IRS Gift Substantiation & Disclosure Requirements
Important rules governing deductibility of charitable gifts, updated for 2017.
you’re doing is worth gold…no other organization can do what
you’re doing with the meticulous focus and excellent advocacy you
bring to such critical issues.”
-- Donna Pressma, President and CEO, Children’s Home Society of New Jersey
Our non-profit HelpDesk information and referral service answers telephone and e-mail questions on non-profit compliance and management issues such as IRS regulations, tax laws, fund raising issues, Board/staff roles and responsibilities and many others. Center members get priority access and more in-depth assistance. More information
Salary threshold declared invalid; “white collar duties tests” under existing law remain unaffected
On November 22, 2016, a federal district judge in Texas issued a preliminary injunction blocking implementation of the Overtime Final Rule adopted by the U.S. Department of Labor (DOL) last May, ruling that the DOL had exceeded its authority.
Non-profits need to be aware that even though the salary threshold remains suspended, employees must still satisfy other criteria, particularly the administrative, executive or professional "duties tests," in order to be exempt from overtime requirements. The recording from the Center's November 9 webinar about the duties tests is available for Center members.
IRS Issues Shortened Form 1023-EZ for Small Startup Organizations
On July 1, 2014, the IRS announced the release of a new, shorter application for eligible small organizations seeking recognition of tax exempt status under Section 501(c)(3). Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, is the Service’s effort to simplify the application process for smaller organizations, and to reduce its existing backlog of exempt organization applications.
The Form 1023-EZ can provide a streamlined path to tax exemption, but it's not for everyone. Read the Center's article for an overview of:
Nonprofit & Social Service Organizations
The Desk Reference Manual For Nonprofit and Social Service Organizations outlines the basic financial, accounting, tax compliance, organizational and legal issues regarding the ongoing operations of nonprofit and social service organizations and provides resources to address these concerns. Critical issues such as obtaining federal recognition of nonprofit status, charitable solicitation registration and basic financial statements, including statement of activities, statement of financial position, cash flows and functional expenses, are addressed. Download the PDF, or read the manual online.
Employers who improperly classify their employees as independent contracts risk facing stiff fines and penalties if a government audit finds that the workers should have been designated as employees. The IRS has implemented a program to encourage employers who have misclassified their workers to correct the situation without penalty and at a reduced cost.
State employment requirements
governing certain information requests, unpaid leave, and others
This "must-read" article from our friends at the Pro Bono Partnership summarizes four state laws passed in 2013 that affect non-profit employers. The statutes cover protection of employees who request information as part of discrimination claims; unpaid leave for victims of sexual assault or domestic violence; penalties for failure to respond to NJ Department of Labor requests; and access to private social media accounts of employees and job applicants.
Read the article
A list you do NOT want to make...
Since May 2010, the IRS has been revoking the tax-exempt status of organizations that are required to file Form 990, Form 990-EZ, Form 990-N (e-postcard) or Form 990-PF (private foundations) and have failed to do so for 3 consecutive years. MOST NON-PROFITS ARE SUBJECT TO THESE REQUIREMENTS. If exempt status is revoked, the only way to reinstate it is to reapply for tax exemption.
The New Jersey revocation list includes over 19,000 organizations, more than 12,000 of which are 501(c)(3). The tax exemption status of these organizations were automatically revoked for failure to file the required Form 990 information return for three consecutive years. This list is updated monthly.
For more information about e-filing of Form 990 or Form 990-EZ and a low-cost, online e-filing solution, visit the Urban Institute's e-filing Web site at http://efile.form990.org/. [Note: effective February 29, 2016, e-filing of the Form 990-N e-postcard is done directly through the IRS.]
The rule adoption means that any organization with less than $500,000 in gross revenue in its most recently completed fiscal year will no longer have to submit an independent audit in order to satisfy the requirements of New Jersey's fund raising statute. The Center estimates that the new change could save each covered organization an average of $7,000 annually, and will result in an annual combined savings of over $10 million for the non-profit community. more information
New Jersey's Family Leave Insurance law (FLI) enables eligible employees to collect up to six-weeks of state paid monetary benefits when out of work to care for a newborn, newly adopted child, or an ill family member. This insurance law is an extension of the State Temporary Disability Benefits Program and applies to employers of all sizes. This article, posted with permission of the Employers Association of New Jersey, highlights the key provisions of the law.
Click here for article
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Use Caution When Fundraising Online -- Some issues to consider if you plan to use the Internet to generate revenue for your organization -- whether you solicit donations on your website, on someone else's, or if your organization has any sort of online presence.
IRS Disclosure Regulations for Non-Profits - IRS regulations require public charities to mail copies of their Form 990 and 1023 upon request or make them widely available by posting them on the Internet. It is important for non-profits to familiarize themselves with these regulations and adopt internal policies and procedures to ensure compliance.
Visit our Public Policy page for additional information regarding new and emerging legislative and regulatory issues.
For older information please visit our Legal/Management Archive