Tax exempt organizations

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

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 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

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,

Burnt Offering Rejected

The Tax Court denied a deduction for a house donated to a fire department for burning in a training exercise, saying its value was decreased by restrictions on its disposition to less than the benefit to the owner from its demolition. Theodore Rolfs and his wife, Julia Gallagher, purchased lakefront

IRS Allows More Small Exempt Organizations to File E-Postcard

The IRS has raised the gross receipts threshold for Form 990, Return of Organization Exempt From Income Tax, from $25,000 to $50,000, allowing more tax-exempt organizations to avoid filing a full Form 990 or 990-EZ (Revenue Procedure 2011-15). Tax-exempt organizations are generally required to file either a Form 990 or

IRS Issues Final Regulations on Tax Shelter Excise Taxes

The IRS and Treasury Department issued final regulations under IRC § 4965 for excise taxes on tax-exempt entities that enter into prohibited tax shelter transactions and on their managers who approve such transactions or have reason to know that they are prohibited tax shelter transactions. Certain tax-exempt entities such as

Line Items

IRS PROPOSES PTIN FEES The IRS proposed (REG-139343-08, issued July 23, 2010) to begin charging all authorized tax preparers a $50 user fee to obtain or renew annually a preparer tax identification number (PTIN). The fee would be on top of a fee charged by a third-party vendor that will

Best Practices for Exempt Organizations and Form 990

Tax-exempt organizations required to file federal Form 990, Return of Organization Exempt From Income Tax, which was expanded and revised beginning in 2008 tax years, now have some experience with the new requirements. They may have experienced much anxiety as they and their CPAs learned that the new Form 990

IRS Provides Relief for Small Tax-Exempt Nonfilers

The IRS announced that is providing relief for small tax-exempt organizations that are supposed to automatically lose their tax-exempt status because they failed to file Forms 990-EZ or 990-N for the years 2007, 2008 and 2009. Under a special one-time program, the IRS is giving those organizations until Oct. 15

Closing Up Shop: How to Successfully Shut Down a Private Foundation

The precipitous drop in wealth in the United States during the 2008–2009 financial meltdown accelerated a trend of many private foundations’ considering closing their doors. Foundations gave 8.4% less in grants in 2009 from the year before, as the value of their assets fell by 17.2%. Between 2007 and 2008,

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