This quarterly Not-For-Profit Standard includes the following articles:
New Requirements for Tax-Exempt Hospitals; Just The Beginning?
By Laura Kalick, JD, LLM in Tax
The Patient Protection and Affordable Care Act added requirements for tax-exempt hospitals to qualify as charitable organizations under the Internal Revenue Code (IRC). Although the new requirements are very specific to tax-exempt hospitals, all organizations should take note that Congress views tax exemption as a privilege and not a right and that new requirements could be imposed on other organizations in exchange for the benefit of tax exemption. Senator Charles E. Grassley was very much responsible for the new hospital requirements being added to the law on the basis of requiring charitable services to be provided in return for tax exemption.
Click here to read more about the new requirements for tax-exempt hospitals.
Items to Watch...
1099 Provision in Health Care Bill - The Patient Protection and Affordable Care Act included Section 9006 which would amend Section 6041 of the Internal Revenue Code by requiring all organizations to begin reporting payments to corporations and payments for merchandise on Form 1099 beginning in 2012. Both the Senate and the House have passed bills to repeal the 1099 provision and this initiative has the support of the President. However, the parties cannot agree on how to approach the revenue loss that this repeal would create, so this issue remains a topic of debate. We will have to wait and see what the final outcome is and the potential effect this will have.
Click here to read about moreitems to watch in the not-for-profit sector.
Executive Departures: How Good is the Goodbye?
By Michael Conover
Like their for-profit counterparts, tax-exempt organizations routinely encounter situations involving the departure of a senior level executive. These situations range from celebratory endings of successful careers to disappointing departures after things don't work out. The circumstances surrounding them can vary greatly, but departures almost inevitably involve some consideration of compensation/benefit issues.
Click here to read more about executive departures.
Extenders of Interest to Nonprofits: Better Late Than Never
By R. Michael Sorrells, CPA
The fate of various extenders (provisions in the tax law which have never been made permanent) was finally decided by Congress when the 2010 Tax Relief Act was signed by the President on December 6, 2010. The following are those most likely to have an impact on nonprofit organizations:
Unrelated Business Income Tax - Exclusion from Unrelated Business Income of certain payments by controlled entities to their nonprofit parents was extended so that payments of rent, interest and royalties for passive activities are only taxable to the extent that they are in excess of fair market value.
Click here to read more about extenders of interest to nonprofits.
Accounting for Leases - Including a Proposed New Accounting Standard
By Dick Larkin, CPA
- As of early 2011, Accounting for Leases is the subject of FASB Statement No. 13 and its numerous amendments (codified in topic 840 of the FASB Accounting Standards Codification).
Its requirements are not discussed in detail in this article as they are in no way peculiar to nonprofit organizations, and are discussed elsewhere.
Briefly, leases are currently classified as either "operating" leases or "capital" leases; the criteria for classification being, in essence, whether or not the lease amounts in substance to a purchase of the asset by the lessee. There are four specific criteria used in making this distinction. Leases meeting one or more of the criteria are capital leases; all others are operating leases.
Click here to read more about accounting for leases.
2010 Form 990: Calm After The Storm, With Some Challenges To Come
By Joyce Underwood, CPA
- We are now approaching the third year of the redesigned Form 990 with its 14 new lettered schedules.
Organizations that were required to file a return and have not filed for three years are currently receiving notices from the IRS of their exemptions being revoked. The population of organizations recognized as exempt by the IRS will likely grow smaller as noncompliant or old and defunct organizations are removed from the the IRS Master Files. Data from the initial two years on the new IRS form is slowly becoming public as returns are released for public inspection.
Click here to read more about the Form 990 and the challenges to come.
Federal Tax Deposit Alert - Paper Coupon Payments Discontinued in 2011
Information compiled by BDO Seidman Alliance firm, Marvin & Co.
Beginning January 1, 2011, the Treasury Department will no longer accept payments made by paper coupon. Instead, they should be made by using the electronic Federal tax payment system. Federal tax deposits can be made easily, securely, and conveniently, 24 hours a day, 7 days a week, online or by telephone.
Click here to read more about the federal tax deposit alert.
Nonprofit Financial Statement Analysis - What Should I Be Looking For?
By Lee Klumpp, CPA
Many times, I have been asked the following two questions by nonprofit organization board members and senior management:
GAO Study on Inconsistencies in Indirect Costs
By Tammy Ricciardella, CPA
The United States Government Accountability Office (GAO) has issued a report titled, "Nonprofit Sector: Treatment and Reimbursement of Indirect Costs Vary Among Grants, and Depend Significantly on Federal, State, and Local Government Practices." The GAO was asked to review for certain selected grants and nonprofits how the indirect cost terminology and classification vary, how indirect costs are reimbursed and, if gaps occur between the indirect costs incurred and those reimbursed, what steps organizations take to cover these gaps.
Click here to read more about the GAO study on inconsistencies in indirect costs.
How can we help your nonprofit organization? Please post a comment below or, for more information on our nonprofit accounting services, contact Skoda Minotti at 440-449-6800.
- New Requirements for Tax-Exempt Hospitals; Just The Beginning?
- Items to Watch
- Executive Departures: How Good is the Goodbye?
- Extenders of Interest to Nonprofits: Better Late Than Never
- Accounting for Leases - Including a Proposed New Accounting Standard
- 2010 Form 990: Calm After The Storm, With Some Challenges To Come
- Federal Tax Deposit Alert - Paper Coupon Payments Discontinued in 2011
- Nonprofit Financial Statement Analysis - What Should I Be Looking For?
- GAO Study on Inconsistencies in Indirect Costs
New Requirements for Tax-Exempt Hospitals; Just The Beginning?
By Laura Kalick, JD, LLM in Tax
The Patient Protection and Affordable Care Act added requirements for tax-exempt hospitals to qualify as charitable organizations under the Internal Revenue Code (IRC). Although the new requirements are very specific to tax-exempt hospitals, all organizations should take note that Congress views tax exemption as a privilege and not a right and that new requirements could be imposed on other organizations in exchange for the benefit of tax exemption. Senator Charles E. Grassley was very much responsible for the new hospital requirements being added to the law on the basis of requiring charitable services to be provided in return for tax exemption.
Click here to read more about the new requirements for tax-exempt hospitals.
Items to Watch...
1099 Provision in Health Care Bill - The Patient Protection and Affordable Care Act included Section 9006 which would amend Section 6041 of the Internal Revenue Code by requiring all organizations to begin reporting payments to corporations and payments for merchandise on Form 1099 beginning in 2012. Both the Senate and the House have passed bills to repeal the 1099 provision and this initiative has the support of the President. However, the parties cannot agree on how to approach the revenue loss that this repeal would create, so this issue remains a topic of debate. We will have to wait and see what the final outcome is and the potential effect this will have.
Click here to read about moreitems to watch in the not-for-profit sector.
Executive Departures: How Good is the Goodbye?
By Michael Conover
Like their for-profit counterparts, tax-exempt organizations routinely encounter situations involving the departure of a senior level executive. These situations range from celebratory endings of successful careers to disappointing departures after things don't work out. The circumstances surrounding them can vary greatly, but departures almost inevitably involve some consideration of compensation/benefit issues.
Click here to read more about executive departures.
Extenders of Interest to Nonprofits: Better Late Than Never
By R. Michael Sorrells, CPA
The fate of various extenders (provisions in the tax law which have never been made permanent) was finally decided by Congress when the 2010 Tax Relief Act was signed by the President on December 6, 2010. The following are those most likely to have an impact on nonprofit organizations:
Unrelated Business Income Tax - Exclusion from Unrelated Business Income of certain payments by controlled entities to their nonprofit parents was extended so that payments of rent, interest and royalties for passive activities are only taxable to the extent that they are in excess of fair market value.
Click here to read more about extenders of interest to nonprofits.
Accounting for Leases - Including a Proposed New Accounting Standard
By Dick Larkin, CPA
- As of early 2011, Accounting for Leases is the subject of FASB Statement No. 13 and its numerous amendments (codified in topic 840 of the FASB Accounting Standards Codification).
Its requirements are not discussed in detail in this article as they are in no way peculiar to nonprofit organizations, and are discussed elsewhere.
Briefly, leases are currently classified as either "operating" leases or "capital" leases; the criteria for classification being, in essence, whether or not the lease amounts in substance to a purchase of the asset by the lessee. There are four specific criteria used in making this distinction. Leases meeting one or more of the criteria are capital leases; all others are operating leases.
Click here to read more about accounting for leases.
2010 Form 990: Calm After The Storm, With Some Challenges To Come
By Joyce Underwood, CPA
- We are now approaching the third year of the redesigned Form 990 with its 14 new lettered schedules.
Organizations that were required to file a return and have not filed for three years are currently receiving notices from the IRS of their exemptions being revoked. The population of organizations recognized as exempt by the IRS will likely grow smaller as noncompliant or old and defunct organizations are removed from the the IRS Master Files. Data from the initial two years on the new IRS form is slowly becoming public as returns are released for public inspection.
Click here to read more about the Form 990 and the challenges to come.
Federal Tax Deposit Alert - Paper Coupon Payments Discontinued in 2011
Information compiled by BDO Seidman Alliance firm, Marvin & Co.
Beginning January 1, 2011, the Treasury Department will no longer accept payments made by paper coupon. Instead, they should be made by using the electronic Federal tax payment system. Federal tax deposits can be made easily, securely, and conveniently, 24 hours a day, 7 days a week, online or by telephone.
Click here to read more about the federal tax deposit alert.
Nonprofit Financial Statement Analysis - What Should I Be Looking For?
By Lee Klumpp, CPA
Many times, I have been asked the following two questions by nonprofit organization board members and senior management:
- What should I be looking for when I review my organization's financial statements
- What questions should I be asking of the management team?
GAO Study on Inconsistencies in Indirect Costs
By Tammy Ricciardella, CPA
The United States Government Accountability Office (GAO) has issued a report titled, "Nonprofit Sector: Treatment and Reimbursement of Indirect Costs Vary Among Grants, and Depend Significantly on Federal, State, and Local Government Practices." The GAO was asked to review for certain selected grants and nonprofits how the indirect cost terminology and classification vary, how indirect costs are reimbursed and, if gaps occur between the indirect costs incurred and those reimbursed, what steps organizations take to cover these gaps.
Click here to read more about the GAO study on inconsistencies in indirect costs.
How can we help your nonprofit organization? Please post a comment below or, for more information on our nonprofit accounting services, contact Skoda Minotti at 440-449-6800.
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Comments for Not-for-Profit Standard E-Newsletter - Spring 2011