A few weeks ago, the Board of Directors of Pearson Charitable Foundation, the Section 501(c)(3) organization affiliated with the educational publishing company Pearson PLC, announced that it will be closing the Foundation at the end of the year after a decade of operations. According to the Foundation’s website, the...
IRS & FEDERAL TAX ISSUES
Nonprofit Limited Liability Company
A limited liability company (LLC) is a legal form of enterprise, owned by one or more members, that may be organized and operated for a wide variety of purposes, including charitable purposes. One of the major advantages of an LLC is the limited liability protection it offers to its members....
Form 1023-EZ Streamlined 501(c)(3) Exemption Application
On July 1, 2014, the IRS released Form 1023-EZ, a short form online application for small organizations seeking a determination of tax-exempt status under IRC 501(c)(3). For organizations with actual and projected annual gross receipts of $50,000 or less, the new Form will serve to minimize the complexity of applying for exemption. And perhaps...
Form 990 Due Today!
if your nonprofit is on a calendar accounting year, TODAY (May 15th) is the deadline for filing its Form 990 with the IRS. Which forms do exempt organizations file? (IRS) 2010 Tax Year and later (Filed in 2011 and later) Form to File Instructions Gross receipts normally ≤...
Proposed Form 1023-EZ
The IRS recently proposed Form 1023-EZ, a simplified version of Form 1023 for recognition of federal exemption under 501(c)(3) of the Internal Revenue Code. The new form converts Form 1023’s 25-pages into merely 3, creating a less burdensome exemption process for certain qualifying organizations. The goal of the streamlined...
12 Things Nonprofits Should Know About Proposed Tax Reform
On February 26, 2014, Rep. Dave Camp (R-MI), the Chairman of the Ways and Means Committee, released a draft proposal for comprehensive tax reform. The almost 1,000 page document contains significant changes that will affect individuals, for-profit corporations, and tax-exempt entities. Camp’s proposals will likely be debated throughout the...
Retroactive Reinstatement Procedures: Simplified
Generally, most tax-exempt organizations are required to file an annual return or notice with the IRS. Since 2010, the IRS has revoked the exemption of hundreds of thousands of organizations for failing to file the applicable annual return for three consecutive years. Once an organization’s tax-exempt status has been...
UBIT: Advertisements vs. Qualified Sponsorship Payments
Generally, net income from unrelated business activities will be subject to the unrelated business income tax (”UBIT”) if the activity constitutes (1) a trade or business, (2) that is regularly carried on, and (3) is not substantially related to the furtherance of the organization’s exempt purpose. The IRS considers...
IRS Deadline: March 1, 2014 – Who is Your Responsible Party?
Do you know who your organization has reported to the IRS as its responsible party? Your organization should make sure the IRS has the current information by the February 28, 2014 deadline. According to the Instructions to IRS Form 8822-B: Beginning January 1, 2014, any entity with...
Applying for Tax Exemption: Expedited Processing Still Available!
With the publication of Revenue Procedure 2014-4 on January 2, 2014, the IRS announced that determination letter requests (which includes requests included with Forms 1023 or 1024) are not eligible for expedited handling. UPDATE (2/19/14): It turns out that Rev. Proc. 2014-4 was not accurate on this point. The...