Tax exempt organizations

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

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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,

QSub Bank's Tax-Exempt Bond Expense Deductible

The Seventh Circuit Court of Appeals held that a bank organized as a qualified S corporation subsidiary (QSub) could deduct in full its interest paid to acquire tax-exempt bonds, reversing the Tax Court. As a general rule, expenses related to producing tax-exempt income, including interest, are nondeductible. Therefore, IRC §

Automatic Revocation of Tax-Exempt Status to Start Monday

Monday, May 17, is the deadline for calendar-year tax-exempt organizations to file a Form 990 for 2009. It also marks the third filing deadline under the mandatory filing requirement instituted by the Pension Protection Act of 2006 (PL 109-280). Under the terms of that mandatory filing requirement, tax-exempt organizations that

Ninth Circuit Says Exempt Organization Late-Filing Penalty Amount Is Mandatory

The Ninth Circuit Court of Appeals held that courts and the IRS have no discretion to reduce the amount of the late-filing penalty for tax-exempt organizations under IRC § 6652(c)(1)(A), overruling a district court decision (Service Employees Int’l Union, docket no. 07-17256 (9th Cir. 3/17/10)). The Service Employees International Union

IRS Issues 2009 Form 990; Explains Significant Changes

The IRS has issued final 2009 versions of Forms 990 and 990-EZ, as well as their instructions. The IRS has also provided a detailed explanation of significant changes to the forms. Form 990, Return of Organization Exempt From Income Tax, was extensively revised for 2008. The new Form 990 is

An Update on Accounting for Uncertainty in Income Taxes

Preparers of private company and not-for-profit organization financial statements will have to implement provisions of Topic 740 of the FASB Accounting Standards Codification (ASC) relating to accounting for uncertainty in income taxes (formerly FASB Interpretation no. 48, commonly known as FIN 48) for annual financial statements for periods beginning after

Two Easements, Two Outcomes

The Tax Court decided two cases involving conservation easements with mixed results for the taxpayers. In one case, the court held that the taxpayer was entitled to a charitable deduction for easements on two properties, since the easements were exclusively for conservation purposes. According to the court, the easements preserved

Final Regs Issued on E-Postcards

The Pension Protection Act of 2006 introduced a new notification requirement for small tax-exempt organizations that are not required to file an annual information return under IRC § 6033(a)(1). In July, the IRS released final regulations spelling out what small tax-exempt organizations must do to meet this requirement. Practitioners should

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FBAR FILING EXTENDED FOR SOME The IRS extended for certain taxpayers the due date for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for tax year 2008. The reporting form originally was due June 30 this year. In Notice 2009-62, the Service said two types

IRS Issues e-Postcard Regs

The IRS issued final regulations (TD 9454 adding new Treas. Reg. § 1.6033-6) Wednesday describing how and when small tax-exempt organizations may file Form 990-N (“e-Postcard”). The e-Postcard is how certain organizations must electronically submit basic information required annually by IRC § 6033(i)(1), as amended by the Pension Protection Act

Other Routes to Transparency

I would like to submit my name as being less than enamored with the new Form 990 that the IRS has visited upon hapless not-for-profits. I noticed that your article “The Redesigned Form 990” (March 09, page 72) featured the use of the buzzword “transparency.” It seems that any reporting

IRS Alternative Dispute Resolution Programs

The IRS recently extended its fast track settlement program to certain exempt and government entities and announced the establishment of a two-year test of mediation and arbitration procedures for offers in compromise and trust fund recovery penalty cases under the jurisdiction of the Office of Appeals. TEGE FAST TRACK The

Democrats Keep Exemption

In the waning days of the Bush administration, the government ended its long-running effort to retroactively revoke the tax-exempt status of a Democratic Party-affiliated organization that it claimed had improperly promoted the party’s candidates. In 1985, prominent members of the Democratic Party including then-Gov. Bill Clinton formed the Democratic Leadership

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