Every Nonprofit's Tax Guide

How to Keep Your Tax-Exempt Status & Avoid IRS Problems

Every Nonprofit's Tax Guide

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Every Nonprofit's Tax Guide

A step-by-step resource

, J.D.

, 4th Edition

Keep your nonprofit's tax-exempt status and stay out of IRS trouble with this comprehensive tax guide.  This practical, thorough, and easy-to-read book explains both ongoing and annual compliance requirements for nonprofits, including:

  • rules for charitable giving and cash donations
  • Form 990
  • annual IRS filings and disclosures

See below for a full product description.

  Available as part of the Nolo's Nonprofit Bundle

The essential tax reference book for every nonprofit

Nonprofits enjoy privileges not available to other organizations. But these privileges come at a price: Nonprofits must comply with special IRS rules and regulations. This book covers what your organization must do to maintain its tax-exempt status.

Practical, comprehensive, and easy to understand, Every Nonprofit’s Tax Guide explains ongoing and annual IRS compliance requirements for nonprofits, including:

   •  a detailed look at Form 990

   •  line-by-line instructions for Form 990-EZ

   •  conflicts of interest and compensation rules

   •  charitable giving rules

   •  unrelated taxable business income rules

   •  lobbying and political activity restrictions

   •  nonprofit bookkeeping, and

   •  other key tax rules.

Whether you are just starting your nonprofit or are well established, you’ll find all the information you need to avoid the most common issues nonprofits run into with the IRS.

 

“(Nolo’s)…material is developed by experienced attorneys who have a knack for making complicated material accessible.”-Library Journal

Nolo is a pioneer in both consumer and business self-help books and software." -Los Angeles Times

 

ISBN
9781413321982
Number of Pages
480
Included Forms

 

  • IRS Form 990-EZ
  • Sample Conflict of Interest Policy (from IRS Form 1023, Appendix A, With Annual Conflict of Interest Acknowledgment Statement)
  • Rebuttable Presumption Checklist
  • Family and Business Relationship Questionnaire
  • Expense Report

Your Legal Companion for Nonprofit Tax Compliance

1. Nonprofits and the IRS

  • What Do We Mean When We Say “Nonprofit”?
  • The Life Cycle of a Nonprofit
  • Ongoing Compliance
  • IRS Audits

2. Annual IRS Filings—The Form 990

  • The Nuts and Bolts of the Filing Process
  • The 990-N Postcard Filing—As Simple as It Gets
  • Form 990-EZ: The E-Z Way Out
  • Form 990: Just Hold Your Nose and File It
  • Letting the Public See Your Report Card: Disclosure of Form 990
  • Notifying the IRS If You Terminate, Merge, or Contract Your Nonprofit
  • What to Do if the IRS Has Revoked Your Nonprofit's Tax-Exempt Status

3. Record Keeping and Accounting

  • Why Keep Financial Records?
  • What Does the IRS Require?
  • Do You Need an Independent Audit?
  • Minding the GAAP

4. Volunteers, Employees, and Independent Contractors

  • Volunteers—The Backbone Workforce of Nonprofits
  • Reimbursing Your Volunteers—Know the Rules
  • Unreimbursed Volunteer Expenses
  • Benefits and Freebies—How to Show Your Appreciation Tax Free
  • Paid Help: Employees and Independent Contractors
  • Hiring Independent Contractors
  • Hiring Employees
  • Obamacare (Affordable Care Act) and Nonprofit Employers

5. Charitable Giving—The Basics and Cash Donations

  • Your Role as a Nonprofit
  • Threshold Requirements for Deducting Donations
  • Annual Limits on Charitable Deductions
  • What Can a Donor Contribute?
  • When Is a Contribution Made for Tax Purposes?
  • Special Gifts—Earmarked, Restricted, and Conditional
  • If Your Nonprofit Provides Goods or Services
  • Cash Contributions
  • Cash Gifts From IRAs
  • Interest-Free Loans
  • Quid Pro Quo Contributions
  • Charity Auctions

6. Property Donations

  • Annual Deduction Limit for Property Donations
  • Valuing Property Donations—An Art, Not a Science
  • Different Types of Property Donations
  • Documenting Property Donations

7. Excessive Compensation, Sweetheart Deals, and Other Ways to Get in Trouble With the IRS

  • A Nonprofit Is Not a Personal Piggy-Bank
  • The IRS Intermediate Sanctions Minefield
  • Transactions With Disqualified Persons—How to Avoid Problems With the IRS
  • Excessive Compensation for Services: The Most Common Excess Benefit
  • Correcting and Reporting Excess Benefit Transactions
  • The IRS’s Sentence of Death: Revocation of Tax-Exempt Status

8. Nonprofits That Make Money and UBIT

  • What Is UBIT?
  • Activities Exempt From UBIT
  • Do You Owe UBIT?
  • Filing UBIT Tax Returns

9. Lobbying and Political Campaign Activities

  • Lobbying by Nonprofits—What’s Allowed and What’s Not
  • Political Campaign Activities—An Absolute Ban
  • Getting Around the Restrictions

10. Help Beyond This Book

  • Help From the IRS
  • Other Helpful Publications and Websites
  • Researching the Tax Law
  • Consulting a Tax Professional

Appendix: Forms

  • Sample Forms
  • IRS Form 990-EZ
  • Sample Conflict of Interest Policy 
  • Rebuttable Presumption Checklist
  • Family and Business Relationship Questionnaire
  • Expense Report

Index

Your Legal Companion for Nonprofit Tax Compliance

This book is for you if you have a nonprofit that is up and running, whether it’s been one day or one decade. You have dealt with the IRS already because you have your tax-exempt status. Now you’re wondering what else the IRS has in store for you and your nonprofit? The answer is: “a lot.”

Your nonprofit’s relationship with the IRS doesn’t end when you receive your tax-exempt status. Indeed, that’s only the beginning. The IRS will continue to oversee its compliance with the myriad of complex tax laws and regulations governing nonprofits. Dealing with the IRS and its rules is the price all nonprofits pay in return for the substantial tax benefits they receive.

Failure to comply with these laws can lead to dire consequences—revocation of your tax-exempt status, or the imposition of taxes and penalties on your nonprofit, or even on your officers, directors, or employees personally. In the past, the IRS was relatively lax about monitoring and enforcing nonprofit compliance with tax rules. However,  in response to widespread publicity about abuses by nonprofits and Congressional calls for better enforcement, the IRS has begun to more closely monitor nonprofits. These include more audits, requiring all nonprofits to file annual notices with the IRS, and substantially beefing up the annual information return filed by larger nonprofits—the IRS Form 990. Nonprofits need to take ongoing compliance with IRS rules and regulations more seriously than ever before.

In this era of fewer donations and grants and reductions in nonprofit staffing, the last thing a nonprofit wants to do is pay an accountant or lawyer to deal with IRS compliance issues. Fortunately, you can handle all or most compliance tasks yourself or with minimal help. This book can help. It contains step-by-step guidance on:

  • how to file annual information returns with the IRS
  • what types of records your nonprofit is required to keep
  • classifying workers as employees or independent contractors and dealing with employment taxes
  • how to comply with the tax laws governing the use of volunteers
  • the deductibility of charitable contributions
  • when you must provide written substantiation for contributions
  • avoiding IRS taxes or penalties due to conflicts of interest, payment of excessive compensation, insider transactions, and other prohibited behavior
  • how to avoid having to pay taxes on side businesses your nonprofit conducts to earn extra income
  • what types of lobbying are and are not allowed, and
  • how to steer clear of the prohibition on political activity.

Running a nonprofit is difficult enough these days without having to worry about the IRS looking over your shoulder. Turn to this book whenever you have a question about IRS rules or nonprofit compliance issues.

 

Tip

What this book is not. This book is not about how to form a nonprofit corporation or apply for IRS recognition of your nonprofit’s tax-exempt status. For guidance on these tasks, refer to How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo). This book has been written primarily for Section 501(c)(3) organizations that qualify as public charities and it does not cover the special tax rules applicable to private foundations. Moreover, while much of the material here is applicable to nonprofits other than Section 501(c)(3) organizations, this book has not been written with such organizations in mind.

 

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