Resources

Should my Audit Firm Prepare My Tax Return?

Many nonprofits prefer that the audit firm also prepare the tax return.  Because the audit represents ten times the hours of the tax work (and ten times the fee), selections are often based on the audit personnel without much consideration of the tax department.  For this reason, many firms won’t even bring a member of the tax team to the interview.  If they do, it indicates that the tax person presents very well or will give them some advantage.

How to Design a Request for Proposal (RFP) for Audit Services

A commodity is a basic commercial product where the providers are interchangeable.  The quality is substantially uniform and will only vary slightly between vendors.  However, the quality and service provided by professional accounting firms can and will vary widely.  Some firms will do only the minimum in order to offer low prices, while others will spend the time getting to know and understand your business so they can provide valuable advice and consultation.

Taxpayer-Related Identity Theft

The IRS has launched a new website, Identity Theft Central (https://www.irs.gov/identity-theft-central), providing information regarding how to recognize identity theft, how to take action, and how to protect yourself.

Affinity Agreements and Unrelated Business Income

Many nonprofit tax-exempt organizations maintain lists of donors, members, and other supporters. The list will often include names, titles, employers, phone numbers, physical addresses, email addresses, and additional identifying information. Outside organizations, particularly commercial entities, seek to purchase or otherwise access the mailing list to promote their products.

Employee Classification

In general, employers, including nonprofit tax-exempt organizations, often prefer to classify a worker as an independent contractor rather than an employee. Many states are redefining the classification rules and making it more difficult to classify an individual as an independent contractor. The classification of an individual as an employee or an independent contractor affects the employer’s obligation to withhold taxes...

Advertising vs. Sponsorships

Revenue from advertising the goods and services of another organization is generally unrelated business income (UBI) to a tax-exempt organization, reportable on Form 990 and Form 990-T...

Lobbying and Political Intervention for NONcharitable Nonprofits

Noncharitable nonprofits include all tax-exempt organizations that are not charities: trade associations, social welfare organizations, labor unions, fraternal organizations, title-holding companies, VEBAs, and a variety of others...

Form 990 Tip of the Week

Effective January 31, 2020, nonprofit organizations applying for federal tax-exempt status using Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, must file the form electronically. There is a 90-day transition period during which the IRS will continue to accept paper filings...

Transportation Fringe Benefits

On Friday, December 20, 2019, the President signed the ‘Further Consolidated Appropriations Act of 2020,” retroactively repealing the tax on transportation fringe benefits...