The BNN Tax-Exempt Organizations Blog

Thoughts on the Proposed Form 1023-EZ

The IRS recently issued a draft of a new Form 1023-EZ which, for many small organizations, would greatly simplify the process of obtaining tax-exempt status under Code Section 501(c)(3). The name of the form is “Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code”, and some have joked that the name is longer than the form itself.

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The Scary Realm of Excess Benefit Transactions

Now that the Form 990 is about to enter its sixth year since it was substantially redesigned, our clients have become increasingly familiar with its intricacies.  With this familiarity have come more complex questions being asked of us during the return preparation process.  Some of the questions we seem to be getting with greater regularity have been with regard to excess benefit transactions. This post is intended to touch upon what an excess benefit transaction is and what to do about it should one have taken place.

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IRS Issues Proposed Regulations for 501(c)(4) Social Welfare Organizations

On November 26, 2013, the IRS issued IR-2013-92 to announce the issuance of new proposed regulations applicable to tax-exempt Section 501(c)(4) social welfare organizations. This post will provide a very high-level summary of the proposed regulations and will set forth some of the most common initial reactions to them.

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Late Filing 990-N, What’s the Big Deal?

Tax-exempt organizations with gross receipts that are normally less than $50,000 are spared the administrative burden and expense of filing a full Form 990.  Instead, organizations small enough to be below this filing threshold are allowed to complete their annual tax filing by submitting an electronic tax form, Form 990-N, commonly referred to as the e-postcard.  Filing an e-postcard is very easy and can be done in as little as five minutes by registering online and answering a few simple questions.  It is important to note that failing to submit Form 990-N for three consecutive years will result in the IRS automatically revoking your organization’s tax-exempt status.

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Section 509(a)(3) Supporting Organizations

In December of last year, the IRS issued final and temporary regulations impacting Type III supporting organizations.  The new Regulations significantly alter the landscape which both functionally and non-functionally integrated supporting organizations must navigate in order to maintain their public charity status.  The new regulations are effective for all tax years beginning after December 28, 2012 and this has led many organizations to proactively change their public charity status prior to the end of this current tax year.

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Expenditure Responsibility

You’re responsible for the grant making functions of a private foundation.  It’s getting close to year end and you have to complete the yearly grant payout cycle.  You have an idea of where you want to distribute funds and every organization on your list is a 501(c)(3) organization of some kind. You’re all set to distribute funds, right?  Well, not all 501(c)(3) organizations are built the same and granting funds to certain kinds may have significant and unforeseen tax consequences to both you and your organization.

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