Tax exempt organizations

Ban on political activities: An election-year warning for charities

As the 2012 elections draw near, the IRS is once again increasing its oversight of the ban on political campaign activities by Sec. 501(c)(3) charitable organizations. An IRS work plan (Exempt Organizations 2011 Annual Report & 2012 Work Plan, available at tinyurl.com/bos7pb4) states that, in enforcing the ban this year,

Notice permits charitable contributions to single-member LLCs

In Notice 2012-52, the IRS explained that contributions to disregarded single-member limited liability companies (SMLLCs) wholly owned and controlled by a U.S. charity (as defined in Sec. 170(c)(2)) will be treated as if made directly to the U.S. charity. This rule applies for purposes of the substantiation requirements under Sec.

IRS looks into international activities

Many tax-exempt entities participate in the global economy by engaging in charitable or other exempt activities overseas and/or making foreign financial investments. These activities have drawn attention from the IRS and other federal agencies as they examine the flow of tax-exempt funds around the world. FOREIGN BANK ACCOUNTS The first

New online search tool makes it easier to find information about exempt organizations

On Thursday, the IRS announced that taxpayers can find information about tax-exempt organizations in a new online search tool called Exempt Organizations Select Check (IR-2012-34). The information that is searchable online includes whether the organization: Is eligible to receive tax-deductible contributions. Had its tax exemption automatically revoked for failing to

IRS regulations broaden disclosures of tax-exemption determinations

In response to the D.C. Circuit’s holding that the regulations the IRS had relied on to not disclose rulings denying or revoking organizations’ tax-exempt status violated the disclosure provisions of Sec. 6110 (Tax Analysts, 350 F.3d 100 (D.C. Cir. 2003)), the IRS has issued final regulations amending the earlier regulations

New Form 990 has a few significant changes for 2011

The IRS posted the final 2011 Form 990, Return of Organization Exempt From Income Tax, and instructions on its website. Form 990 has become more and more complex as the role of nonprofit organizations has evolved in the United States. The latest version of the form contains a few significant

Top-hat retirement plans

Tax-exempt entities may establish as many as three types of tax-favored retirement plans. They may, of course, establish qualified retirement plans. They may also establish Sec. 403(b) plans, generally known as tax-sheltered annuities. The tax law treats distributions from qualified plans and tax-sheltered annuities similarly, a treatment generally familiar to

Some Form 990 Filers Have Extension to March 30

In Notice 2012-4, the IRS extended the filing deadline for Form 990 until March 30, 2012, for many tax-exempt organizations with a filing due date during the first two months of the new year. Organizations affected by the extension normally would have a filing deadline of Jan. 17 or Feb.

IRS Clarifies Corporate Governance Questions for Tax-Exempt Organizations

The IRS believes that strong corporate governance leads to increased compliance for tax-exempt organizations. In 2008, the IRS released a redesigned Form 990, Return of Organization Exempt From Income Tax, which requires more comprehensive and in-depth information regarding the organization’s governance, structure, policies and disclosure practices. These changes were formalized

Final Regs Implement Form 990 Changes

The IRS issued final regulations on Sept. 7, 2011, (TD 9549) implementing extensive revisions made in 2008 to Form 990, Return of Organization Exempt From Income Tax. The final regulations provide new threshold amounts for reporting compensation, require that compensation be reported on a calendar-year basis and modify the rules

Tax-Exempt Hospitals and New Reporting Requirements

The Patient Protection and Affordable Care Act of 2010 (PPACA) imposes reporting requirements under new IRC § 501(r) for charitable hospitals regarding the fulfillment of their charitable purpose as tax-exempt organizations. Specifically, if they have not already done so, these hospitals must complete a community health needs assessment and draft

Final Regs Implement Form 990 Changes

The IRS issued final regulations Wednesday (TD 9549) implementing extensive revisions made in 2008 to Form 990, Return of Organization Exempt From Income Tax. The final regulations provide new threshold amounts for reporting compensation, require that compensation be reported on a calendar-year basis and modify the rules requiring information reporting

Deduction for Cat Expenses Get Second Life

The Tax Court permitted a deduction for a taxpayer’s unreimbursed volunteer expenses incurred while caring for foster cats in her home, since they were incurred “incident to the rendition of services” to a qualified organization. The court also held the recordkeeping requirements for cash contributions under $250 should apply to

Common Reporting Errors on Form 990

The redesigned Form 990, Return of Organization Exempt From Income Tax, has been the subject of much discussion since the IRS released it in 2007. As the exempt sector and practitioners have been adjusting to the new filing requirements, areas of confusion have been identified. Earlier this year, an IRS

IRS Issues First Guidance on Nonprofit CO-OP Health Insurers

The IRS issued its first guidance on the requirements for new qualified nonprofit health insurance issuers under IRC § 501(c)(29) and has requested comments on specific issues (Notice 2011-23). The notice clarifies that the IRS is not yet accepting applications for recognition of tax-exempt status under section 501(c)(29) and will

IRS Delays 990 Filing Deadline for Tax-Exempt Hospitals

The IRS on Wednesday announced that certain tax-exempt hospitals will be granted an automatic three-month extension to file their 2010 Forms 990, Return of Organization Exempt From Income Tax (Announcement 2011-20). The automatic extension applies to Forms 990 with a due date before Aug. 15, 2011; the IRS is also

Partnership Interests Aren't Simple Gifts for Charities

Partnership interests (including interests in limited liability entities treated as a partnership) represent a potentially valuable gift to charities and private foundations, but with greater potential complications than gifts of stock. CPAs can alert principals to the following issues. Determine whether the organization has the resources to perform due diligence,

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