To close the year, here are links to some of the most popular posts from 2013 (in chronological order): CalNonprofits: Step by Step Guide for Starting a Nonprofit 10 Issues to Address in Your Nonprofit's Social Media Policy Starting a Nonprofit: 10 Considerations in Electing the Initial...
IRS & FEDERAL TAX ISSUES
Proposed Guidance for 501(c)(4) Social Welfare Organizations
On November 29, 2013, a Notice of Proposed Rulemaking by the Internal Revenue Service was published in the Federal Register containing proposed regulations that provide guidance to tax-exempt social welfare organizations on political activities related to candidates that will not be considered to promote social welfare. A 501(c)(4) social...
Hearing on the IRS Exempt Organizations Division Post-TIGTA Audit
The House Ways and Means Oversight Subcommittee held a hearing on September 18 to review the audit of the Internal Revenue Service Exempt Organizations Division and question the acting chief of the IRS Danny Werfel. Here are some links and excerpts of articles covering the hearing: Rep. (R-LA)...
Unrelated Business Income Tax Explained
In order to qualify as a tax-exempt organization under IRC Section 501(c)(3), an organization must be operated primarily for tax-exempt purposes. This parameter allows such nonprofit organizations to engage in a limited amount of business activity unrelated to the organization’s exempt purposes. Although a public charity generally does not...
IRS Offers Fast-Track Determination Process for 501(c)(4) Applicants
It would have been difficult to avoid the onslaught of news and related commentary over the last couple of months regarding the IRS scandal involving the criteria used to identify tax-exemption applications for review. But it now looks like the IRS is taking steps to overhaul its internal...
Treasury Inspector General Report on IRS “Scandal”
On May 14, 2013, the Treasury Inspector General for Tax Administration released its report on the IRS targeting of conservative groups in reviewing applications for exemption under Section 501(c)(4) of the Internal Revenue Code. The report, Inappropriate Criteria Were Used to Identify Tax-Exemption Applications for Review, and problems will...
IRS/EO apologizes for improperly targeting conservative groups
Earlier today, Lois Lerner, the director of the Internal Revenue Service Exempt Organizations division, apologized for the acts of its employees in singling out the exemption applications of Tea Party and other conservative groups for extra scrutiny. The IRS added in a statement that such mistakes "were in no way...
IRS Report Focuses on Issues with Nonprofit Unrelated Business Income and Compensation
On April 25, 2013, the IRS released its Colleges and Universities Compliance Project Final Report (revised May 2, 2013), which stated the Service's plan to look at how nonprofits across the sector report unrelated business income (UBI) and use comparability data in setting compensation. The Report's Executive Summary concluded:...
Applying for Tax-Exemption Retroactive to the Date of Formation
Generally, an organization applying to the IRS for recognition of 501(c)(3) status retroactive to the date of its formation must file a properly completed and executed (signed) Form 1023 within 27 months after the end of the month in which it was formed. So, an organization formed on January...
Transitional Relief for Small Organizations – End of Year Deadline
When the Internal Revenue Service announced in June 2011 that approximately 275,000 exempt organizations had lost their exempt status under a provision of the Pension Protection Act of 2006 for a failure to file three consecutive annual information returns, it also provided guidance for organizations seeking to obtain reinstatement...