Tax Issues

IRS Rebate checks are really on the way!

In an effort to boost the U.S. economy, Congress passed the 152 billion-dollar Economic Stimulus Act of 2008 on February 7, 2008. The legislation will provide tax rebate checks to about 130 million households, starting sometime in May.

* Single individuals may be entitled to receive a one-time tax rebate of up to $600; joint filers may qualify for up to $1,200.

* The rebate amount begins to phase out for higher-income taxpayers, beginning at $75,000 of adjusted gross income for single filers and $150,000 for joint filers (based on 2007 tax returns).

Intermediate Sanctions (2 of 2)

Intermediate Sanctions allow the Internal Revenue Service (IRS) to assess excise taxes on excess benefit transactions that occur between a disqualified person and a 501(c)(3) or 501(c)(4) tax-exempt organization.

What is an excess benefit transaction?

An excess benefit transaction occurs when the value of the benefit to the disqualified person exceeds the fair market value of the services rendered. Examples of potential excess benefit transactions include, but are not limited to:
o Unreasonable compensation,
o Personal use of church property,

IRS Releases Final 2008 Form 990 for Tax-Exempt Organizations - (2 of 2)

Charities and other tax-exempt organizations are required to file certain informational returns with the IRS. Earlier in 2007, the IRS released a proposed draft of modifications to the Form 990 and asked for public comments relating to the draft. In late December the IRS issued an updated version of Form 990, and provided transition relief so that small exempt organizations will have time to adjust to the new form.

W-2 and Form 941 Reconciliation

It's that time of year and churches and ministries are preparing and filing the end of year payroll reports. If you are having trouble reconciling the W-2s with Form 941, start and perform a reconciliation quarter by quarter. Then a determination of when/where the discrepancy. A form is attached for your use, Download Form Here.

If you have any questions, contact us.

Bogus E-Mail

Straight from the IRS hotline:

The IRS has seen several variations of a refund-related bogus e-mail which falsely claims to come from the IRS, tells the recipient that he or she is eligible for a tax refund for a specific amount, and instructs the recipient to click on a link in the e-mail to access a refund claim form. The form asks the recipient to enter personal information that the scamsters can then use to access the e-mail recipient’s bank or credit card account.

Intermediate Sanctions (1 of 2)

Intermediate Sanctions allow the Internal Revenue Service (IRS) to assess excise taxes on excess benefit transactions that occur between a disqualified person and a 501(c)(3) or 501(c)(4) tax-exempt organization, as well as the managers who approve these transactions. A disqualified person is someone who “exercises substantial influence” over the organization, as well as their family members. These excise taxes are not paid by the organization and must be paid by the disqualified person and managers involved in the excess benefit transaction.

Vehicles Contributed to a Church – (4 of 4)

If a church or ministry receives an auto or other vehicle and the claimed value is greater than $500, there are different filing requirements than discussed in the previous post. You still need all the donor and vehicle information listed previously, however the additional documentation is more complicated.

IRS Releases Final 2008 Form 990 for Tax-Exempt Organizations - (1 of 2)

In late December the IRS issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.

Vehicles Contributed to a Church – (3 of 4)

Churches or ministries that receive a motor vehicle, boat or airplane contribution in excess of $500, should prepare Copy A of Form 1098-C. The form should be retained and filed with the IRS by February 28, 2008 along with a 1096 transmittal form. The Form 1096 must show the total number and dollar amount of all such 1098C (copy A forms) for the year. Remember, do not combine any of the under $500 donations in the 1098C-copy A totals.

Vehicles Contributed to a Church – (2 of 4)

If a church or ministry receives a vehicle valued greater than $500 and it is not sold, you must certify that it is used substantially in the church’s regularly conducted activities. Or, you must certify that the vehicle is to be transferred to a needy individual, at below value, to further the church’s charitable purpose. On Form 1098-C, a detailed description of the vehicle’s use must be supplied. Do not check box 7 or your donor will be limited to a $500 donation. The church/ministry must supply Copies B & C to the donor within 30 days of the contribution if no sale will take place.