As we’ve previously written in the first post of this series, 501(c)(3) organizations are prohibited from engaging in or sponsoring activities that intervene in a political campaign for public office. However, this does not mean that all individuals associated with such organizations, including employees, volunteers, officers, and directors,...
IRS & FEDERAL TAX ISSUES
The Electioneering Prohibition: A Closer Look
With the election year in full swing, many nonprofits have questions regarding the scope of permissible election-related and lobbying or advocacy activities organizations recognized as exempt under Internal Revenue Code Section 501(c)(3) can engage in. This post will be the first in a series discussing these issues. *** As...
Starting a Nonprofit: Form 1023 or Form 1023-EZ?
Most new charitable nonprofits other than churches will seek 501(c)(3) recognition from the IRS. Since July 2014, qualifying nonprofits have been able to apply for recognition of 501(c)(3) tax-exempt status using either Form 1023 or the much simpler Form 1023-EZ. While Form 1023-EZ has since become the more popular application form,...
Nonprofit Compensation: Tips on Using Comparability Data
Executive compensation can be a tricky area for the board of a nonprofit organization. As we’ve discussed previously, the recommended process for determining the appropriate compensation package for an executive of a nonprofit organization involves conducting a review of what similarly-sized organizations, in the same geographic area, offer their...
Form 990-N Change Effective February 29, 2016
As of Monday, February 29, 2016, the IRS will process Form 990-N e-filings on its own site, which will require filers to first complete a one-time registration form. The following is from the IRS webpage notifying the public of the change: Beginning February 29, 2016, Form 990-N electronic submissions will...
5 Highlights from the ABA Exempt Organizations Committee Meeting 1/29/16
x-144-15 Here are 5 highlights from the American Bar Association Exempt Organizations Committee Meeting held in Los Angeles on January 29, 2016: 1. Form 1023-EZ The IRS Tax Exempt & Governmental Entities Division (TE/GE) disagreed with the critical conclusions made by the National Taxpayer Advocate regarding the level of noncompliance...
How to Start a 501(c)(4) California Nonprofit Step by Step
You’ve got an idea for making the world a better place, and you want to start a 501(c)(4) nonprofit social welfare organization as the means to do so. In contrast to a 501(c)(3) charitable organization, a 501(c)(4) organization may engage in unlimited lobbying in furtherance of its social welfare...
Nonprofit Radio: IRA Charitable Rollover
I’ll be on the first Nonprofit Radio program of 2016 on Friday, January 8, at 10:30 am PT / 1:30 pm ET discussing the IRA Charitable Rollover with host Tony Martignetti. Catch us live on Talking Alternative or a few days later on iTunes. Legislation Until the PATH Act...
PATH Act: 3 Charitable Giving Tax Incentives Made Permanent
Last week, the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”) was passed by Congress and signed into law. Included in the Act were 3 charitable giving incentives that had previously expired on January 1, 2015. Rather than simply extending the incentives retroactively for another year,...
Proposal for a New (and Risky) Way to Substantiate Charitable Contributions
UPDATE 1/7/16: The proposed regulations have wisely been withdrawn. The Treasury Department and IRS are soliciting comments through December 16 regarding the recently proposed rule that would provide donors with another way to substantiate their contributions of $250 or more but at the cost of imposing significant new risks on charities and...