Article Archives: 2018

The Bipartisan Budget Act of 2018 passed a significant exception to the Excess Business Holdings rule.  This exception had been included in H.R. 1 of what became the TCJ Act of 2017, but it was pulled out during the Senate reconciliation process.

Before this change, private foundations were prohibited from holding more than either a 2% de minimis holding in a business enterprise or on a combined basis with all disqualified persons of either 20% or 35% of a business enterprise.  This was restrictive and frustrating for families with closely held businesses who wanted to fund the private foundation with closely held business stock.

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Not-for-profit organizations need to be aware that some changes in your calendar 2018 or fiscal 2019 year-end financial statements will be required. These changes are designed to more clearly indicate your organization’s financial position as a result of a recent Financial Accounting Standards Board Accounting Standards Update (FASB ASU).

The changes prescribed in Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities (ASU 2016-14) will affect all not-for-profits and provide more relevant information about their resources and the changes in those resources to donors, grantors, creditors, and other financial statement users.

Over the course of the coming year,

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Now that a month has passed since President Trump signed the Tax Cuts and Jobs Act into legislation, the ripple effect of the changes is being felt.  The drop in corporate tax rates has a positive impact for many.  However, exempt organizations with outstanding tax-exempt bonds may be facing higher interest rates this year and going forward.

Many bond documents are written with language that includes a provision allowing for an increase in the interest rate charged to the exempt organization if income tax rates decrease.  Initially, the logic of this may not make sense.  If income tax rates decrease, resulting in additional cash –

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Four years ago, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-15 (ASU 2014-15) Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which rewrote the rules for an organization’s requirement to consider its ability to continue as a going concern. These new rules were effective for reporting periods ending after December 15, 2016. Organizations with December 31 year ends have now implemented this guidance for one year.

What is Going Concern?

Going concern is not a new concept in accounting. In fact, it is a key principle in the preparation of financial statement in accordance with accounting principles generally accepted in the United States (U.S.

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Note: This article has been substantially updated since its original publication date, please refer to the latest article here.

Employee benefits that were formerly tax-free benefits under IRC 132(f) (transportation, parking, and on-site exercise facilities) are now only tax free if:

  1. The employer is a for-profit business and forgoes the federal income tax deduction, or
  2. The employer is a tax-exempt organization and pays unrelated business income tax on the value of those benefits.

Otherwise, those benefits are now taxable wages to the employee.

This change to the tax law is straightforward.

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Posted by: Mitch Hansen in CybersecurityFraud · .

I recently attended a training that discussed procurement cards—both their increased popularity and the risks associated with using them.

During the training, I shared that we have been using technology to help mitigate these risks. This technology can also help reduce risk in many other areas as well, including payroll and disbursements.

The Issue with Procurement Cards

Procurement cards are becoming a more common method of simplifying the purchasing process.

But as popularity and use grow, so does the number of transactions. This growth lessens management’s ability to effectively monitor use of these cards.

As a result,

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Certain transportation and onsite health benefits have been tax exempt to employees and tax deductible to employers prior to passing the Tax Cuts and Jobs Act of 2017. However, beginning January 1, 2018, the law subjects both for profit and nonprofit employers to taxation on these specific benefits as long as employers continue to treat the benefits as tax-free to employees.

Therefore, employers must make an important business and economic choice in relation to the benefits described below. They must decide whether to treat the benefit as taxable compensation to employees, or continue to treat the benefit as a non-taxable benefit to employees,

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