Current Events, Audit Issues, Governance Issues, Reporting Issues, Tax Issues

Statement of IRS regarding taxation of personal use of cell phones

A statement of IRS Commissioner Doug Shulman indicates Secretary Geithner and he will “ask that Congress act to make clear that there will be no tax consequence to employers or employees for personal use of work-related devices such as cell phones provided by employers.”

To read the full statement, go to http://www.irs.gov/newsroom/article/0,,id=209795,00.html

I hope Congress acts quickly on this request—it will make all our lives a little easier.

New Technologies and What the IRS Thinks

According to a field directive issued in July 2008, the IRS considers nonprofit organizations responsible for information contained on linked sites in the same manner the nonprofit organization is responsible for its own printed or published materials. This field directive (see at http://www.irs.gov/pub/irs-tege/internetfielddirective072808.pdf) relates directly to political campaign activities. This is based largely on Rev. Rul. 2007-41 (see at http://www.irs.gov/pub/irs-drop/rr-07-41.pdf) which states that a Web page is the same as printed material, and the organization has control over which links are placed on the Web page. Therefore, the organization is responsible for the content of the linked material.

Giving USA 2009 Released

The Giving USA Foundation released its Giving USA 2009 report on June 10, 2009. Charitable giving in the United State estimated at $307.65 billion in 2008. It is the first decline in giving since 1987 and the second decline since Giving USA began publishing in 1956. For full details on the 2009 report, please check out http://www.givingusa.org/press_releases/gusa/GivingReaches300billion.pdf

New Technologies infiltrate Churches and Ministries

Many of the popular social networking sites today such as Twitter and Facebook are being used by churches, ministries, and those that work with them more than ever to reach followers. This is one of the many new ways the younger generation communicates and churches and ministries have taken notice. Blogs have become popular over the last few years as well.

http://www.telegraph.co.uk/scienceandtechnology/technology/twitter/52740...

http://www2.ljworld.com/news/2009/may/02/faithbook-lawrence-religious-gr...

403(b) Plan Phone Forum

Certain 501(c)(3) organizations, including churches, may establish section 403(b) tax-sheltered annuity (TSA) plans for their employees. Under the final 403(b) regulations, plan sponsors were required to have a written plan in place by January 1, 2009. Under Notice 2009-3, published on December 11, 2008, sponsoring organizations were granted relief from the written plan requirement for the 2009 calendar year. The IRS is sponsoring a phone forum to discuss the new written plan requirements and the postponed effective date.

Economic Impact on Nonprofits

In a nationwide survey of over 1,300 member organizations, the Evangelical Council for Financial Accountability (ECFA) reported that a majority of respondents had better than expected financial results for the fourth quarter of 2008. Over 330 churches and nonprofit organizations responded to the survey, and 72% said that they met, exceeded or came within 10% of their fundraising goals. Only 28% reported that they were more than 10% below their goals.

Court Puts Halt to IRS Audit of Church

The Minnesota federal district court last month decided that current IRS procedures for opening tax investigations of churches does not comply with legal requirements for pre-approval by a high-level Treasury official. Currently, the head of the IRS exempt organizations exam division approves all church audits. But the court said that the law requires approval from a higher-level official.

Reverend Robert A. Schuller resigns as Senior Pastor of Crystal Cathedral

After being relieved from his duties as Preacher on the television show “Hour of Power” in October by his father and founder of the Crystal Cathedral, Reverend Robert A. Schuller has resigned. It is reported that he will start his own ministry. The Church is a member of the Reformed Church of America denomination, which oversees approximately 60 churches throughout California. According to reports, Rev. Schuller is still in good standing with the denomination.

IRS Announces 2009 "insubstantial benefit" amounts for token goods or services given by charities

The IRS announced their official computation of inflation-based tax figures for tax years beginning in 2009 in Rev-Proc 2008-66. For 2009, a token gift value may be $9.50 (up from $9.10 in 2008) for contributions of $47.00 or more (up from $45.50), or not more than the lesser of 2% of the contribution or $95 (up from $91.00).

Yearend Tax Traps: Fringe Benefit Reporting and 1099’s

Fringe Benefits: The IRS requires reporting of certain fringe benefits as income to employees on their W-2. These include 1) personal use of company vehicles; 2) group life insurance in excess of $50,000; 3) expense allowances for which employee has not provided supporting documentation; 4) country club dues; etc. Most of are well aware that these type items represent taxable compensation to the employee; however, there is another danger in failing to report these items. The “excess benefit” rules include a safe harbor for items contemporaneously reported as compensation to the employee.