Be Aware of Issues when E-Filing

For tax-exempt organizations that are currently working on filing their annual Forms 990, new rules surrounding mandatory electronic filing (e-filing) are causing quite a headache for tax professionals.

Originally enacted on July 1, 2019, the Taxpayer First Act required all tax-exempt organizations to electronically file their annual returns. Though electronic filing for exempt organization returns was available before the passage of this Act, it was mandatory only for select organizations. And several forms and scenarios were unavailable for e-filing all together, such as the Form 990-T, Form 4720, initial filers, or organizations that had a name change or year-end change in any given year.

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Bad Actors and Charities Are a Bad Mix: What the Form 990 Can Tell Us About the College Admissions Scandal

The Key Worldwide Foundation, formed in 2013, now finds itself at the center of the college admissions scandal grabbing headlines the last couple weeks. Over the years, millions of dollars had flowed through the charity as part of the scheme without IRS detection.

Watching the story develop, it was interesting how quickly attention turned to how the IRS should have done more to stop the misdeeds of the scofflaws and how the Form 990 should have uncovered these transgressions. It is important to understand the purpose of the Form 990 and everyone’s role in producing the Form 990.

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IRS Releases Form 990-EZ Tools to Improve Compliance Accuracy

More than 263,000 Forms 990-EZ were filed with the IRS in 2016. Of those, 139,000 were paper filed. The IRS reports 30% of all paper-filed Forms 990-EZ had an error, while only 1% of electronically filed Forms 990-EZ had an error.

In an effort to reduce the error rate on paper filed Forms 990-EZ, the IRS created an electronic PDF of the 990-EZ with 29 helpful pop up boxes. The boxes provide additional information and, in some cases, links to Form instructions, additional forms, another IRS publications or other helpful information.

You may access the pop up box enhanced Form 990-EZ here.

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IRS Changes 2014 Form 990 Sunshine Rules

By Jennifer Becker Harris, CPA

The last thing many nonprofit leaders want to see is a media article that depicts their charity in a negative light. The vast majority of charities work hard to be in compliance at both the state and federal levels, as their nonprofit corporation and tax-exempt status is an integral piece of how they raise funds and operate. In addition, one of the primary goals of the Revised Form 990 is transparency. This includes shining a light on certain transactions between the charity and insiders or “interested persons”, as disclosures may be triggered on Schedule L of the Form 990.

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Is Your Form 990 at Risk for an IRS Audit this Year?

By Karen Dunn, JD, LLM

Although the IRS is currently under fire for its practices around screening applications for exemptions, we should assume they are still “open for business,” collecting taxes, and enforcing tax law. Each year the IRS issues its Annual Report and Priority Guidance Plan. This plan outlines what the IRS accomplished in the past year as well as what their focus will be for the upcoming year. For the most part, the 2013 work plan continues efforts begun in 2011 or earlier. The information gathered from these efforts will ultimately lead to more IRS audits.

The current year work plan targets many areas for audit.

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