The IRS has revised Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions which went into effect January 10, 2018. The $275 1023-EZ user fee remains the same. The changes are designed to reduce filing errors and increase compliance with respect to those eligible to file Form 1023-EZ. Form 1023-EZ filers must now complete the following:
Good News for Nonprofits Moving to a New State
The IRS recently issued a favorable ruling for nonprofits looking to move their domicile from one state to another. Common reasons that nonprofits seek to change their state of incorporationinclude a change in physical location, increasing regulatory burdens, or a lack of meaningful connection to the original state of incorporation. In such cases,
Tax Cuts and Jobs Act – Tax Exempt Organization Provisions
he Tax Cuts and Jobs Act (HR 1 ) is on its way to the White House for President Trump’s expected signature before the weekend. The bill is set to bring about widespread changes to the US tax code for both businesses and individual Americans. However, it also impacts tax-exempt organizations.
Gifts That Do Not Qualify for the Charitable Deduction
Not every contribution to a charity qualifies for a charitable deduction. Charities that misunderstand the rules can lead donors astray when they offer tax receipts for non-deductible gifts inadvertently damaging donor relationships.
Moving a Nonprofit to Another State
Nonprofits leaders often desire to move their nonprofit organization’s legal domicile from one state to another. Leadership may decide to move and wish to take the organization with them. In cases where the work is dispersed around the country, the organization may become frustrated with burdensome regulation in the state where it is domiciled and decide shop for a more favorable legal home.
Proposed Changes to Form 1023-EZ
On September 28, 2017, the IRS Tax Exempt and Government Entities division released its FY 2018 work plan. Of interest to nonprofits and their advisors, the IRS is planning to make changes to Form 1023-EZ early in 2018. These changes are in response to the concerns of stakeholders regarding whether the 1023-EZ process requires too little information.
The Combined Federal Campaign – A Valuable Fundraising Tool for Eligible Charities
To be eligible for the CFC, national and international charities must provide services, benefits, assistance, or conduct program activities in 15 or more different states or one or more foreign countries over the immediately preceding 3 calendar years.
Nonprofit Law Jargon Buster – What is a “Registered Agent”?
Nonprofits corporations are required to have a registered agent in their state of domicile and in each state where they are registered to do business. The purpose of a registered agent is to ensure that there is a place with a street address (as opposed to a P.O. Box) where an organization can be contacted or served with notice of a lawsuit or other legal action.
Sharing Employees
When affiliated nonprofits work closely together, it is often cost effective to have some shared staff. When structuring shared staffing arrangements, it is important to carefully consider and document how costs will be allocated between the organization. Common arrangements include employee leasing and employee loan arrangements.
Winos Rejoice! Arizona’s New Liquor Laws for Charities
Charitable organizations in Arizona may serve and auction alcohol at fundraising events provided that they obtain the necessary special event licenses. Additionally, civic organizations, religious organizations, and fraternal organizations in existence for more than five years with regular membership are eligible to apply for special event licenses.
Form 990 Deadline for Calendar Year Taxpayers
Today, May 15th is an important tax date for nonprofits whose fiscal year ends June 30th or December 31st. If the organization’s fiscal year ends June 30th, today is the last day to file the federal tax form.
Don’t Gamble with Washington’s Gambling Laws
Gambling activities are a popular way to raise funds for your nonprofit organization. However, under Washington law gambling is illegal unless specifically authorized by statute.
The Johnson Amendment: Keeping Charities Nonpartisan Since 1954
The Johnson Amendment ensures that 501(c)(3) organizations remain above the political fray by withholding exempt status (or revoking it) from organizations that engage in any amount of political activity. Requiring 501(c)(3) organizations to abstain from involvement in political activity ensures that they are able to remain dedicated to their missions without the distraction and divisiveness that partisan politics creates.
Three Sheets to the Wind – Fundraising with Alcohol in Washington
In general, where a charity is holding a public fundraising event, a liquor license is required to sell or serve alcohol. Organizations that have obtained a Special Occasion license may sell spirits, beer, and wine by the individual serving or sell bottles of wine for on premises consumption.
You’re the Chair of the Board – Now What?
At times, issues will give rise to spirited debate among Board Members who each possess valuable yet different skill sets and different points of view. The Chair should make efforts to mediate differing opinions and encourage consensus on actions or policies that represent the best aspects of all points of view.
Creating Joint Ventures with For-Profits
To reduce the risk to the tax-exempt organization, the tax-exempt partner should exercise sufficient power and control over the joint venture’s activities to ensure the joint venture operates in furtherance of its tax-exempt purposes. Tax-exempt organizations must be particularly careful when entering into joint ventures structured as partnerships or LLCs because the IRS attributes the activities of such entities to its owners.
Conflicts of Interest and the Golden Age for Shenanigans
The first step to managing conflicts is the disclosure of conflicts. If decision-makers are not required to disclose their conflicts, then there is no way to ensure that their decisions are not tainted by self-interest. Even the most well-meaning individuals can have their decision-making clouded by competing interests. The only way to ensure conflicts are properly managed is to disclose those conflicts and recuse oneself from the decision-making process when conflicts arise.
How to Combat the Rubber Stamp Board
Rubber stamp boards tend to take a hands off approach to their duties and simply approve everything put in front of them by management without actively participating in deliberation and debate. This approach is dangerous for the nonprofit and the directors.
Court Blocks Overtime Rule
Last Tuesday, a federal judge in Texas issued a nationwide injunction against a new regulation expanding the number of workers who would be eligible for time-and-a-half overtime pay.
Tax Exempts and Washington’s Business and Occupation Tax
Many tax-exempt organizations in Washington are still subject to business and occupation tax at both the state and local level. For B&O tax purposes, nonprofit organizations are generally presumed taxable in the same manner as for profit organizations.