07:11:00.002-05:00

Join us in 2012 for an ongoing, online conversation on emergent Religious Life at the national and local levels. The conversation will be:

National and Local
Online and Face to Face
Interdisciplinary

National Online Forum

In partnership with Giving Voice, four online forums, each convened on a Sunday at 2pm Eastern and lasting about 90 minutes. Presenters, respondants, and participants can particpate from their computers, either individually, or in group settings. By doing an online forum, we are hoping for a participation of members in active ministry who couldn't travel for the event. But it will be flexible enough for small groups to gather in homes or in larger group settings. These groups can then continue the conversation locally and share their insights in an online forum.
For the Call for Papers or to Register ....

Webcast on Immigration

2011-08-02T11:45:00.002-05:00

Webcast on August 16, 2011: Immigration for Religious
This one hour webcast will introduce the law of immigration to those within the institute who are charged with managing religious immigration cases, or need to understand the immigration process so that they can coordinate formation or ministry. See CSJ Ministries Webcast Newsletter or click here to register.

New Group Ruling Letter Issued

2011-07-27T10:05:00.010-05:00

The new Group Ruling letter for tax exemption for the USCCB has been issued. It can be accessed online here..... You will also find copies of the cover letter and the group ruling application.

IRS Webinar

2011-07-20T11:38:00.000-05:00

The IRS will be hosting a webinar on International Activities of Domestic Charitable Organizations on August 4, 2011 at 2 pm ET.

New YouTube Video: How to Get Your Tax- Exempt Status Back

2011-07-07T19:07:00.001-05:00

Did your organization lose its tax-exempt status because it failed to file for three consecutive years? Go to the IRS YouTube channel to watch a video about How to Get Your Tax-Exempt Status Back today.

IRS releases list of 275,000 organizations that have lost exempt status

2011-06-09T18:05:00.001-05:00

The Internal Revenue Service today announced that it has released a listing of approximately 275,000 organizations that under the law have automatically lost their tax-exempt status because they have not filed annual reports as legally required for the past three years. If an organization appears on the list of auto-revoked organizations it is because IRS records indicate the organization has a filing requirement and has not filed the required returns or notices for 2007, 2008 and 2009.
The IRS has issued guidance on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transition relief for certain smaller tax-exempt groups – those with annual gross receipts of $50,000 or less for 2010 and eligible to file Form 990-N, the e-Postcard. The relief allows eligible revoked groups to gain retroactive tax-exempt status and pay a reduced application fee of $100 rather than the typical $400 fee. More information, including FAQs and a Fact Sheet, can be found on the IRS website.

Taxing the Tax‐Exempt Sector—A Growing Danger for Nonprofit Organizations

2011-06-02T10:38:00.000-05:00

A joint project of the Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies in cooperation with the Alliance for Children and Families, Alliance for Nonprofit Management, American Association of Museums, Community Action Partnership, LeadingAge, League of American Orchestras, Lutheran Services in America, and United Neighborhood Centers of America. More information....

Health Insurance Deduction Reduces Self Employment Tax

2011-02-16T15:42:00.001-06:00

In 2010, eligible self-employed individuals can use the self-employed health insurance deduction to reduce their social security self-employment tax liability in addition to their income tax liability. As in the past, eligible taxpayers claim this deduction on Form 1040 Line 29. But in 2010, eligible taxpayers can also enter this amount on Schedule SE Line 3, thus reducing net earnings from self-employment subject to the 15.3 percent social security self-employment tax. More....

IRS Webinar for New Non-501(c)(3) Organizations

2011-02-04T17:07:00.003-06:00

A free Feb. 24 webinar, What New Non-501(c)(3) Organizations Need to Know, will cover meeting your organization’s “operational test,” five ways to avoid jeopardizing your tax-exempt status, annual filing requirements for exempt organizations and tools you can use for tax compliance. Register now.

IRS Updated User Fees

2011-01-20T08:41:00.003-06:00

Exemption application (Form 1023, 1024, or 1028)	User Fee
Organizations with annual gross receipts < $10,000 during preceding 4 years	$400
Organizations with annual gross receipts ≥ $10,000 during preceding 4 years	$850
Group exemption requests	$3,000

For More Information...

Alienation Limit for 2011

2011-01-17T10:20:00.000-06:00

ALIENATION/ADVERSE BUSINESS TRANSACTION LIMITS
The amount which requires the approval of the Congregation for Institutes of Consecrated life and Societies of Apostolic Life in cases of alienation of stable patrimony or business transactions which could have an adverse effect on the patrimonial condition of an institute/society remains at $5,705,000.
This amount applies only to an alienation or a business transaction within the United States. Alienation and business transactions in other countries must follow the amount set for institutes and societies in each particular country or region. [See canon 638.3].
Informational Note:
Alienation: the present tax usually charged for approval of an alienation is .1% of the actual selling price. Payment must be made in euros and presented to the Congregation prior to receiving the document of approval. Up to now, wire transfers have not been acceptable.
Adverse Business Transaction: the tax now charged seems to be 50 euro.

990 Filing Threshholds for TY-2010

2011-01-08T12:17:00.002-06:00

Organizations with gross receipts normally < $50,000 must file Form 990-N (but may choose to file a complete Form 990 or Form 990-EZ). Formerly < $25,000.
Organizations with gross receipts > $50,000 and < $200,000 and total assets < $500,000 must file Form 990-EZ or a complete Form 990.
Organizations with gross receipts < $200,000 or total assets < $500,000 must file Form 990.
As always, private foundations must file Form 990-PF.

New on the 2010 Form 1040

2010-12-21T11:38:00.004-06:00

This post summarizes important tax changes that took effect in 2010. The changes are discussed in greater detail here.

Changes are also discussed at IRS.gov. Click on Forms and Publications and then on Highlights of Recent Tax Changes.

Due date of return. File Form 1040 by April 18, 2011. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia — even if you do not live in the District of Columbia.

Limits on personal exemptions and overall itemized deductions ended. For 2010, you will no longer lose part of your deduction for personal exemptions and itemized deductions, regardless of the amount of your adjusted gross income (AGI).

Self-employed health insurance deduction. Effective March 30, 2010, if you were self-employed and paid for health insurance.

Standard deduction increased. The standard deduction for some taxpayers who do not itemize their deductions on Schedule A of Form 1040 is higher in 2010 than it was in 2009. The amount depends on your filing status. In addition to the annual increase for some taxpayers due to inflation adjustments, your 2010 standard deduction is also increased by:

Any state or local sales or excise taxes you paid in 2010 on the purchase of a new motor vehicle after February 16, 2009, and before January 1, 2010, and
Any net disaster loss you had in 2010 because of a disaster that was declared a federal disaster after 2007 and that occurred before 2010.

You can use the 2010 Standard Deduction Worksheet in chapter 20 of publication 17 to figure your standard deduction. But to increase your standard deduction by taxes paid on the purchase of a new motor vehicle or a net disaster loss, you must use Schedule L (Form 1040A or 1040) and attach it to your return.
Congress was considering legislation that would provide an increased standard deduction for real estate taxes or for a net disaster loss from a disaster occurring in 2010. To find out if this legislation was enacted, and for more details, see Schedule L (Form 1040A or 1040) or check www.irs.gov/formspubs.

Roth IRAs. Beginning in 2010, you can make a qualified rollover contribution to a Roth IRA regardless of the amount of your modified AGI.Also, half of any income that results from a rollover or conversion to a Roth IRA from another retirement plan in 2010 is included in income in 2011, and the other half in 2012, unless you elect to include all of it in 2010. See Publication 17 chapters 10 and 17.

Standard mileage rates. For 2010, the standard mileage rate for the cost of operating your car for business use is 50 cents a mile. See chapter 26. For 2010, the standard mileage rate for the cost of operating your car for medical reasons is 16½ cents a mile. See chapter 21. For 2010, the standard mileage rate for the cost of operating your car for determining moving expenses is 16½ cents a mile. See Publication 521, Moving Expenses.

Personal casualty and theft loss limit. Each personal casualty or theft loss is limited to the excess of the loss over $100 (instead of the $500 limit that applied for 2009). In addition, the 10%-of-AGI limit generally continues to apply to the net loss. See Publication 17 chapter 25. To find out if legislation was enacted to increase limits, see the 2010 Instructions for Form 4684.

Expired tax benefits. The following tax benefits have expired and are not available for 2010:

Deduction for educator expenses in figuring AGI.
Tuition and fees deduction in figuring AGI.
Deduction for state and local general sales taxes.
The exclusion from income of up to $2,400 in unemployment compensation. All unemployment compensation you received in 2010 generally is taxable.
The exclusion from income of qualified charitable distributions made from IRA accounts.
Government retiree credit.
Extra $3,000 IRA deduction for employees of bankrupt companies.
Certain tax benefits for Midwestern disaster areas, including increased Hope and lifetime learning credits and the additional exemption amount if you provide housing for a person displaced by the Midwestern storms, tornadoes, or flooding.
Credit to holders of clean renewable energy bonds issued after 2009.
The allowance of certain credits against the AMT, credit for nonbusiness energy property, credit for the elderly or the disabled, lifetime learning credit. For most people, these credits are now limited to your regular tax minus any tentative minimum tax.

For more information....

IRS Releases Draft W-2 Form for 2011; Announces Relief for Employers

2010-10-15T14:32:00.000-05:00

The Service issued draft Form W-2 for 2011, the information return employers use to report wages and withholding. It announced that it will defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011.

The draft Form W-2 includes the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan. The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS will be publishing guidance on the new requirement later this year.

Although reporting the cost of coverage will be optional with respect to 2011, the IRS continues to stress that the amounts reportable are not taxable. Included in the Affordable Care Act passed by Congress in March, the new reporting requirement is intended to be informational only, and to provide employees with greater transparency into overall health care costs.

1099 Misc Changes

2010-10-05T14:06:00.001-05:00

A section of the new healthcare reform legislation impacts the administrative burdens of all business, including religious and nonprofit organizations, though IRS regulations may soften the blow. As of now, beginning with payments made on January 1, 2012, if you pay any person or corporation more than $600 in a year for goods or services, you must report that to both the IRS and the entity or person whom you paid. For example, if you bought office supplies for $1,000, you would have to report that on your income tax returns and issue a 1099 to the company from which you made the purchase. Fortunately, there is now an exemption for credit card transactions, but that doesn’t apply if you paid by cash or check. (Section 9006 of the Healthcare Bill expands Section 6041 of the Internal Revenue Code.)

Note also, for those receiving credit card payments, the new Form 1099-K will be filed with the IRS by payment settlement entities, with a copy sent to the payee. The form is aimed at preventing underreporting of credit card sales by businesses. The forms will be required for credit card payments made after December 31, 2010.

Revocation of Exempt Status

2010-08-19T11:00:00.002-05:00

The IRS has revoked the tax-exempt status of an organization based on its finding it was not operated exclusively for exempt purposes because it engaged in the illegal diversion of prizes and proceeds from raffle ticket sales for the personal use of its officers, employees, and/or other private individuals. Letter Ruling 201032048

Relief for Non-Filing Small Tax Exempt Organizations

2010-08-19T08:13:00.002-05:00

Tax-exempt organizations that fail to satisfy annual filing requirements for three consecutive years automatically lose their tax-exempt status. The IRS is providing one-time relief that will allow small exempt organizations to come back into compliance and retain their tax-exempt status even though they failed to file for three consecutive years. If an organization loses its exemption, it will have to reapply to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.

This one-time relief benefits Form 990-N (e-Postcard) and Form 990-EZ filers only. Organizations required to file Form 990 or Form 990-PF are not eligible and are automatically revoked if they fail to file for three consecutive years. Click here.

Charitable Giving Case: Wilkes v Commissioner

2010-05-03T08:24:00.003-05:00

Petitioners' donations to needy individuals are private gifts and are not deductible as charitable contributions. Also, petitioners' contributions to an individual for missionary work in South Africa are not deductible as charitable contributions because petitioners directed the contributions to an organization formed outside the United States. However, petitioners' contributions to authorized agents of a charitable organization and meeting the requirements of section 170 are deductible as charitable contributions. See Wilkes v. Commissioner of Internal Revenue, (USTC, April 22, 2010).

Automatic Revocation for Not Filing Annual Return or Notice

2010-04-29T15:24:00.001-05:00

Most tax-exempt organizations, other than churches, must file a yearly return or notice with the IRS. If an organization does not file as required for three consecutive years, the law provides that it automatically loses its tax-exempt status. Loss of exempt status means an organization must file income tax returns and pay income tax, and its contributors will not be able to deduct their donations. For more information....

Article on Charitable Trust Management / Liability

2010-04-26T08:54:00.004-05:00

The following is taken from the article: Charities In Distress: Governance and Standards In Troubled Times A charity also has obligations to its creditors, but not in abrogation of its duty to its donors. Whether a charity is in bankruptcy or state insolvency proceedings, or is simply trying to determine how to pay the bills, state law will determine the rights of creditors to assets held for charitable purposes. However, not all of a charity’s assets may be made available to pay the claims of creditors. The analysis under the law of the applicable state turns on whether the assets are held in a separate trust, or quasi-trust, whether the assets are held for specific purposes or, if the charity goes out of business, whether the court should apply principals of equity and determine the further use of assets held for specific purposes. A trust for the benefit of a charity will not ordinarily be subject to the claims of creditors, unless it can be revoked by the charity or was created by the charity for its own benefit. A trust created by a third party is generally not available to the claims of creditors. If the charity has ceased to exist, the trust will not fail; rather a state court will determine its further and best uses. Relying on these rules, some charities create separate fundraising entities to insulate those assets from the claims of creditors. Typically, however, an endowment is not legally a charitable trust. Nonetheless, an endowment created by a charity which solicited donors by representing the fund as a permanent fund for specific purposes may be deemed equivalent to a charitable trust and not subject to creditors’ claims. Donor intent, in short, trumps creditors’ claims where the fund is restricted for a particular purpose. Board-restricted assets ordinarily will be subject to creditors’ claims on the theory that they are revocable and self-settled. Also, to the extent that a debt is within the scope of the purposes of the endowment, some part of the endowment may be available to the creditor.

More on the Form 990

2010-02-12T10:50:00.001-06:00

The IRS has finalized the 2009 Forms 990, 990-EZ, schedules and instructions, for filing in 2010-11. Learn about changes made to clarify and modify reporting requirements and find links to the new forms, schedules and instructions on IRS.gov. Click here.

Form 990 Information from the IRS

2010-02-11T07:51:00.001-06:00

Form 990 series returns are required to be filed by most tax-exempt organizations, except for church and government-affiliated organizations. Form 990 is the IRS primary tool for gathering information about tax-exempt organizations, for educating organizations about tax law requirements and ensuring their compliance. Organizations use it to inform the public about their programs. In addition, most states rely on Form 990 to perform charitable and other regulatory oversight, and to satisfy state income tax filing requirements for organizations claiming exemption from state income tax. More Information.

New on Exempt Organizations

2010-01-06T13:24:00.002-06:00

1. Rev. Proc 2010-8: New User Fees Apply to Exempt Organization Matters

New user fees apply to Exempt Organizations exemption applications, ruling requests and other matters for 2010. Consult section 6 of Revenue Procedure 2010-8 to ensure that you include the appropriate fee with your application for exemption or other ruling or determination request.

Applicants for exemption from Federal income tax, other than those filing Form 1023, should be sure to include the revised Form 8718, User Fee for Exempt Organization Determination Letter Request, with their submissions.

2. Revenue Procedure 2010-4: Updated Procedures for Issuance of Ruling and Information Letters

The IRS has revised procedures for for the issuance of ruling letters, information letters, etc., on matters related to Code sections under the jurisdiction of the Commissioner, Tax Exempt and Government Entities.

3. Revenue Procedure 2010-5: Updated Guidance for Issuance of Technical Advice

Revenue Procedure 2010-5 explains when and how Exempt Organizations Technical provides technical advice to area managers and appeals offices regarding exempt organization matters and provides a general update of Revenue 2009-5.

4. Statistical Information of Interest to Tax-Exempt Organizations

Review statistical studies of exempt organizations and individual noncash charitable contributions compiled by the IRS Statistics of Income Division and learn how to download and use EO Master File Data on IRS.gov.

Website Upgrade in Progress

2009-12-21T09:37:00.003-06:00

My regular website is under construction - changing host and domain registrar. It may be hard to access for the rest of the year. Try www.ahereford.com in the interim. See next year's scheduled webcasts:

February 16, 2010: Basic Taxation of Religious - 2010 Update This popular one hour webcast will discuss the preparation of the tax return for religious with taxable income, including an update on 2010 tax issues.

May 18, 2010: Transfer to Another Religious Institute This one hour webcast will examine the process of transfer of a member to another religious institute, including the conditions and effects of the transfer. It will also discuss issues that arise in this process.

August 17, 2010: Civil Structures of Religious Institutes This webcast will examine those civil structures used by religious institutes to carry out their life and work in the civil sphere. Registration Blessed Christmas! Amy

Videos on New 990 - Application Fee Increase

2009-10-15T15:49:00.003-05:00

990 Video Series IRS Exempt Organizations has launched a new case study and video program to help exempt organizations and their tax preparers better understand the newly revised Form 990 series which must be filed for the 2008 tax year. The case study includes a set of facts describing organizational and financial aspects of a hypothetical exempt organization, and a completed Form 990 based on those facts. A video series walks you through key reporting issues common to most organizations required to file Form 990.
User fees will increase for all applications for exemption (Forms 1023, 1024, and 1028) postmarked after January 3, 2010:

$400 for organizations whose gross receipts are $10,000 or less annually over a 4-year period
$850 for organizations whose gross receipts exceed $10,000 annually over a 4-year period
$3,000 for group exemption letters.

A complete schedule of all user fees will be published in the annual procedure released in January 2010.
Cyber Assistant, a Web-based software program designed to help 501(c)(3) applicants prepare a complete and accurate Form 1023 application, will become available during 2010. Once the IRS announces the availability of Cyber Assistant, the user fees will change again:

$200 for organizations using Cyber Assistant (regardless of size) to prepare their Form 1023
$850 for all other organizations not using Cyber Assistant (regardless of size) to prepare their Form 1023.

IRS will announce when Cyber Assistant is available and the effective date of the user fee change. Subscribe to the EO Update to automatically receive an alert that Cyber Assistant is available.

IRS Publication on Group Exemptions

2009-09-25T08:55:00.001-05:00

There is a new IRS publication on group exemptions. This fact sheet provides answers to questions of interest to parent organizations, subordinates and donors.

Charitable Giving Calculators

2009-09-23T16:16:00.002-05:00

Calculators for charitable giving and other information about tax planning for charitable giving are found on the Food for the Poor website. Because of today's economic climate, donations are more necessary, and more complex gifts may be more helpful in meeting needs of charitable organization.

More IRS News

2009-09-11T15:03:00.001-05:00

1. New! On-line Tool to Help EOs Complete 2008 Form 990: Form 990: Getting Started - A Case Study

Thousands of tax-exempt organizations are in the process of gathering information and completing the redesigned 2008 Form 990. This new on-line tool uses a practical example to show organizations how to address key areas of the redesigned Form 990 and Schedules. An organization can compare its own situation to the case study and learn how to properly complete its own form.

Getting Started includes a sample filled-in Form 990 and Schedules A and O, prepared using information about a hypothetical organization's mission, board of directors, financial information and policies. This series of seven, short, on-line videos explain how to complete key sections of the Form 990 and highlights some of the form changes. Find this new on-line resource as well as other resources for 990 filers on IRS.gov

2. New! Mini-Course Provides Overview of Form 990-EZ

Because of changes in filing thresholds, many more organizations are eligible to file Form 990-EZ. To learn whether your organization may file the EZ and to learn more about this shorter, simpler form, watch this mini-course at www.StayExempt.irs.gov.

New from the IRS

2009-09-02T15:15:00.004-05:00

1. Exemption Application User Fees to Change in 2010 User fees will increase for all EO applications for exemption (Forms 1023, 1024, and 1028), postmarked after January 3, 2010. Cyber Assistant, a Web-based software program designed to help 501(c)(3) applicants prepare a complete and accurate Form 1023 application, will become available during 2010. Once Cyber Assistant is made available, user fees for Form 1023 will change again.
2. New Process for Supporting Organizations to Change Public Charity Classification The IRS has modified the procedures for reclassifying section 509(a)(3) supporting organizations as public charities. Announcement 2009-62 updates procedures for such requests to be consistent with new regulations eliminating the advance ruling process.
3. Register Now for Fall Workshops for Small and Mid-Sized 501(c)(3) Organizations These introductory one-day workshops, designed for administrators or volunteers responsible for an organization's tax compliance, will be held in Philadelphia, PA on October 6, 7, and 8, 2009. Get more information and register online.
4. IRS on YouTube? A new IRS YouTube video site and an iTunes podcast site will help taxpayers learn more about tax provisions in the American Recovery and Reinvestment Act.

990 and Church Tax Inquiries

2009-08-08T07:15:00.003-05:00

1. Form 990 Filing Tips and FAQs: Related Organizations
The IRS is providing a series of filing tips and FAQs to help Form 990 filers file a complete and accurate return. Today's Form 990 tips and FAQs address questions pertaining to Form 990 reporting of arrangements between a filing organization and related entities. Schedule R is used to report information regarding related organizations and certain unrelated partnerships. Today's tips also address general reporting requirements for group returns.
2. Proposed Regulations Clarifying Procedures for Authorizing Church Tax Inquiries
The IRS and Department of Treasury have issued proposed regulations under IRC Section 7611 to clarify the procedures for authorizing church tax inquiries and examinations. The proposed regulations replace references to positions that were abolished under the IRS Restructuring and Reform Act with references that are consistent with the statute and IRS's current organizational structure. Written or electronic comments and requests for a public hearing must be received by November 3, 2009.

IRS Educational Materials

2009-07-23T20:12:00.002-05:00

Governance and Tax-Exempt Organizations Materials used as part of a continuing education program for IRS Exempt Organizations personnel on governance and tax-exempt organizations are now available on IRS.gov.

Register Now for Fall Workshops for Small and Mid-Sized 501(c)(3) Organizations These introductory one-day workshops, designed for administrators or volunteers responsible for an organization's tax compliance, will be held in Indianapolis, IN (September 15, 16, and 17) and Philadelphia, PA (October 6, 7. and 8).

Federal Minimum Wage Increase

2009-07-22T20:30:00.001-05:00

The federal minimum wage for covered non-exempt employees rises from $6.55 to $7.25 per hour July 24.

New from the IRS on Exempt Organizations

2009-05-29T09:51:00.002-05:00

Form 990 Filing Tips and FAQs: Governance The IRS is providing a series of filing tips and FAQs to help Form 990 filers file a complete and accurate return. More Information New Information about Mergers and Terminations Most tax-exempt organizations that end their operations, either through shutting down, transferring their assets or merging with another tax-exempt organization, must inform the IRS about the details of the action. Get information about the proper way to inform the IRS about your termination on IRS.gov. New publication.

Voluntary 990 Compliance

2009-01-27T05:50:00.004-06:00

In its 2007 report, the Advisory Committee on Tax Exempt and Governmental Entities (ACT) identified the PPA threat of automatic revocation for failure to file the 990 as a powerful incentive to encourage non-filing tax-exempt organizations to rectify their reporting failures. The ACT recommended that the IRS implement a voluntary compliance program to help bring non-filers into compliance before the automatic revocation process begins, and in FY 2009, the IRS expects to implement an Exempt Organizations Voluntary Compliance Program (EOVCP) to address the concern.

ALSO: In September 2008, the IRS and the Treasury Department issued new regulations that streamlined the approval process for organizations seeking tax-exempt status as publicly supported charities. The new regulations eliminated the so-called “advance rulings” that granted public charity status for an initial five-year period but required exempt organizations to demonstrate, after that period, that they received enough public support to retain their public charity status.

Important information from the IRS

2009-01-13T09:02:00.004-06:00

Newsletter from the IRS has several important notices for Nonprofits:

Charitable Hospitals: Modern Trends, Obligations and Challenges
Reqister Now for Spring Workshops for Small and Mid-Sized Exempt Organizations
Revised Procedures for Issuance of Ruling and Information Letters
New User Fees for Exempt Organization Matters
New Mailing Address for Applications for Exemption

Rather than summarize them here, I'll just direct you to the IRS's newsletter which is a good source of current information for Exempt Organizations.

New Mileage Rates

2008-11-25T07:12:00.001-06:00

The Internal Revenue Service today issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

55 cents per mile for business miles driven
24 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

Nonprofit Mailing Change

2008-10-30T05:54:00.001-05:00

The U. S. Postal Service (USPS) will soon require nonprofit organizations to update their mailing lists as a condition for keeping their discount rate for service. Effective November 23, 2008, addresses on all pieces must be updated within 95 days before mailing through a USPS-approved address update method in order to qualify for the discount for nonprofit mailers. Nonprofit organizations may wish to consider the use of an enhancement service to get change-of-address updates so they may continue receiving the discounted nonprofit mail rate. Other advantages of keeping an up-to-date mailing list include an estimated cost savings of between 7% and 10% on mailings for most organizations each time they send a mailing plus help in maintaining key membership revenue.

New Form 990 - On Line Course

2008-10-24T00:18:00.000-05:00

StayExempt.org, which provides online IRS educational resources for tax-exempt organizations, now features five new mini-courses on the redesigned Form 990. These mini-courses provide information on preparing to file the new Form 990 as well as a walk-through of the entire form and frequently used schedules. Check out other StayExempt mini-courses on topics of interest to exempt organizations as well as the web-based version of our popular workshop on tax basics for small and mid-sized organizations.

Elimination of Advance Ruling Process

2008-10-07T13:43:00.000-05:00

The IRS has issued yet another update to its growing list of revised forms, documents, and policies. No more double applications for newly formed organizations wanting to be recognized as public charities. The old five-year advanced ruling period has been abandoned in favor of a simpler process. A new 501(c)(3) can be immediately classified as a publicly supported charity, not a private foundation. In the organization’s sixth year, it must convince the IRS that it meets the public support test by filing Schedule A of Form 990. More...

Live Workshops and Online Training

2008-09-20T01:03:00.002-05:00

The IRS is offering live one-day workshops designed for administrators or volunteers responsible for an organization's tax compliance will be held in Chicago, IL (October 21, 22, and 23), Detroit, MI (November 18, 19, and 20) and in Memphis,TN (December 2, 3, and 4). More.... StayExempt.org, another IRS project, now features free web-based mini-courses on current topics of interest to exempt organizations. Learn about navigating IRS resources, applying for tax exempt status, the ban on political campaign intervention, foundation classification, and the charitable contribution deduction. Courses on the new Form 990 coming soon. More....

New Employment Law Resource

2008-09-17T10:40:00.002-05:00

The U.S. Department of Labor new FirstStep Recordkeeping, Reporting and Notices Advisor helps employers determine which of the department's recordkeeping, reporting, and notice requirements (including posters) apply to them.

Streamlined Approval Process for New Exempt Organizations

2008-09-08T20:45:00.004-05:00

The IRS issued IR-2008-102 on Sept. 8, 2008; these new temporary regulations will streamline the approval process for organizations seeking tax-exempt status as publicly supported charities. The new regulations do away with the so-called advance rulings that granted public charity status for an initial five-year period but required exempt organizations to demonstrate, after the initial period, that they in fact received a substantial part of their support from public sources to receive a final determination letter. The IRS was able to eliminate the advance rulings process because of the recent redesign of the Form 990, the tax return filed by organizations exempt from federal income tax.

990 Resources

2008-09-03T20:37:00.002-05:00

Links to resources on the new Form 990 for tax year 2008 are available on my website, www.ahereford.org. Continuing updates will be made as resources become available.

New Form 990 Instructions

2008-08-28T07:48:00.002-05:00

The IRS just released new Form 990 Instructions for the 2008 tax year. The new Form 990 consists of an 11-page, 11-part core form that is required to be completed by all organizations that file the Form 990, and Schedules to be completed by those organizations that satisfy the applicable requirements for each Schedule.

Group Ruling Letter for Catholic Organizations

2008-07-09T21:27:00.001-05:00

The group ruling letter for Catholic Organizations has been issued and may be downloaded.

Substantiation and Disclosure Requirements

2008-05-23T11:02:00.005-05:00

The Service revised Publication 1771 - "Charitable Contributions -- Substantiation and Disclosure Requirements," on the federal tax law for organizations such as charities and churches that receive tax-deductible charitable contributions and for taxpayers who make contributions.
United Church of Christ Cleared in IRS Scrutiny
Senator Barack Obama spoke at the United Church of Christ's biennial General Synod at the Hartford Civic Center in June 2007. Subsequently, the IRS launched an inquiry in response to allegations the church may have jeopardized its tax-exempt status by intervening in a political campaign. The IRS concluded its review and determined the appearance did not violate any rules.

Small Business Guidelines

2008-04-30T11:46:00.003-05:00

The IRS has announced several services for small business that may be helpful to non-profits as well:
1) Last week, the IRS announced a campaign to educate new self-employed small business owners about their federal tax responsibilities and about filing Schedule C, Profit or Loss from Business.
2) Social Security’s new online tutorial provides an introduction to Business Services Online. BSO offers step-by-step instructions for 10 business services available online, including: 1) Filing Forms W-2 and W-2c online; 2) Access to Social Security Numbers Verification Service for wage reporting purposes; 3) Information for reviewing and correcting submissions and reports.

Political Activities Compliance Initiative

2008-04-21T01:30:00.002-05:00

The IRS announced its Political Activities Compliance Initiative (PACI) once again will be in effect for the 2008 election season. The PACI program seeks to educate section 501(c)(3) organizations such as charities and churches about the federal law concerning political campaign activity and to enforce the law in this area.

Congressional Research report on EO Political Campaign Activities

2008-04-10T01:49:00.001-05:00

The Congressional Research Service issued a report that discusses the laws regarding political activities of churches, recent IRS inquiries into church political activity, and legislation to repeal the tax code's prohibition.

IRS Resources

2008-03-14T09:31:00.004-05:00

1. Economic Stimulus Payments: How Organizations Can Help
The IRS is encouraging various partners and stakeholders such as charities, churches, employers and governmental organizations to assist in efforts to reach out to those Americans who may be eligible for the 2008 economic stimulus payment but who normally have no requirement to file a tax return.
2. New Exempt Employer's Toolkit
A new page on the IRS website for Charities & Other Nonprofits centralizes federal tax resources commonly needed by tax-exempt organizations that compensate employees.

Economic Stimulus Payments Information Center

2008-03-09T03:04:00.001-05:00

Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment. Find the latest updates at the IRS Information Center on the topic.

IRS Examination of Church Political Activities

2008-03-05T01:14:00.004-06:00

The IRS has notified the United Church of Christ's national offices in Cleveland, Ohio, that the it has opened an investigation into U.S. Sen. Barack Obama's address at the UCC's 2007 General Synod as the church engaging in "political activities." Obama is a church member and was one of 60 members from various fields of culture, academics and business who spoke at the event about the impact of faith on their professional life. See more. See also April Webcast on Speaking Out and Retaining your Exempt Status

Small Exempt Organization - E-postcard

2008-02-26T02:38:00.001-06:00

Small tax-exempt organizations whose gross receipts are normally $25,000 or less may be required to electronically submit Form 990-N, also known as the e-Postcard.
The Pension Protection Act of 2006 added this filing requirement to ensure that the IRS and potential donors have current information about your organization.
Due Date of the e-Postcard The first e-Postcards are due in 2008 for tax years ending on or after December 31, 2007. The e-Postcard is due every year by the 15th day of the 5th month after the close of your tax year. For example, if your tax year ended on December 31, 2007, the e-Postcard is due May 15, 2008. You cannot file the e-Postcard until after your tax year ends.

Supporting Organization Exemption Revoked

2008-02-22T10:46:00.002-06:00

The Service has revoked the tax-exempt status of a section 509(a)(3) supporting organization because 1) it failed to pass any of the three prongs of the relationship test; 2) it failed to support a public charity; and 3) it failed to pass the operational test by conducting any activity in furtherance of its exempt purpose. More information.

2008 Economic Stimulus Act

2008-02-15T12:45:00.004-06:00

The recently passed 2008 Economic Stimulus Act provides a rebate based on income levels. To qualify for the rebate, individuals must 1. Have at least $3,000 in earned income or social security benefits. SSI benefits and patrimony income do not qualify toward meeting this limit. 2. File a 2007 tax return, even if no tax is due. For more information on this topic, see the IRS Fact Sheet or February's webcast which will discuss the preparation of the tax return for religious with taxable income, including filing for the rebate.

IRS Fact Sheets

2008-02-12T02:07:00.000-06:00

IRS Examination and Compliance Check Processes For Exempt Organizations: The IRS has issued a Fact Sheet in which it reviews the variety of tools at its disposal to make certain that tax-exempt organizations comply with federal law designed to ensure they are entitled to any tax exemption they may claim. These include correspondence examinations, field examinations, and compliance checks.
IRS Complaint Process For Tax Exempt Organizations: The IRS has issued a Fact Sheet in which it describes the process by which complaints (also called "referrals") alleging the abuse of the tax exempt status by a organization can be made to the IRS and how they are handled.

Annual Increase in Alienation Limit - Canon Law

2008-02-04T04:52:00.001-06:00

The amount which requires the approval of the Congregation for Institutes of Consecrated life and Societies of Apostolic Life in cases of alienation of stable patrimony or business transactions which could have an adverse effect on the patrimonial condition of an institute/society is raised to $5,475,000. This amount refers to the appraised value not the actual selling price.

E-Card Reminder - Small Nonprofits.

2008-02-01T03:59:00.000-06:00

A new annual electronic filing requirement for certain small exempt organizations is in effect for this year. The filing system will be available in early February. Please check the IRS website then to file an e-Postcard.

Unrelated Business Income Publication 598

2008-01-28T01:59:00.000-06:00

An exempt organization is not taxed on its income from an activity that is substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Such income is exempt even if the activity is a trade or business.
However, if an exempt organization regularly carries on a trade or business that is not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business.
See updated IRS Publication 598 on UBIT.

Final 2008 Form 990

2008-01-13T16:12:00.001-06:00

The IRS issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.

Employers Required to Use New Form I-9’s After Dec 26, 2007

2008-01-03T16:31:00.001-06:00

The U.S. Citizenship and Immigration Services has issued a new Form I-9 used by employers to verify employees’ eligibility to work in the United States. The only acceptable Form I-9 has a revision date of June 5, 2007 (located in the lower left corner of the document.) Employers may download and copy this form at no charge from www.uscis.gov/files/form/i-9.pdf. A free version also may be obtained by calling 1-800-870-3676.
Employers must use the June 5, 2007, Form I-9 for all employees hired on or after November 7, 2007. Employers are not required to redo earlier versions of the form, but must use the new Form I-9 for reverification of employees.
Now that the transition period ended on December 26, 2007 employers will be subject to penalties for using outdated versions of Form I-9.

Transitional Procedures for Type III Supporting Organizations Failing Responsiveness Test

2007-12-28T10:44:00.000-06:00

The IRS has issued transitional relief and filing procedures for certain charitable trusts that fail the responsiveness test for Type III supporting organizations. The procedures are intended for charitable trusts that received a determination recognizing their tax-exempt status under section 501(c)(3) and that met the requirements of section 509(a)(3) until August 17, 2007, and non-exempt charitable trusts described in section 4947(a)(1), that are treated for certain purposes as organizations described in section 501(c)(3), and that met the requirements of section 509(a)(3) until August 17, 2007. More information.

Standard Mileage Rates for 2008

2007-12-06T09:54:00.000-06:00

The IRS has announced optional standard mileage rates for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. The rate for miles driven in service to charitable organizations remains unchanged from the 2007 rate of 14 cents per mile.
(1) Business 50.5 cents per mile
(2) Charitable contribution 14 cents per mile
(3) Medical and moving 19 cents per mile
For more information

IRS Leadership on Exempt Organizations

2007-11-21T02:12:00.000-06:00

Current Climate for Charities - On October 22, 2007, Steven T. Miller, Commissioner, Tax Exempt and Government Entities, addressed the Independent Sector focussing on the current climate for charities.

IRS Role in Evolving Charitable Sector - On November 10, 2007, Steven T. Miller, Commissioner, Tax Exempt and Government Entities, discussed the IRS role in an evolving charitable sector.

Also: New Compliance Guides for 501(c)(3) Public Charities and Private Foundations Issued - These specialized publications for public charities and private foundations provide an overview of activities that could jeopardize exempt status as well as information on recordkeeping, reporting and disclosure compliance requirements.

Tax Considerations in Charitable Auctions

2007-11-02T09:19:00.000-05:00

Have you ever attended a charity auction only to have the well-meaning auctioneer rally the audience by saying, "Come on everybody, it's deductible!" In this updated article, Ronnie C. McClure, Ph.D., CPA, suggests donors, bidders, and charitable organizations may be in for a surprise. Although auctions probably fall more under the category of "spontaneous" than "planned" giving, there are several interesting tax facts you might want know before the next gavel falls.

IRS Announces Priority Guidance Plan for 2007-2008

2007-10-31T07:31:00.000-05:00

IRS has announced its priority issues for the next year, which include several topics related to nonprofits: forthcoming regulations on the new Form 990, the e-Postcard, new requirements for supporting organizations under the Pension Protection Act of 2006, and revocation standards for nonprofits that engage in excess benefit transactions. A full listing of the 2008 IRS agenda is available on their website.

ALSO: Hearing to Examine Whether Charitable Organizations Serve the Needs of Diverse Communities The U.S. House Ways and Means Subcommittee on Oversight explored the extent to which nonprofits are adequately serving diverse communities at a hearing held on September 24, 2007. Witnesses offered examples of their organizations' efforts, while also acknowledging that nonprofit services aren't sufficient to fill many community needs. Testimony will be transcribed and available for review on the House Ways and Means Subcommittee on Oversight website.

Payout Requirements for Type III Supporting Organizations

2007-10-04T09:50:00.000-05:00

The IRS and Treasury have announced proposals regarding the payout requirements for Type III supporting organizations that are not functionally integrated, the criteria for determining whether a Type III supporting organization is functionally integrated, the modified requirements for Type III supporting organizations that are organized as trusts, and the requirements regarding the type of information a Type III supporting organization must provide to its supported organization(s) to demonstrate that it is responsive to its supported organization(s). Full Text - Go to page 753

Online EIN Application

2007-09-27T10:20:00.000-05:00

The IRS announced that taxpayers can request an Employer Identification Number (EIN) (necessary, for example, for a corporation, a trust, or other nonprofit organization) through a Web-based system that instantly processes requests and generates identification numbers in real time. IR-2007-161

Notice on Car Donations

2007-09-20T07:52:00.000-05:00

The IRS has issued Notice 2007-70 which changes where charitable organization that receive gifts of qualified vehicles such as autos, airplanes, and boats with claimed values exceeding $500 are to file a completed Forms 1098-C and 1096 for years ending on or after December 31, 2008. See Instructions.

New Exempt Organization Determination Procedures

2007-08-01T15:18:00.000-05:00

The IRS has issued Rev. Proc. 2007-52, which provides updated procedures for issuing determination letters and rulings on exempt status under sections 501 and 521 of the Internal Revenue Code, effective July 23, 2007. These new procedures will be updated annually.

New Group Ruling Letter for Catholic Entities Available

2007-07-31T12:03:00.000-05:00

The annual group ruling letter for Catholic Entities has been issued and is available on the internet at the following address: http://www.usccb.org/ogc/2007GroupRulingMemo.pdf The cover letter by the USCCB Office of General Counsel provides a helpful update on changes in tax law in 2007.

New Exempt Status Determination Procedures

2007-07-16T13:20:00.000-05:00

Revenue Procedure 2007-52 sets forth the procedures for issuing determination letters and rulings on exempt status of organizations under section 501 and 521 of the Code. It also applies to revocation and modification of determination letters or rulings, and provides guidance on the exhaustion of administrative remedies for purposes of declaratory judgment under section 7428. It will be published in IRB 2007-30 dated July 23, 2007.

New Information Reporting Requirement for Many Nonprofits

2007-07-16T13:18:00.000-05:00

The IRS is mailing educational letters this month to more than 650,000 small tax-exempt organizations that may be required to submit a new annual notice, Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ. Exempt organizations with receipts of less than $25,000 will need to file the e-Postcard in 2008. Get more information in news release IR-2007-129.

IRS: Exempt Organization Developments

2007-07-10T08:56:00.000-05:00

The IRS issued an advance copy of Rev. Proc. 2007-52 setting forth the procedures for issuing determination letters and rulings on exempt status of organizations under sections 501 and 521. These procedures also apply to revocation and modification of determination letters or rulings, and provide guidance on the exhaustion of administrative remedies for purposes of declaratory judgment under section 7428.

In a separate development, the House Ways and Means Oversight Subcommittee will hold an overview hearing on tax exempt organizations according to Subcommitte Chairman John Lewis (D-GA). The hearing will focus on charities and foundations described in Internal Revenue Code section 501(c)(3) and will take place on Tuesday, July 24, 2007, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m. More information.

IRS Unveils New "Life Cycle" Resource Tools

2007-07-07T16:58:00.000-05:00

The IRS website has new information tools ("Life Cycles") to help guide tax-exempt organizations through the federal tax rules that pertain to them. These tools are resources for certain organizations exempt under IRC sections 501(c)(3), (c)(4), (c)(5), and (c)(6). The website provides information about points of intersection between organizations and the IRS with explanatory information and links to forms an organization may need to file with the IRS. Click here.

IRS Releases Discussion Draft of Redesigned Form 990 for Tax-Exempt Organizations

2007-06-21T15:58:00.000-05:00

The IRS released for comment and discussion a draft Form 990, the annual return required to be filed by tax-exempt organizations to report information about their operations. The comment period lasts until Sept. 14, 2007. For details on providing comments, see news release IR-2007-117.

News from the IRS

2007-06-14T16:00:00.000-05:00

1. Comments Requested on Draft Redesigned Form 990 The IRS released for comment and discussion proposed revisions to Form 990, Return of Organization Exempt from Income Taxation. The IRS hopes to have the form ready for use for the 2008 filing year (returns filed in 2009).
2. Report of the ACT The Advisory Committee on Tax Exempt and Government Entities (ACT) has issued a report on project recommendations for the Tax-Exempt and Government Entities Division. The report includes a proposal for an Exempt Organizations Voluntary Compliance Program.
3. Gaming Phone Forum Script The IRS has posted the script from a recent phone forum on "Gaming and Exempt Organizations."
4. Qualified Conservation Easement Guidance Notice 2007-50 provides guidance on new percentage limitations imposed by Internal Revenue Code section 170(b)(1)(E)(iii) on qualified conservation contributions made by individuals.

Political Campaign Activities of Exempt Organizations

2007-06-01T13:12:00.001-05:00

Revenue Ruling 2007-41 provides guidelines for exempt organizations on the scope of the the tax law prohibition of campaign activities by section 501(c)(3) tax-exempt organizations. The ruling sets out 21 factual situations involving 501(c)(3) organizations, including churches, and activities that may be prohibited campaign intervention. In each situation, the ruling applies tax law and regulations and concludes that prohibited political activity has or has not occurred.
The IRS also released its Report on the Political Activity Compliance Initiative for the 2006 election cycle. This report, PACI 2006, follows the report on prohibited political intervention in the 2004 election cycle, which was issued in February 2006.
Links:
http://www.irs.gov/pub/irs-drop/rr-07-41.pdf
http://www.irs.gov/pub/irs-tege/2006paci_report_5-30-07.pdf
IRS Reports on Political Activity Compliance Initiative (2004)

Utilizing Employees as Volunteers

2007-05-28T13:22:00.000-05:00

When employees volunteer in their own workplace, it blurs the lines (factually and perceptually) between employment and voluntary engagement. It can become very difficult to distinguish between what employees do for salary and what they do voluntarily. This article looks at the legal and management implications of allowing staff to volunteer within the same organizational structure. Click here.

Nonprofit Employees and Volunteers

2007-05-23T12:00:00.000-05:00

Fair Labor Standards Act (“FLSA”) provides that true volunteer activities are not impeded or discouraged while minimizing the risk that the FLSA’s minimum wage and overtime requirements were being abused by employers. Amending the act in 1985, Congress made clear that a volunteer may receive “no compensation,” but may be paid “expenses, reasonable benefits, or a nominal fee.” An individual will be considered a volunteer under the FLSA if the individual:
(1) performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation, or receipt of compensation for services rendered; although a volunteer can be paid expenses, reasonable benefits, or a nominal fee to perform such services;
(2) offers services freely and without pressure or coercion; and
(3) is not otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer. This last provision is explored in a newsletter available here.

Type III Supporting Organizations - Attorney Comments

2007-05-17T09:44:00.000-05:00

Attorney Ruth Madrigal of Caplan & Drysdale wrote an open letter to Treasury Tax Legislative Counsel Susan Brown. In it, she discusses how any forthcoming guidance regarding Type III Supporting Organizations that support governmental entities should take into consideration the special circumstances that affect such organizations' abilities to meet the new "functionally integrated" requirements imposed by the Pension Protection Act of 2006. Full Text

Service to Provide Technical Guidance on PPA for TEOs

2007-05-15T11:41:00.000-05:00

Notice 2007-45 provides interim guidance on section 6104(d)(1)(A)(ii) of the Internal Revenue Code, added by the Pension Protection Act of 2006. Section 6104(d)(1)(A)(ii) imposes a new requirement on all organizations exempt under section 501(a) and described in section 501(c)(3) to make available for public inspection a copy of their Form 990-T filed with the IRS. It will be published in IRB 2007-22 dated May 29, 2007.

IRS Guidance on Public Inspection of Form 990-T

2007-05-14T11:40:00.000-05:00

Notice 2007-45 gives interim IRS guidance on section 6104(d)(1)(A)(ii) of the Internal Revenue Code, added by the Pension Protection Act of 2006. The Act imposed new requirement on all organizations exempt under section 501(a) and described in section 501(c)(3) to make their Form 990-T available for public inspection. Full text.

IRS Guidance on Telephone Refund for Churches and Nonprofits

2007-05-11T11:39:00.000-05:00

The annual May 15 filing deadline is here for many nonprofits, and the IRS urges any of these organizations that paid the three percent telephone tax to be sure to request this special refund. The telephone tax refund is also available to churches and small tax-exempt organizations that don’t normally file annual returns with the IRS. Get details and additional links in news release IR-2007-99.

Guidance on Conflicts of Interest

2007-05-09T14:29:00.000-05:00

Council on Foundations Issues Conflicts Guidance. When a foundation shares board members with grantees, is this simply mutual benefit or does it create a conflict of interest? The Council on Foundations has asked its members to ponder this issue, and it shares some of their opinions in a recent article. No surprises here: There are two sides to every story. As long as appropriate precautions are in place, grantees and grantors can all benefit. But if there are any concerns about the perception of favoritism or personal benefits, boards might want to reconsider this practice. Click Here

Foreign Gifts

2007-05-02T14:28:00.000-05:00

The U.S. Department of the Treasury has posted a helpful risk-management grid to guide nonprofit organizations involved in international activities. This tool focuses on grantmaking and is designed to help charities (including foundations) comply with U.S. sanctions that prohibit transactions with suspected terrorists. The grid not only helps identify potential illegal activity or abuse but also serves as an additional due diligence tool. See Guide

Exempt Status Not Affected by Expanding Purposes

2007-04-16T13:30:00.000-05:00

The IRS ruled that the tax-exempt status of a scientific research organization that studies indoor air quality will not be adversely affected when the organization expands its purposes to transform the region where it is located into a leader of environmental research.
Ltr. Rul. 200714026

TY 2006 EO Returns - Significant Changes

2007-04-12T10:07:00.000-05:00

The instructions to the 2006 Forms 990 and 990-EZ and Schedule A incorporate significant changes to address legislation enacted in 2006 and comments received from the public. The following are highlights of the significant changes.
IRS officials have highlighted these changes in two public forums; resources from those events may also be of interest

Telephone conferences conducted on March 21 and 22, 2007. The text of the presentation can be found here.

A Tax Talk Today program highlighting legislative changes to exempt organizations tax law

click here
For more information, click here or see the What’s New section of the form instructions.