Blog.

Most Recent Posts

Q&A #168 – Is a newly formed nonprofit required to file Form 990-N for its first short tax year?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #168 – Is a newly formed nonprofit required to file Form 990-N for its first short tax year?

Most nonprofit organizations are required to submit a federal tax filing for their first partial or short tax year even if their tax-exempt status has not yet been approved, but there is no monetary penalty for failure to file if the organization qualifies to file the Form 990-N (e-postcard). Nonetheless, it is usually prudent to file Form 990-N for the first tax year anyway.

Read More
VIDEO: Disclosing Your Form 990 Approval Process | 5-Minute Lessons 4 Nonprofits
Videos, 5-Minute Lessons A. Michael Gellman (CPA, CGMA) Videos, 5-Minute Lessons A. Michael Gellman (CPA, CGMA)

VIDEO: Disclosing Your Form 990 Approval Process | 5-Minute Lessons 4 Nonprofits

SE4N's A. Michael Gellman provides a short lesson on how to approach answering the questions about your nonprofit organization’s Form 990 review and approval process on Lines 11a and 11b on page 6 of the Form 990, Part VI, Section B, including a discussion of some of the various ways to distribute the final draft of the Form 990 to the Board before filing, which Schedule O disclosures are needed, and the importance of setting procedures and providing a clear timeline to the Board.

Read More
VIDEO PODCAST: Improving your Form 990 Review Process [SUBSCRIBERS-ONLY]
Videos, Podcasts & Discussions A. Michael Gellman (CPA, CGMA) & Benjamin Takis Videos, Podcasts & Discussions A. Michael Gellman (CPA, CGMA) & Benjamin Takis

VIDEO PODCAST: Improving your Form 990 Review Process [SUBSCRIBERS-ONLY]

Mike and Ben discuss the process of reviewing and approving drafts of Form 990, the steps nonprofit organizations can take to improve their Form 990 review and approval process, the importance of getting input from both financial and non-financial perspectives, how to approach the questions on page 6, Part VI, Lines 11a and 11b of the Form 990, and more.

Read More
Establishing a Form 990 Review and Approval Process
Articles A. Michael Gellman (CPA, CGMA) Articles A. Michael Gellman (CPA, CGMA)

Establishing a Form 990 Review and Approval Process

Many nonprofit organizations treat the annual Form 990 filing like a sprint at the end of a long 5K race. After the year is completed and the audited financial statements finally appear, the rush to get the Form 990 assembled and filed too often becomes a hectic “mad dash.” Formalizing the process for review and final approval of the Form 990 before filing will help to avoid mistakes, better reflect current conditions, and show the organization in the best possible light.

Read More
Q&A #152 – What happens if a 501(c)(3) public charity exceeds the 501(h) lobbying limits?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #152 – What happens if a 501(c)(3) public charity exceeds the 501(h) lobbying limits?

501(c)(3) public charities are permitted to engage in “lobbying” up to certain limits. Organizations that make the “501(h) election” are subject to a more concrete set of limits based solely on expenditures made by the organization for lobbying purposes. If an organization exceeds these limits in any one tax year it will have to pay a 25% tax on the excess. A 501(h)-electing organization’s tax-exempt status will not be revoked unless its lobbying expenditures exceed 150% of the limits over a 4-year period.

Read More
Q&A #151 – Who should nonprofits name as their principal officer at the top of the Form 990?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #151 – Who should nonprofits name as their principal officer at the top of the Form 990?

The Form 990 instructions state that for purposes of Item F at the heading of the Form 990, the “principal officer” is the person who “regardless of title, has ultimate responsibility for implementing the decisions of the organization's governing body, or for supervising the management, administration, or operation of the organization.” Application of this definition will vary depending on the organization, and this will not necessarily be the same officer who signs the Form 990 at the bottom of page 1.

Read More
Q&A #140 – How do nonprofits report a name change to the IRS?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #140 – How do nonprofits report a name change to the IRS?

A formal name change must be reported on the organization’s next Form 990 or 990-EZ by checking the “name change” box in Column B on the left side at the top of page 1 and including a state-certified copy of the amendment to the organization’s Articles of Incorporation. Form 990-N filers must instead send a letter or fax with this supporting documentation to the IRS Exempt Organizations Division.

Read More
Q&A #137 – Is an amended Form 990 required to correct a minor error or omission?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #137 – Is an amended Form 990 required to correct a minor error or omission?

Tax-exempt, nonprofit organizations are required by law to file Forms 990 that are complete and correct, but there is no affirmative legal duty to file an amended Form 990 to correct a newly discovered error or omission. While an organization may wish to file an amended Form 990 to manage public perception, show transparency, or mitigate the risk of penalties, this step may not be worth the cost and effort in the case of an inadvertent good-faith mistake like the omission of a single, volunteer Board member.

Read More
Q&A #135 – Must directors who left the Board mid-year be listed in the Form 990?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #135 – Must directors who left the Board mid-year be listed in the Form 990?

The IRS instructions for Part VII, Section A of the Form 990 provide that any director or trustee who “served at any time during the organization's tax year” is reported as a “current” director or trustee. In other words, Board members who step down in the middle of the year must appear on the list of directors, officers, key employees, and other individuals reported in Part VII, Section A of the Form 990.

Read More
Q&A #128 – Does the tax-exemption reinstatement process require organizations to file the Forms 990 they missed?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #128 – Does the tax-exemption reinstatement process require organizations to file the Forms 990 they missed?

The process for reinstating the tax-exempt status of an automatically revoked organization is described in IRS Revenue Procedure 2014-11. In short, to obtain the maximum protection of the reinstatement process, organizations must file any missed Forms 990 or 990-EZ except to the extent they: (1) were eligible to file Form 990-N during the relevant years; and (2) file for reinstatement by the 15-month deadline.

Read More
Three Steps to Be Better Prepared for Public Disclosure Requests

Three Steps to Be Better Prepared for Public Disclosure Requests

How a nonprofit organization responds to public disclosure requests provides a clear window to its commitment to accountability and transparency. However, many organizations are insufficiently prepared to respond to requests for documents. This can lead to compliance failures and/or inadvertently sharing sensitive information that was not required to be disclosed.

Read More