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IRS Exempt Organization Newsletter 2013-13

July 19, 2013

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On July 19, the IRS released its Exempt Organization Newsletter, Issue Number 2013-13. Topics include the following:

  • Upcoming IRS phone forums cover important topics
  • Register for EO workshops
  • Reminder: Tax credit extension for hiring veterans ends December 31
  • Tips for taxpayers who travel for charity work
  • 457(b) Plan Update – IRS Compliance Check On the Horizon

    July 17, 2013

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    From BenefitsBryanCave.com

    Tax-exempt entities are permitted to sponsor non-qualified deferred compensation plans for select groups of highly compensated employees, managers, directors or officers (i.e., “top hat” plans) under Code Section 457(b).   Approximately 200 non-governmental organizations sponsoring these plans will receive a “compliance check“ letter by the end of September 2013, and another 200 in the next 12-month rolling period, from the IRS’s Employee Plans Compliance Unit (“EPCU”).  This outreach effort is part of a project recently announced by the IRS designed to:

    • learn more about the operation of these plans,
    • verify that the plans comply with the applicable Code requirements,
    • identify common issues of noncompliance, and
    • recommend ways to remove any “barriers” to compliance.

    EPCU is requesting “timely” responses to its request for information (or a response indicating that the compliance request was received in error because the employer does not maintain a 457(b) plan).  While the compliance

    Health Care Reform: Where are We Now that ACA’s Employer Mandate Has Been Delayed for One Year?

    July 10, 2013

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    From BenefitsBryanCave.com

    The Benefits world was rocked last week when it was announced that enforcement of the ACA employer shared responsibility penalties would be delayed for one-year. IRS Notice 2013-45, released late yesterday, July 9, officially confirmed the delay, but provided no real additional guidance.  Employers are asking, what exactly this means?  Read on for our summary of where things stand.

    I.     What ACA requirements are delayed in 2014?

    • Employer Mandate:  Employers must offer coverage to employees who work on average 30+ hours per week.
    • Affordability:  Coverage must be affordable (i.e., the employee’s share of the coverage cost cannot exceed 9.5% of the employee’s household income).
    • Minimum Value:  Coverage must provide minimum value (although this requirement is waived, employer must still report whether a plan provides minimum value on the SBC).
    • Certain Reporting Requirements:  Employers

    IRS Exempt Organization Newsletter 2013-12

    July 9, 2013

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    On July 3, the IRS released its Exempt Organization Newsletter, Issue Number 2013-12. Topics include the following:

  • IRS announces Optional Expedited Process for certain 501(c)(4) Exemption Applications
  • IRS Nationwide Tax Forums begin next week
  • Check out this summer’s IRS phone forums
  • Register for EO workshops
  • Section 509(a)(3) Supporting Organizations pages updated
  • IRS accepting applications for Low Income Taxpayer Clinic grants
  • IRS Electronic Tax Administration Advisory Committee delivers report to Congress
  • Breaking – Treasury Official Announces Anticipated Delay in Employer Mandate, Reporting Requirements

    July 8, 2013

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    From BenefitsBryanCave.com

    See the details in this article here.

    A link to the Treasury’s website with the release here.  Update 7/3: A White House blog post on this topic is also available.

    Update: We’re still digesting this news, but here’s a summary of the Treasury blog post:

    • It will be an additional year before employer and insurer reporting under Code Sections 6055 and 6056 is effective (so the first reports will be due in 2015 rather than in 2014)
    • Proposed regulations on these reporting requirements are expected this summer
    • The IRS encourages voluntary reporting in 2014
    • Since enforcement of Employer Shared Responsibility mandate hinges upon these reports, excise taxes under the mandate will not apply in 2014
    • Formal guidance on the transition period for this delayed enforcement is expected within a week
    • It is not clear whether an employer is required to make efforts toward implementation or do anything

    Expedited Processing for 501(c)(4)s

    July 7, 2013

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    There has been a lot of press concerning social welfare organizations lately, including allegations that many such organizations should not be classified as tax-exempt under Section 501(c)(4) based on their political campaign activities.  In response to criticism regarding substantial delay in processing Form 1024 Applications, as well as allegations that conservative organizations were subject to additional IRS scrutiny, the IRS has instituted an optional expedited process for organizations whose Form 1024 Applications have been pending more than 120 days.  

    Under the optional expedited process, the IRS will approve the Form 1024 Application, thus recognizing Section 501(c)(4) status, if the organization can represent (1) that it has spent and anticipates that it will spend 60% or more of both its total expenditures and total time (employee and volunteer hours) on activities that promote social welfare and (2) that it has spent and anticipates that it will spend less than 40% of both of its  total expenditures

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