Many 501(c)(3) organizations are finding it necessary to cease operations by dissolving or merging out of existence. In order to effectuate such, 501(c)(3) public charities only need to follow the state law requirements (such as filing articles of dissolution), distribute assets consistent with their organizational documents and file a final IRS Form 990.

But a private foundation that desires to cease operations, in addition to following the steps noted above for public chairites, must also take (more…)

The IRA Charitable Rollover was reinstated through 2011 as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Contributions for the 2010 tax year can be made retroactively through January 2011.

As you recall, a Form 990, Form 990-EZ, or Form 990-N is due for every 501(c)(3) charity, regardless of size, on the 15th day of the 5th month following the close of the taxable year end.  The IRS has changed the filing thresholds for 2010, which is good news for some, and bad news for others.  The good news first - the threshold for Form 990-N (e-Postcard), the least burdensome of the Form 990s, was doubled to now apply to organizations with gross receipts normally less than or equal to $50,000.  This is really good news for small charities.   The bad news is that the threshold for filing the full Form 990 was significantly reduced, requiring organizations with gross receipts ≥ $200,000, or total assets ≥ $500,000 to file for the 2010 tax year.  Organizations in between must file the Form 990-EZ.  Numerous “medium-sized” charities are now going to be subject to the substantially more burdensome Form 990 filing requirements.  It is worth noting, however, that much of the learning curve for the new Form 990 has already been achieved as the larger charities have completed the new Form 990 since 2008.

When I was a kid, my mother would always tell me to “move it or lose it” – although I am not 100% certain, I think she was telling me to please move out of her way.  As tax revenues have declined, we have seen local tax assessors more frequently telling charity owners of real property to ”use it [property] or lose it [property tax exemption].”  (more…)

PLR 201047033 involved an organization that had qualified under 501(c)(3) to provide computer materials and computer training to the poor. Upon examination of the organization’s 990 and its principal’s 1040, the IRS learned that the principal had been running a commercial business and asking his clients to make their checks payable to the organization.  The principal commingled his personal funds with the organization’s funds in one bank account.  And most of the checks written from the account were for personal expenses.  So, the organization effectively became a ”tax shelter…to conceal his personal income.” The principal claimed that there was no impropriety; rather, he received bad advice and was confused on how to properly file his and the organization’s returns.  (more…)