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Nonprofit Lobbying – Don’t forget to Register

Tax-exempt organizations (other than private foundations) have the ability to influence legislation either as an insubstantial part of their activities or by making the 501(h) election and measuring their lobbying expenditures. However, state and federal laws often require principals and their lobbyists to register prior to engaging in lobbying and file expenditure reports.

October 17, 2011 No Comments

Starting a nonprofit

Now is the Time to Review Worker Classification

The IRS has announced a new relief program for employers that choose to come forward before they are audited by the IRS. This relief comes in the form of a voluntary program that permits employers to reclassify their workers and avoid being audited on payroll taxes related to misclassified workers for prior years. The program is known as the Voluntary Classification Settlement Program (Settlement Program).

September 29, 2011 No Comments

Starting a nonprofit

Employer Provided Cell Phones

From now on no part of the use of an employer provided cell phone will be treated as taxable income to the employee so long as it is provided primarily for business reasons. Instead, the business use of the cell phone will be considered a working condition fringe benefit or, a benefit where, if the employee were to pay for such property or services, such payment would be allowable as a deduction. In addition, personal use of the employer-provided phone will be considered a de minimus fringe benefit or a benefit in which the value of the property or service is so small as to make accounting for it unreasonable or administratively impracticable. The new rule applies to any use of an employer-provided cell phone occurring after December 31, 2009.

September 14, 2011 No Comments

New Form 8940 for Miscellaneous IRS Approval Requests

The IRS has released a new form for tax-exempt organizations to use when they request determinations (other than initial exemption applications) about their tax-exempt status.

August 8, 2011 No Comments

Nonprofit Tax

Nonprofit Law Jargon Buster – What is Unrelated Business Income?

Even if you end up having to pay some tax on it, having more income is always a good thing. The primary challenge for tax-exempt organizations is ensuring its unrelated business income is maintained within a relatively safe range of its overall exempt activity. It is acceptable for a tax-exempt organization to operate an unrelated business so long as operating the unrelated business is not its primary purpose. Unfortunately, there is no crisp test for determining when this threshold has been crossed. In determining whether the unrelated business has morphed into the organization’s primary purpose, all of the circumstances must be considered including the size and extent of the organization’s exempt purpose activities.

August 1, 2011 No Comments

Grantmaking and Gift Planning

How to Capture Those Elusive Grants – Part 1

The trouble with obtaining grants from foundations is that you either have to be very well known, like a children’s hospital or a well-established school, or you have to have a very strong in. Most non profits, especially new ones, typically have neither. However, if your program is fulfilling a compelling need in a new and creative way, you may still attract those elusive grants.

July 23, 2011 No Comments

News and Avoiding Scams

Deductions for Nonprofit Volunteers

The Court reasoned that the most important consideration in determining deductibility of unreimbursed expenses is whether or not the volunteer work causes or necessitates the expense. If the expense is incurred solely in connection with one’s duties as a volunteer, such as buying food for a foster pet, the expense is deductible. If, however, the expense is one that would have been incurred regardless of one’s duties as a volunteer, such as repairs or insurance for a car that is used for personal transportation as well as transportation related to volunteer duties, the expense will be considered to have been incurred regardless of any volunteer service, thus it is not a deductible expense.

July 6, 2011 No Comments

Relief for Revoked Nonprofits

Today, the IRS has made public the long awaited list of organizations that automatically lost their tax-exempt status due to their failure to file a Form 990, 990-EZ or 990-N for three consecutive years. The IRS announced that it has revoked the tax-exempt status of approximately 275,000 such organizations, including over 4,000 in Arizona.

June 9, 2011 No Comments

Nonprofits and the Work Made For Hire Doctrine

[T]o determine who owns a commissioned work, an employer must first determine whether the creator of the work is an employee or an independent contractor. Generally, if the creator of the work is an employee, there is a presumption that the employer owns the copyright. If the creator of the work is an independent contractor, the presumption is that the independent contractor owns the copyright unless there is a work made for hire agreement and the work falls into one of the nine categories of commissioned works.

June 1, 2011 No Comments