Tax Issues

Schedules F to I for the New Form 990 –(3 of 5)

Below is a summary of the fifth through ninth Schedules that may need to be attached to the new Form 990.

New Schedule F is added to report foreign activities. If a non-profit has a foreign bank account or a foreign office or has employees or activities outside of the U.S., they will disclose the activities on this new form.

Schedules A to E for the New Form 990 – (2 of 5)

My next four blogs will be a summary of the Schedules that may need to be attached to the new Form 990. Remember, these are still in draft form and the IRS is taking comments from the public until mid September. Draft schedules can be viewed at the IRS website .

New Schedule A will replace the current Schedule A, Part IV. All 501(c)(3) organizations that file a 990 must file a Schedule A. The redesigned schedule focuses on public charity status. This schedule will replace the 5-year advance ruling process currently required on Form 8734.

There are no proposed changes to Schedule B.

New Form 990 – (1 of 5)

The New Form 990, scheduled to be used for years ending on or after December 31, 2008, is available for viewing at the IRS web site. This form is still in draft form and subject to change.

The old Form 990 was nine pages long and had eleven separate parts to the form. In addition, Schedule A and Schedule B were available if required by the filing organization. The new Form 990 is ten pages long and has nine separate parts. In addition, fifteen new schedules (A through N and R) may be required for filing.

990-N letters in the mail

An update to the "2007 Brings Another Form to File" blog I posted in June.

The IRS has announced that it began mailing educational letters to more than 650,000 small tax-exempt organizations that may be required to submit a new annual notice. Non-profit organizations that normally have no more than $25,000 of annual gross receipts (but not churches) will be filing the new Form 990-N, "Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ.

IRS Pursuing 501(c)(3)s

According to John Pomeranz, partner in the Washington D.C. law firm of Harmon, Curran, Spielberg & Elsenberg, LLP,

the IRS is beginning to agressively pursue 501(c)(3)s if there is any indication of electioneering.

What is electioneering?

Electionneering includes the following:
1. Participating in or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office or
2. Supporting or opposing a candidate for publich office.

UBTI Defined...again

If a Church receives advertising or sponsorship/promotional income, the activity related to the income may be considered unrelated to the exempt purpose of the church.

Receiving advertising income may be unrelated business taxable income (UBTI), if the activity does not relate to the exempt purpose of the 501(c)(3) organization.

The IRS defines UBTI activity as follows:
1) the activity involved constitutes a "trade or business";
2) an activity that is "regularly carried on" by the organization; and

IRS Issues Draft Form 990 for Comment

The IRS has released another proposed revision for Form 990, (the informational return required for non-profits, churches are exempt). The draft proposes significant changes to the ways in which public charities report information on finances, fundraising activities, governance, executive/board compensation, and program services.

2007 Brings Another Form to File

Ministries that normally have no more than $25,000 of annual gross receipts are not required to file Form 990. This leaves the IRS with no records on these organizations. Therefore, for fiscal years beginning on or after January 1, 2007, these non-profit organizations must file a new annual report.

Time for Midyear Tax Planning (3 of 3)

Now that you have filed your 2006 tax returns, it is time to start making plans for 2007. Getting an early start on your 2007 tax planning will help you take maximum advantage of the latest tax breaks, inflation adjustments, and retirement options. Consider the following planning tips:

Time for Midyear Tax Planning (2 of 3)

Now that you have filed your 2006 tax returns, it is time to start making plans for 2007. Getting an early start on your 2007 tax planning will help you take maximum advantage of the latest tax breaks, inflation adjustments, and retirement options. Consider the following planning tips: