New from the IRS on Exempt Organizations

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

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

Newsletter from the IRS has several important notices for Nonprofits:

1. Charitable Hospitals: Modern Trends, Obligations and Challenges
2. Reqister Now for Spring Workshops for Small and Mid-Sized Exempt Organizations
3. Revised Procedures for Issuance of Ruling and Information Letters
4. New User Fees for Exempt Organization Matters
5. 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

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

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

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

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

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

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

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.