IRS Examination of Church Political Activities

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

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

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

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

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

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.

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

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

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

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.