New Form 1023 Adds Many Questions Focusing on Currently Hot Issues
IRS says answers will reduce need for follow-up and speed decisions on applications for exemption
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Articles
Should Your Organization Elect Under 501(h)?
The "pros" outweigh the "cons" in most cases where a charity engages in significant advocacy.
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How to Figure Lobbying Limits Under 501(h)
Public charities may spend up to $1 million on lobbying activity if it does not exceed the percentage limits established by the law
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Charities May Not Participate in Elections
Although the Tax Code permits insubstantial lobbying activity, it provides an absolute prohibition on participation in election campaigns
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IRS Gives Guidance on Advertisements That Constitute Section 527 Political Activity
Certain nonprofits must either report or pay tax if they go beyond issue advocacy to electioneering
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Here's the Background on §527 Political Funds
Congress considers legislation to curb the secrecy that results when nonprofit funds avoid federal election campaign laws
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Outflanking Foundations’ Public Charity Defense
Private foundations may make grants to groups which are not public charities if they exercise "expenditure responsibility" in approving, monitoring grants
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Foundations Avoid Excess Business Holdings
Private foundations may be subject to tax if they and their disqualified persons hold too much stock in a business functionally unrelated to the purpose of the foundation
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Private Operating Foundations Are Hybrids
Organizations which are not publicly supported but use most of their assets and income in the active conduct of their charitable activities avoid some private foundation limitations.
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Terminating Private Foundations May be Tricky
If foundations are going out of business, they may distribute their assets to certain public charities; if they want to continue, they might become publicly supported themselves
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Calculating Public Support Percentage
Section 509(a) sets the rules for qualification as public charities; the rules are significantly different for 509(a)(1) and 509(a)(2)
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Conversion Foundations Face Key Issues Early
The process of thinking through the preliminary questions is critical for obtaining legal and public approval and benefiting the community after the sale of charitable assets.
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Donor Advised Funds Still Compare Well with Private Foundations
Pension Protection Act imposed new limitations but absolute control of foundations has costs and other limits
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New “Core Form” 990 Presents Revised Look for Nonprofit Finances
Form Requires substantial additional disclosures Still retains numerous traps for the unwary
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New Form 990 Will Greatly Expand Reporting Requirements for Nonprofits
It still offers an important public relations opportunity, but many Boards will have to adopt new policies to look good
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Small Nonprofits Must File E-Postcard to Retain Exemption
IRS issues Regs for new requirements; groups with revenue up to $50,000 may file Form 990-N
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IRS Provides Interim Guidance On Pension Act Provisions
Standards given for foundation grants to SOs, applicability dates, disaster relief funds, and scholarships
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New Form 990 Offers Greater Chance To Promote Program Accomplishments
Charities would do well to review tax return from the point of view of prospective donors before filing
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IRS Explains Common Mistakes on Form 990
As returns become instantly available online, more standardized and reliable data will help the public compare organizations to see if contributions are being used effectively
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Form 990 Offers a Public Relations Opportunity
Charities can utilize tax return to showcase programs and avoid embarrassment if they take the reader’s perspective
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