Tax exempt organizations

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

Line Items

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

The Redesigned Form 990

Most nonprofit organizations are now reviewing their first redesigned IRS Form 990 and its many new information requirements designed to enhance transparency and accountability. CPAs with nonprofit clients now are seeing the pieces fit together with satisfaction or, if drawing together the information has been difficult, perhaps with some concern.

New Single-Member LLC Reporting Reqiurements

Many tax-exempt organizations have formed single-member limited liability companies (SMLLCs) as integral parts of their entity structure. SMLLCs enjoy flexible treatment for tax purposes, limitation of liability, easy transferability of ownership interest by sale or exchange, and separate governance and management. As a result, they are widely used to conduct

Comments on Selected Parts of the New Form 990 and Schedules

Editor's note: This is a sidebar to "The Redesigned Form 990: Advising Nonprofit Organizations," March 09. Part I provides a snapshot of the entire organization because it summarizes the income statement and balance sheet on the first page. It also asks for a description of the organization’s mission. Since this

Reporting Unrelated Business Income

With the United States officially in a recession, state and federal funding sources on which charitable organizations rely are drying up. In addition to funding cuts, charities are struggling with across-the-board expense increases while trying to serve a broader charitable population. Colleges and universities are seeing a marked increase in

No Good Deed Goes Unpunished

A volunteer president of the board of directors of a nonprofit day care center was held personally liable for the day care’s payroll taxes and therefore was not entitled to a refund of the taxes he paid on behalf of the organization. The Seventh Circuit Court of Appeals rejected the

Line Items

CONGRESS TRUMPS SUPREME COURT In Announcement 2008-103, the IRS provided procedures and guidelines for claiming refunds of excise tax paid by domestic coal producers and exporters on exported coal. The guidance was in response to an extension by Congress of the tax years for which refunds may be claimed, to


6 key areas of change for accountants and auditors

New accounting standards on revenue recognition, leases, and credit losses present implementation challenges. This independently-written report identifies the hurdles that accounting professionals face and provides tips for overcoming the challenges.


How tax reform will impact individual taxpayers

Amy Wang, a CPA who is a senior technical manager for tax advocacy at the AICPA, answers to some of the most common questions on how the new tax reform law will impact individual taxpayers.