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Nonprofit Tax

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Nonprofit Tax

How to Claim Parking Tax Refunds

On January 21, 2020, the IRS issued guidance detailing how nonprofits can apply for refunds of the repealed “parking tax.” Recall that in December 2017, the Tax Cuts and Jobs Act imposed an unpopular and widely criticized 21% tax on employee transportation benefit expenses incurred by nonprofits. The transportation tax, or “parking tax” as it came to be known, was retroactively repealed in December of 2019. The retroactive nature of the repeal creates an opportunity for nonprofits that paid the tax to seek refunds. 

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Win for Democracy – Federal Court Rejects Change to Substantial Contributor Reporting Requirement

The Service announced in Rev. Proc. 2018-38 that it would no longer require most tax-exempt organizations to report the names and addresses of substantial contributors. The change did not apply to purely public charities exempt under Sec. 501(c)(3). Substantial donor information is currently reported on Schedule B, Schedule of Contributors, of Form 990, Form 990-EZ, Form 990-PF and Form 990-BL. The ruling reduced transparency with respect to substantial contributors and was widely seen as a boon to dark-money forces seeking to influence our elections.

The new Revenue Procedure was swiftly challenged in court. Montana and New Jersey filed suit to challenge the rule change on the basis that the federal data is shared with the states and they rely on the substantial-contributor information in enforcing their own laws. On July 30, 2019, a federal district court in Montana ruled that the IRS violated federal law when it adopted Revenue Procedure 2018-38.

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Fundraising Regulation

Can Non-Profits Earn Business Revenue?

With the market volatility of the last six months, funding sources and non-profits alike may be uneasy given memories of the 2008 recession. Although predicting future macro-economic forces may be impossible, it is always a good idea for 501(c)(3) non-profit corporations to seek to diversify revenue streams to prepare for shifts in funding.

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IRS’ Debuts New and Improved Exempt Organization Search

The IRS has debuted a new and improved exempt organization search page.  Previously, the public could use the IRS’ Select Check tool to lookup an organization by name or EIN. However, Select Check only permitted confirmation of an organization’s tax-exempt status and whether the organization was a public charity or private foundation. 

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