User talk:CPAdavid

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Contents 1 Mis-read 990 2 Lobbying for 501(c)(3) 3 name calling 4 Quid pro quo disclosure - timing 5 Thorough answers & an accrual q. 6 Nonprofit horse "rental" 7 New 990 and sample policies 8 Messages from me 9 Thank you CPAdavid! 10 Your IRA (1099-R) question 11 Pub 78 & guidestar - 990 not filed? 12 thanks 13 990-PF

Mis-read 990

David, I just wanted to apologize for mis-reading your post. Based on your background, I think I will be able to learn a lot from you.Natalie 01:20, 8 February 2008 (CST)Natalie

Lobbying for 501(c)(3)

Have you worked much with the lobbying election for 501(c)(3) orgs. or lobbying in general? I have a client that is trying to get a bill passed for state revenue bonds (part of capital improvement project). I know a de minimus amount of lobbying is allowed, but today I came across a statement in my library materials about direct lobbying not being allowed by charitable orgs. Unfortunately I don't have a whole lot of time to research this in depth.

What I am specifically wondering is if the org. is allowed to inform certain members of the public that there is a bill before the legislature that affects the org and that they (the affected public) should submit testimony regarding the bill.Natalie 03:32, 3 March 2008 (CST)Natalie

Thank you for that prompt and detailed answer, David! This issue just came up over the weekend, so I decided to send some information to my client. After I had already indicated to them it would be okay to ask a segment of the public to testify on this one matter, I came across that paragraph about direct lobbying not being allowed. You confirmed what my understanding was prior to reading that paragraph. Now I need to go back and look at it again.Natalie 14:55, 3 March 2008 (CST)Natalie

name calling

Thank you, but in re-reading my posts I was probably a bit fast to judge, so I toned down my statements anyway. Kevinh5

Quid pro quo disclosure - timing

David, are you aware of any requirements on when a 501(c)(3) must disclose the amount of donation for quid pro quo contributions? I have a client that is collecting money for their big fundraiser, and they plan on sending out the contribution letters after the event. (There is no disclosure in the solicitation material.)Natalie 03:48, 25 March 2008 (CDT)Natalie

Thanks David. The code is pretty clear about that. (I had looked at something else that didn't specify a time frame.) Anyway, I'll let my client know.Natalie 14:04, 25 March 2008 (CDT)Natalie

Looking at this a little closer, it looks as if my client is technically in compliance. They are going to issue the receipts for the ticket purchases at the end of the event (April). The part you quoted from the IRS booklet was for private foundations. The IRS website doesn't include that particular wording for pubic charities. Since the donors only need to make sure they have receipts by the time they file their returns, I guess the actual timing in this case isn't so important.Natalie 14:53, 25 March 2008 (CDT)Natalie

Now I need to do some more research. The tickets are from $2,500 up to $25,000 for a table of 10. Last year they did include a statement on the solicitation materials, but in my opinion the FMVs were not appropriate. Each ticket level gets a little more, e.g., a bottle of fine wine, gift bags, etc. Geez, and now I see that the top level gets a two-page ad in the auction catalog. Last year they had indicated the FMV was one amount, even though each ticket level received something else above the prior.Natalie 13:43, 26 March 2008 (CDT)Natalie

Thanks for all of your input regarding this. I have been working with this particular client for about five years now. I took over from an accountant that had told them not to pay or report the general excise tax they had collected on one of their fundraising events because it would be a "flag." (Client did not want to pursue the accountant for negligence -- that is a whole different topic.) We've been making progress with compliance issues. When I saw the different levels last year, it just didn't seem reasonable that someone who received a bunch of additional goods would have the same value as someone who only received a meal and perhaps a little entertainment.

Going back to the timing of the disclosure, there's no difference between a private foundation's requirements vs. a public charity? The IRS isn't as specific with public charities as it is with PFs on their website. [[1]] Natalie 15:58, 26 March 2008 (CDT)Natalie

I'm sorry David. You are correct about the two links you included. I was comparing the information in the 4221PC with the website reference. My mixup. I was able to get publication 4221PC off the IRS website, so that's what I'm going to give to the client. It uses much clearer language than the other information on the website or the code section. Thank you again for your help and patience.Natalie 16:33, 26 March 2008 (CDT)Natalie

Here we go again. Client is an educational organization. Page 4 under "written statement" of Pub. 526 seems to indicate that educational organizations are an exception to providing a written statement regarding FMV in quid pro quo contributions. Section 6115 only makes an exception for political subdivisions of the U.S. I must be interpreting something incorrectly. What is your understanding? Natalie 05:24, 25 March 2009 (CDT)Natalie

Thorough answers & an accrual q.

Thank you for providing such thorough answers to others' questions. I enjoy reading your responses.

I was wondering if you might be able to help me with a question I have regarding compensation. Client is continuing to pay salary and medical benefits for an employee that left the organization voluntarily at the end of the fiscal year. Client is calling these benefits "severance pay," although I realize that's usually used when the employer terminates the employee.

My question originally was: Should all of the costs associated with these benefits, e.g., gross pay, PR taxes, medical and retirement contributions (if they are allowed), be accrued as of the end of the year? After looking at SFAS 106, I think they should have been accrued during the years the employee worked. Until this year, however, the amounts paid to former employees were relatively small.Natalie 20:42, 5 September 2008 (CDT)Natalie

Shoot, now I'm not sure whether these "salary" payments to the former employees are taxable for FICA and other PR tax purposes or not. It seems they should not be included in TDI and W/C calculations. Do you know?Natalie 04:07, 6 September 2008 (CDT)Natalie

Double shoot. Well, the client pays a consultant every month to provide information about and evaluation of benefits. I guess I'll wait to hear a response from her.Natalie 15:44, 6 September 2008 (CDT)Natalie

Nonprofit horse "rental"

I have a new client that provides therapy for kids via a horse riding center. The organizers of the 501(c)(3) own the horses. In exchange for letting the organization use the horses, the organization pays for horse feed in the amount of $5/use. I've told my client that basically this is rental income for the organizers. The question is how to structure this so that the horse owners have the least tax impact. Here are some additional facts:

• Actual cost to feed a horse for 1 year is ~$2,100

• A horse is used ~3x - 5x per week in the program and 1x per week for personal use

• All rental income (before deductions) in Hawaii is subject to 4.5% GET in addition to any income tax that might apply

• All of the owners itemize deductions; not sure whether AGI limits come into play

We've discussed the possibility of the organization purchasing the horses, but then there's the issue of personal use. What would you recommend to this client?Natalie 22:47, 11 October 2008 (CDT)Natalie

Add'l info:

• Exempt status approved & org is incorporated

• Income from grants (significant amount), donations (some from organizers) and service fees (about same amount as donations)

• Clients include Ronald McDonald House, Easter Seals, Shriners Hospital, a special ed school -- kids with disabilities Natalie 23:40, 12 October 2008 (CDT)Natalie

Thanks David. I'll follow up with my client. I'm not sure how FMV would be determined for the personal use, but perhaps they have some ideas. It may be worth it for them to discuss the issue with an attorney as well. Natalie 16:10, 13 October 2008 (CDT)Natalie

Thanks for the suggestion on FMV of horse riding. I was all set to review this issue with my clients and was just wondering if there's another way to do this. I need to check with them, but I think their main concern is making sure the organization has the use of the horses while offering a slight offset to the expense of having them. They're not out to make lots of money by loaning the horses to the org.

So, what if they took the total cost of maintaining the horses over a year, pro-rated it between the org and personal use and then took a charitable deduction for the org portion? (I don't do many individual returns, so I'm not sure if this would be allowed.)Natalie 22:52, 13 October 2008 (CDT)Natalie

When I read your answer, it seemed so simple. I think I was stuck in the forest. Thanks for your help with this, David! Natalie 13:36, 14 October 2008 (CDT)Natalie

New 990 and sample policies

Hi David, I was wondering how you handle clients who do not have certain policies (compensation, document retention, etc.) in place that will now be disclosed on the 990. Usually I just send samples that I find online, e.g., the conflict of interest policy included with the 1023 application. I am now a little hesitant to send that, however, because I read a document from an attorney (Michael Malamut from Boston) that says that particular policy is "barebones" and should be modified for nonprofits other than hospitals.Natalie 18:46, 23 December 2008 (CST)Natalie

Messages from me

How come I'm the only one that has messages to you here? See the quid pro quo topic for my most recent post.Natalie 05:26, 25 March 2009 (CDT)Natalie

Thank you CPAdavid!

David, Thanks for your cited answer to my question on the tax forum regarding donation of equipment / services. So many answers here seem to be "drive by" in nature, so I really appreciate your thorough treatment of the question, and noted on your profile of your extensive work with non profits. All my work is for profit to date, but a couple of my clients are making noises about forming non profit organizations, so I'll keep you in my memory bank if I run into questions of that nature. Anchorman 12:14, 26 March 2009 (CDT)

Your IRA (1099-R) question

Hi, David -

You posted your question today at the end of a Consumer Question. Did you want me to try to move your part of the discussion over to the Tax Forum so you'll get more input, or has Kevin given you what you need (I think it's the latter, in which case we'll just let the question stay where it is if you don't mind). In the future - you can see what forum a discussion is on my looking at the top of the page. It'll say "Discussion Forum Index -->" and then the name of the forum. Don't bump an old Consumer Question to ask a new question if you can help it - you're really limiting the number of people who'll see it and respond.

Click on my name below and leave a note on my discussion page if you'd like your question moved to the Tax Forum.

Thanks,

Trillium 16:20, 13 April 2009 (CDT)

Pub 78 & guidestar - 990 not filed?

I have a relatively new client (school) that said they confirmed with their affiliated church that the 990 was being filed on a regular basis. It sounded like it might be a group return. I've looked in Pub. 78, and a church is there (I have to check if that is the correct one). They are listed on Guidestar.org, but there's no 990. There is no 990 under the church name either.

It looks to me like a 990 may not have been filed in the past several years. Can you think of any reason the 990 would not be posted on guidestar.org?Natalie 07:28, 15 July 2009 (CDT)Natalie

Hi, my name is Yasin. I am not a tax profesional but I am trying to file for my organization an IRS tax exemt status. The Article of the Incorporation states as the purpose.." This corporation is organized exclusively for educational, literacy, social and cultural porposes within the meaning of Section 501 C 3 of the IRS. So I am wondering if we will qualify for 501 C 3 status because their is the word "social" and "Cultural" in the purpose statement? Or do we just file for other status, but then the problem will be.."within the meaning of section 501 C 3 status" because that is what it says on the Article of Incorporation. And, by the way the organization will be helping Somali refugees and immigrants in the U.S settle in America and I am still in high school. Please help! Thanks in advance.

thanks

I really appreciate your input on my 990PF startup questions. As I do some extremely challenging tax returns, I have only done a hand full of 990s.

990-PF

Hey David,

Always like to see your comments. Just visited your website. Neat little niche you are carving out, I think I'll have to explore it a little more when I have free time.

Was wondering how familiar you are with 990-PF's. I want to bounce a few questions off someone about the presentation and the relation to the audited financials.

Thanks,

Fsteincpa 19:42, 13 November 2009 (CST)

Thanks for the response David,

I'll post it on the board, but I'm used to reconciling the 990 to the audited financials. There doesn't seem to be a place for that here.

The issues I am looking at <and I'll also post to the forum are:

1 - Excise tax calculated on Net Investment Income <NII> - If realized loss on sale of investments, this is excluded and Proseries does not carry the loss to the Page 1. I assume this becomes an other decrease amount on Part III Analysis of change in Net Assets.

2- Page 1 Column b NII and Column c Adj NI are virtually the same, except that in scenarios where a particular investment activity generates more expense than income, that the expense is reduced in column c to an amount equal to the income.

And basically, I am sure more questions gonna pop up as I go through. Since you seem to specialize, I was hoping you were PF expert as well. Would have paid for yor time to review. Oh well.

On another note, after I get through with this stuff, I'd like to discuss how you market your niche. I write these abatement letters all the time, just haven't really been charging. lol.