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.Â
Category: Time Sensitive Information
New 1023-EZ Form Simplifies Applying for 501(c)(3) Tax-Exempt Status
Today, the Internal Revenue Service released the new Form 1023-EZ application form to reduce processing delays and help small charities apply for 501(c)(3) tax-exempt status more easily.
IRS Introduces Form 1023-EZ
The goal of the streamlined application process is to permit small charities without complex issues to get up and running more quickly. The streamlined application will also permit the IRS to spend less time reviewing applications and more time focusing its energies on monitoring compliance for organizations that have been approved.
IRS Posts Standard Form 1023 Questions
The IRS has posted in links to the questions Exempt Organizations specialists are instructed to ask in relation to various issues raised by applications for exemption and miscellaneous determination requests.
Senate Finance Committee Report Identifies Issues and Proposes Solutions
On June 13, 2013, the Senate Finance Committee released a cooperative, bipartisan report comprised of suggestions on how (and why) to change government regulations on tax-exempt/nonprofit organizations and on the rules of charitable giving. The Committee’s Report set forth a number of issues that need to be addressed in the nonprofit and charitable giving arena, and offer a number of potential solutions.
Carter Law Group Moves to Roosevelt District!
We are thrilled to be out of the office tower and back downtown in a historic building and a walkable neighborhood known as the Roosevelt Historic District.
IRS Releases Inflation-Adjusted Rates for 2011
The IRS has announced new inflation-adjusted rates for 2011. The following highlights the adjusted rates which are of particular interest to nonprofits.
IRS Abandons Plans for Cell Phone Guidance In Anticipation of Legislative Action
In 2009, the IRS published proposed guidance for to help employers determine how to treat employees’ personal use of cell phones (IRS Notice 2009-46). Shulman’s statements are evidence that the IRS halted development of final rules in anticipation that H.R. 390/S. 144, the Modernize Our Bookkeeping in the Law for Employees (MOBILE) Cell Phone Act of 2009 will pass. While the bills have broad support in both the House and Senate, it is unlikely that they will pass as stand-alone bills.
IRS Permits More Organizations to File Form 990-N
The IRS today issued guidance (Revenue Procedure 2011-15) that will allow more tax-exempt organizations to file the simplified e-Postcard rather than the Form 990-EZ or the standard Form 990.
For tax years beginning on or after January 1, 2010, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less will be eligible to file the e-Postcard. Previously, the threshold was set at $25,000 or less. Supporting organizations of any size are still not eligible to file the Form 990-N. So, for the 2010 tax year, the new filing requirements are as follows:
It’s a Medical Marijuana Miracle – Arizona Voters Approve Proposition 203
Following initial reports that the measure had failed, officials announced Sunday that Arizona voters approved Proposition 203, a measure that will legalize medical marijuana, by a razor thin margin of 4,300 votes.
As we have pointed out before ,Proposition 203 requires medical marijuana dispensaries to be formed as nonprofit entities but does not require that they incorporate or that they operate on a tax-exempt basis. Accordingly, we expect most dispensaries to operate as nonprofit corporations that are taxed as for-profits to avoid the burdensome restrictions applicable to tax-exempt organizations.
Guidance from IRS on Cell Phone Rules Is Still Pending
Nonprofits may finally get some relief from the burdensome record-keeping requirements associated with employer provided cell phones. Currently, if an […]
Proposition 203 – Arizona Ponders Allowing Nonprofit Medical Marijuana Dispensaries
Proposition 203 authorizes a limited number of medical marijuana dispensaries to operate in Arizona but requires that they be operated on a not-for-profit basis. However, Proposition 203 does not require these not-for-profit dispensaries to apply for tax-exempt status nor are they required to incorporate.
Tick-Tock – Time Is Running Out For Delinquent 990s
I have blogged about this before, but I thought a reminder was in order. The October 15 deadline for tax-exempt […]
Carter Law Group Recognized by U.S.News – Best Lawyers®
“We are excited to receive the highest ranking from U.S.News – Best Lawyers® “Best Law Firms” rankings. When I made the decision earlier this year to build my own firm so that I could serve clients in new and better ways, I did not expect to receive national recognition this early on.†said Ellis Carter, founder of Carter Law Group. “The distinction of being selected as one of the best nonprofit/charity law firms in the country is a wonderful affirmation that our efforts to serve clients in innovative ways and create a more socially responsible model are working.â€
Small Tax Exempt Organizations: Extension of Time to File Delinquent Form 990s
Two types of relief are available for small exempt organizations – a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard), and a Voluntary Compliance Program for small organizations eligible to file Form 990-EZ , Short Form Return of Organization Exempt From Income Tax. Small organizations required to file Form 990-N simply need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by Oct. 15, 2010.
Under the Voluntary Compliance Program, larger tax-exempt organizations eligible to file Form 990-EZ (but not eligible to file Form 990-N) must file their delinquent annual information returns by October 15 and pay a compliance fee which is between $100 and $500 depending upon the organization’s revenues. Details about the VCP are on the IRS website , along with frequently asked questions.
A Reprieve for Small Nonprofits?
Monday was the deadline for small nonprofits to file overdue Form 990s or face loss of tax-exempt status. Notwithstanding Monday’s deadline , Internal Revenue Service (IRS) Commissioner Doug Shulman said the agency will do what it can for small charities to keep their exemptions in a statement released on Tuesday.
IRS Cyber Assistant: Is it Worth the Wait?
In 2003, the number of applications for exemption had gone up by over 40% with no corresponding increase in the number of IRS Exempt Organization employees. This motivated the IRS to consider how to streamline the application for exemption process to make processing easier for both the IRS and the applicant. The IRS invited a panel of experts from the nonprofit legal community to make recommendations to improve the application process. The panel’s key recommendation was that the IRS revive earlier plans to develop and fund an interactive online Form 1023 filing tool accessible through the IRS website known as the “Cyber Assistant.”
UPDATE: On May 7, 2010, IRS announced in IRS Exempt Organization Update 2010-11, that Cyber Assistant is delayed – no release this year.
May 17 First Major Deadline for New Automatic Revocation of Exemption Penalty
As part of the Pension Protection Act passed in 1996, Congress added a new penalty for tax-exempt organizations that fail to file their annual return for three years in a row. Formerly, the only penalty was a monetary penalty. The new law has upped the ante to impose the ultimate penalty: loss of exemption. The penalty applies to organizations that fail to file Form 990, Form 990-EZ, as well as the relatively new Form 990-N. Form 990-N is a relatively new form that must be filed by tax-exempt organizations whose revenues normally fall below $25,000. Organizations that have their status revoked may apply for reinstatement based on reasonable cause for the failure to file. The first three year period is 2007 through 2009, which means that once the 2010 filing deadline passes for these forms (May 15, 2010 for tax-exempt organizations with calendar fiscal years), organizations that failed to file their Form 990s forms for those three years will automatically lose their tax-exempt status.
Maryland First State to Recognize Socially Responsible “Benefit Corporation”
The benefit corporation concept has some similarities to the L3C model but is geared toward corporations rather than LLCs. Like the L3C, benefit corporations pursue a mission that goes beyond making a profit for owners and investors. Importantly, it also provides legal protection for board members that consider social and environmental issues when making decisions on behalf of the corporation.
Abuse of Charitable Organizations and Deductions included in 2010 Dirty Dozen Tax Scams
Every year the IRS releases its “Dirty Dozen” list of tax scams. The list serves both as a warning of scams for taxpayers to avoid as well as a reminder of the IRS’ investigation and enforcement role. This year, the list includes “Abuse of Charitable Organizations and Deductions” .