Article Archives: Karen Dunn

Posted by: Karen Dunn

You’ve finally squared away your organization’s 2018 Form 990 (or 990-PF or 990-EZ) when your accountant informs you the organization still owes tax on qualified transportation benefits provided to your employees. What? It’s true. Since this new expense came into effect with the 2017 Tax Cuts and Jobs Act (TCJA), we’ve dedicated several articles in […]

Posted by: Karen Dunn

This is updated from an article that was originally published on 8/1/2017. It is time again to prepare to file the Form 990. Calendar year returns for 2018 are due May 15 and may be extended to November 15. Even fiscal year organizations can start thinking about it or they may be filing for 2017 now. […]

Posted by: Karen Dunn

The new “siloing” law requiring computing UBI separately for each unrelated business created significant challenges. Notice 2018-67, released last fall, addressed some of these questions. The Notice’s interim guidance can be relied on until formal regulations are adopted. The Notice requested comments, most notably whether NAICS codes should be used to determine the separate trades […]

Posted by: Karen Dunn

Two questions tax practitioners hear frequently — “What are the risks of an IRS audit?” and “What outcome can we expect if we are audited?” If you ask your tax advisor these or similar questions, it’s likely you will not get an answer. It is not ethical to give tax advice based upon probability of […]

Posted by: Karen Dunn

Now is a good time to update employee expense reimbursement plans, given changes brought about by the Tax Cuts and Jobs Act (TCJA), effective beginning in 2018. The new law disallows tax deductions for some commonly reimbursed business expenses. Why is this important if your organization does not pay taxes? It is important because now […]

Posted by: Karen Dunn

Beginning in 2018, unrelated business taxable income (UBTI) must be computed separately for each unrelated trade or business. Net operating losses (NOL) from one unrelated trade or business may not be used to offset income from another unrelated trade or business. The unused NOL may be carried forward to future years but may only reduce […]

Posted by: Karen Dunn · Jane Searing

By Karen Dunn, JD, LLM and Jane Searing, CPA On February 22, 2017, the IRS released data regarding organizations that utilized the 1023-EZ from its inception in July of 2014, through December of 2016. To conduct their research, the IRS employed a streamlined, online process, which allowed them to collect data from over 105,000 organizations. […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM Typical year-end tax planning advice for individuals and corporations expounds on the virtues of accelerating deductions and deferring income. Charities and private foundations would be wise to consider the possible impact this advice may have on donations. It appears likely that income tax rates will drop under a GOP-controlled executive […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM Your charity just received a donation of a painting valued at $6,000. You have diligently sent the donor a thank you note that includes all the information that an acknowledgment must have for the donor to take a charitable deduction. That is a very good habit, but is that all […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM It is an election year and a CEO of a charitable, exempt organization personally endorses a presidential candidate at a forum sponsored by another public charity. The sponsoring organization of the event also invites one of the local gubernatorial candidates to speak to their members, but does not invite all […]

Posted by: Cheryl R. Olson · Karen Dunn

By Cheryl R. Olson, CPA, CGMA and Karen Dunn, JD, LLM Your website may inadvertently cause tax risks for your nonprofit organization. A website communicates an organization’s mission, programs, and events to donors, volunteers, and the community. That is a valuable service. However, it can also communicate to the world taxable unrelated business activities, prohibited […]

Posted by: Karen Dunn

By Karen L. Dunn, JD, LLM September 6th is the due date for filing the notification of intent to operate as a 501(c)(4) organization, if the organization existed on July 8, 2016 and is otherwise not excepted from this requirement. Newly created organizations must file the notification and pay a small user fee, no later […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM The Protecting Americans from Tax Hikes Act of 2015 (PATH) was signed into law December 18th and includes many provisions affecting charities. Last month, we focused on the permanent extensions in the bill. This month, we focus on the new notice requirements for self-declared 501(c)(4) social welfare organizations in Code […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM The Protecting Americans from Tax Hikes Act of 2015 (PATH), signed into law December 18th, contains some very favorable provisions affecting charities. Some of these provisions provide permanent extensions and some are new administrative procedures. This article focuses on the permanent extensions affecting charities.  However, stay tuned, as next month […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM The IRS will be moving forward. Simota Lough, the Tax Exempt and Government Entities (TE/GE) commissioner, announced plans to build the IRS of the future with the Moving Forward Together – The Road Ahead initiative. Each year, the IRS issues its priority work plan that outlines what the IRS accomplished […]

Posted by: Karen Dunn · Amber Busch

By Karen Dunn, JD, LLM and Amber Busch, CPA  With all the hubbub among accountants about the new tangible personal property regulations, should exempt organizations be concerned, or is it, for them, much ado about nothing? If you haven’t heard the scuttlebutt, these regulations provide long-awaited guidance on capitalization or expensing of improvements and purchases. The […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM More due diligence and reporting is required than ever before for grant making and, in particular, foreign grants and programs. To maintain its exempt status, an organization must use its assets, including all domestic and foreign grants it may make, exclusively for qualified exempt purposes. Form 990 requires disclosure of […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM The Advisory Committee on Tax Exempt and Government Entities (ACT) released recommendations to the IRS last summer for specific changes to UBI reporting and additional guidance. In its report, the committee expounds on the lack of guidance from the IRS on the subject. The ACT points out that such lack […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM In an effort to address the frustration expressed by tax practitioners and the IRS regarding the inadequacies of the current Form 990-T, Exempt Organization Business Income Tax Return, The Advisory Committee on Tax Exempt and Government Entities (ACT) recommends a significant redesign of the form. A line-by-line activities checklist spearheads […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM The IRS has increased its focus on unrelated business income (UBI) reporting. Because of this, the Advisory Committee on Tax Exempt and Government Entities (ACT) released recommendations to the IRS for specific changes to UBI reporting and additional guidance. Although the IRS’s focus is in response to the findings of […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM Some small employers are finding themselves in a conundrum in 2014. This year, premiums eligible for the small business health care tax credit must be for qualified health plans (QHP) offered through a Small Business Health Options Program (SHOP) Exchange. However, some counties in some states do not yet offer […]

Posted by: Megan Ryan · Karen Dunn

By Megan Ryan, CPA and Karen Dunn, JD, LLM With the holiday season approaching, organizations may find that individuals or groups who benefit from the organization’s services, desire to make year-end gifts to the organization’s employees for their loyal service. Examples include the parents of private school students providing year-end gifts to their children’s teachers […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM Taking into consideration the government’s budgetary crisis, the Advisory Committee on Tax Exempt and Government Entities (also known as ACT) issued a report suggesting ways that the IRS can leverage its resources in regulating the more than 1.5 million tax exempt organizations, particularly smaller organizations (990-EZ or 990-N filers). The […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM No prohibition exists against a 501(c)(3) organization using the internet for fundraising, the IRS said in a recently released information letter. Web or email fundraising should comply with the same rules* that apply to other solicitations. Since most organizations do some sort of internet solicitations, organizations must be cautious and […]

Posted by: Karen Dunn

By Karen Dunn, JD, LLM On July 2, 2013, the Obama Administration announced the postponement to 2015 of the mandatory employer and insurer reporting requirements under the Patient Protection and Affordable Care Act. This gives employers more time to comply with the new rules. Without this relief, the requirements would apply beginning January 1, 2014. […]

Posted by: Karen Dunn · Jane Searing

By Karen Dunn, JD, LLM and Jane Searing, CPA 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 […]

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