Tag Archives: compliance

More Nonprofits Filing Long IRS Form This Year

Darth Tax Evader - photo courtesy of swanksalot, on Flickr

Last year there was a big concern over charities losing their tax-exempt status if they hadn’t filed any annual tax form with the IRS for three consecutive years. This year, more nonprofits face the requirement of filing the longest form, as IRS reduces the filing threshold.

Public nonprofits enjoy a short menu of forms, and your selection is dictated. Whether you file the 990-N (postcard), 990-EZ or full Form 990 depends upon your gross receipts and total assets. Last year, the lengthy, onerous (avoiding temptation to use “taxing”) Form 990 requirement kicked in if your gross receipts were more than $500,000 or total assets were greater than $1.25 million. In 2011, those limits are down to $200,000 and $500,000, respectively. Those are considerable reductions and IRS will embrace more organizations into the 990 filing family.

The postcard is a breeze, asking merely nine simple questions. The 2010 EZ form (filed this year) has 52 questions, plus subparts and 8 schedules. The full 990–may I speak freely on my blog? we’re all adults here–is a bitch. It boasts 12 parts across 12 pages with nearly 200 primary questions plus 15 schedules.

The 990 is a bold, robust effort at oversight and disclosure, with more than a hint of burden, intended to protect the public from those who would absquatulate with charitable dollars. Witness the story of the U.S. Navy Veteran’s Association as evidence that protection requires more than a form.

More nonprofits will file the postcard this year, too. That threshold doubled from 2010, to gross receipts under $50,000. Over that, the EZ or 990 is submitted. That means fewer EZs and more postcards this year from charities whose annual receipts are between $25,000 and $50,000. Good news for small nonprofits.

The rules are all laid out in this IRS chart.

Published In Paper: Charity Registration Compliance

I hope my college and law school professors are paying attention.

My article “State Charity Registration Law Compliance” is published in the journal Taxation of Exempts, January/February 2011 issue. The link is to a scanned pdf because the online version is behind a membership site. Readers of my blog enjoy a complimentary copy.

I caution, it’s not my writing style; I had to adhere to the journal’s. That meant writing phrases like, “It is to be remembered that” and “One may conjecture that.” Your blogger is not accustomed to the passivity and third-personality of a professional journal.

Considerable thanks to my editor, the managing editor of Taxation of Exempts, Bob Murdich. It was touch-and-go in the middle stages, but Bob kept working with me. It must not have been too tortuous, I’m doing another for him on gifts of life insurance.

The reader may pitch the journal with his or her own idea for an article. Information is to be found in the purple box on page 5 of your blogger’s article or here.

What Does Your Charity’s Conscience Say?

19th century charity board in the north aisle of St. Mary (copyright Richard Croft and licensed for reuse under this Creative Commons Licence)
National Public Radio reporting confirms what I have believed for years: IRS does not have sufficient resources devoted to policing the nation’s charities. That means the community must keep itself clean.

In NPR’s coverage, I’m focusing on the blog page where the story is posted. Not the four minute story, but the blog post and its shorter audio interview. A former director of the Service’s Tax Exempt/Government Entities team explains nonprofit examinations and audits aren’t a priority because considerably more money can be recovered from taxpayers and businesses.

That makes all of us in the nonprofit community responsible for operating properly. The buzzwords like accountability, transparency and compliance are well known, nearly cliché, and most of us recognize donors increasingly demand clean operations. That in itself should provide sufficient motivation.

Fear also motivates. If you don’t fear an IRS review because you’re resting on favorable odds, recognize that other interests within government are looking over your shoulder. From your state attorney general and secretary of state to the Federal Trade Commission and Congress, there are ample institutions helping to make sure you do the right thing.

Do you honestly not know what’s right? Do you fear the things you don’t know or understand? Your employees probably know the way. (That’s what I’ve seen for 13 years.) Are you listening to them? (In my 13 years, probably not.) If you prefer, there are thousands of consultants, in all stripes, to help your charity find its course.

Ultimately, it’s a matter of conscience–your charity’s conscience. What does it tell you about the right way to conduct business, to keep its reputation, donors, employees and board out of trouble?

That message is stronger than any IRS can put out.

Nonprofit Radio for Dec. 24, 2010: Charitable IRA Rollover Analysis & Savvy Job Search Strategies

Big Nonprofit Ideas for the Other 95%

Compliance. Board relations. Fundraising. Technology. Volunteer management. Accounting. Finance. Marketing. Social media. Investments.

Every nonprofit faces these issues and big nonprofits have experts in each. Small and medium size nonprofits have Tony Martignetti Nonprofit Radio. Trusted experts throughout the country join Tony to take on the tough issues facing your organization.

Episode 21 of Tony Martignetti Nonprofit Radio for December 24, 2010

Tony talks about the Charitable IRA Rollover Extension: How Does It Work, Who Are Best Prospects & Where To Promote. To get up to speed, take a look at his two blog posts from this week:

Tony’s Guests:

Paula Marks; President, Hire Resources; and Leonora Scala, nonprofit job seeker.

I’m Looking: Savvy Strategies for Your Search:

Leonora, our nonprofit job-seeker, gets continuing advice–including a new resume–from recruiter Paula Marks. We last checked in with them in late October. Paula’s tips will help you in your own search, whether it’s today or in the future.

Here is a link to the podcast: 023: Charitable IRAs and Your Job Search

When and where: Talking Alternative Radio, Friday, 1-2pm Eastern.

You can subscribe on iTunes and listen anytime, anyplace on the device of your choosing.

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Get Promotion Value From Your Charity Registrations

Girl Dropping Coin into Piggy Bank

Your nonprofit has to register in each state where it solicits. That’s the law in every state and D.C. Why not get extra mileage out of the work you put into your compliance?

Standard mileage

  • keeps your officers and board from paying fines
  • gets your IRS Form 990 filled out accurately (it’s signed by an officer under penalty of perjury)
  • protects your organization’s reputation
  • avoids civil or criminal penalties
  • minimizes the likelihood of a gift challenge
  • puts you on the right side of the law

These are important reasons for following state laws, but they’re in the background–which is where you want them. If one of those is all of a sudden front-and-center and capturing your attention, you’ve got a crisis.

To gain extra mileage from your registration work, put it out front on a “We’re Compliant!” web page. List all the states you’re registered in so you get some promotion value out of being on the right side of the laws, operating legally and ethically. Compliance shows you’re protecting your donors from fraud and insuring charitable donations go to charitable purposes. Those are the stated rationales for the web of regulations. So boast about it.

You can’t claim endorsement by states or their officials, that’s crossing the line. But you can certainly brag about your compliance, especially when so few charities are on the right side of the registration laws. You can use the page your organization creates (or one linked to it) to make the mandatory disclosures required by some states.

So shake your tail feathers, flap your wings and crow: “We’re Compliant!”