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Advisory Committee on Tax Exempt and Government Entities (ACT) Presents its Report of Recommendations on June 8, 2016

June 16, 2016

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On June 8, 2016, the 21 members of the ACT presented its 15th report of recommendations to the IRS in a public meeting in Washington, DC.

The ACT report addressed five issues:

  • Employee Plans: Analysis and Recommendations Regarding Changes to the Determination Letter Program
  • Exempt Organizations: Stewards of the Public Trust: Long-Range Planning for the Future of the IRS and the Exempt Community
  • Federal, State and Local Governments: Revised FSLG Trainings and Communicating with Small Local Governments
  • Indian Tribal Governments: Survey of Tribes Regarding IRS Effectiveness with Current Topics of Concerns and Recommendations
  • Tax Exempt Bonds: Recommendations for Continuous Improvement and Enhancing Resources in the Tax Exempt Bond Market

ACT members provide observations about current or proposed IRS policies, programs and procedures, and suggest improvements. The members are selected by the Commissioner of the IRS and then appointed by the Department of the Treasury. The IRS

Changes to the Fair Labor Standards Act May Affect Employee Benefits

June 15, 2016

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The United States Department of Labor recently issued a Final Rule updating the Fair Labor Standards Act (the “FLSA”) that includes an increase in the standard salary level and that will take effect December 1, 2016. Under the FLSA, certain employees may be exempted from overtime pay for working more than 40 hours per week if their job duties primarily involve executive, administrative, or professional duties and their salary is equal to or greater than the required salary levels.

Among other changes made by the Final Rule, the threshold salary levels have been dramatically increased and will continue to be automatically updated every three years in the future. Prior to the Final Rule, the standard salary level was $455/week or $23,660/year.  As of December 1, 2016, the standard salary level will be $913/week or $47,476/year.  Highly compensated employees are subject to a less stringent job duties test than lower compensated

New IRS Memo Confirms Tax Treatment of Wellness Programs & Incentives

June 14, 2016

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In a recently released IRS Chief Counsel Memo, the IRS confirmed that wellness incentives are generally taxable. The memo also, indirectly, confirmed the tax treatment of wellness programs more generally.

As to the incentives, the IRS held that a cash payment to employees for participating in a wellness program is taxable to the employees. The memo did not deal with incentives paid to dependents, but we presume those would be taxable to the applicable employee as well.  The IRS did say that certain in-kind fringe benefits (like a tee shirt) might be so de minimis as to be exempt as fringe benefits.  Confirming the IRS’s long-standing position, however, cash does not qualify for this exception and is taxable.

This tax treatment also applies to premium reimbursements if the premiums were paid for on a pre-tax basis through a cafeteria plan. Therefore, if employees who participate in a wellness program

EO Update: e-News for Charities & Nonprofits

May 17, 2016

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Some Form 990-N Electronic Filing System (e-Postcard) users may see error messages

The Form 990-N online filing system moved from Urban Institute to IRS.gov in February. While the new system has been successful, a very small percentage of users see site errors while registering or submitting the form. The IRS offers this advice:

  • Review the steps listed on How to File Form 990-N. Pay particular attention to the “text character” restrictions.
  • The Form 990-N (e-Postcard) User Guide will explain each step in the filing process.
  • If site errors are unresolved, call TE/GE Customer Account Services at 877-829-5500. A representative will gather your Form 990-N information for filing on your organization’s behalf.
  • Organizations will not be penalized for filing late if it was caused by website issues. Organizations should continue efforts to file, even if they are late.

For more on filing Form 990-N, see the

EO Update: e-News for Charities & Nonprofits

May 11, 2016

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  • EP and EO participating in 2016 IRS Nationwide Tax Forums – Register Now
  • Register for IRS May 12 webinar: Reporting Compensation on Form 990 and Form 990-EZ
  • Register for IRS May 19 webinar: Understanding the Universal Availability Rules in a 403(b) Retirement Plan
  • 1.  EP and EO participating in 2016 IRS Nationwide Tax Forums – Register Now

    Employee Plans and Exempt Organizations will participate in the 2016 IRS Nationwide Tax Forums in five cities starting in July. The forums offer three days of seminars and workshops featuring speakers from both the IRS and tax practitioner organizations. In addition to getting the latest tax information, tax professionals can earn continuing education credits for their attendance.

    Read article.

    2.  Register for IRS May 12 webinar: Reporting Compensation on Form 990 and Form 990-EZ

    1 p.m., ET

    Learn about:

    • How to report compensation
    • How to complete Form 990 and Form 990-EZ
    • What

    EO Update: e-News for Charities & Nonprofits

    May 9, 2016

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  • IRS Announcement 2016-17: Limited Penalty Relief for Filers of Form 1098-T, Tuition Statement
  • Register for IRS May 12 webinar: Reporting Compensation on Form 990 and Form 990-EZ
  • Register for IRS May 19 webinar: Understanding the Universal Availability Rules in a 403(b) Retirement Plan
  • Basic Financial Oversight and Management for Nonprofit Organizations

    April 29, 2016

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    When: Thursday, May 12, 2 p.m. to 5 p.m. Where: # 92 J.C. Penney Conference Center on the UM-St. Louis North Campus Fee: $ 25

    Program Description: Every organization should have board or staff members that possess financial credentials and/or experience and are charged with the primary responsibility of reporting or managing the financial matters of the nonprofit.  However, board and staff members whose expertise is other than financial still need the ability to monitor and manage the financial condition of the organization.  This is an introductory, basic course covering important financial management and oversight principles and activities in every nonprofit organization.

    Attendees will learn:

    • How to manage a range of budget and financial matters in relation to your fiscal year
    • Indicators of financial health as well as how to detect potential trouble spots
    • A basic understanding of nonprofit financial statements
    • Plain-language (non-accountant-speak) financial concepts, activities and

    IRS EO Update

    April 28, 2016

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    IRS EO Update

    April 28, 2016

    Authored by: Keith Kehrer

    Register for IRS May 12 webinar: Reporting compensation on Form 990 or Form 990-EZ

    Don’t miss this event!

    May 12, 1-2 p.m., ET

    Learn about:

    • How to report compensation
    • How to complete Form 990 and Form 990-EZ
    • What has to be reported
    • Other compensation
    • Exceptions
    • Highest compensated employees

    Register for this webinar.

    Read IRS TE/GE “Issue Snapshots”

    The IRS Tax Exempt and Government Entities (TE/GE) Knowledge Management team periodically issues research summaries called “Issue Snapshots” on tax-related issues for practitioners. They are posted on IRS.gov’s electronic reading room page under “Training and Reference Materials.” Bookmark and check the page often for helpful new materials.

    Recent articles include:

    New ACA, et. al. FAQs Cover Items From “Top” to “Bottom”

    April 26, 2016

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    On April 20, the “Big Three” agencies (DOL, Treasury/IRS, and HHS) released another set of FAQs (the 31st, for those of you counting at home). Consistent with earlier FAQs, the new FAQs cover a broad range of items under the Affordable Care Act, Mental Health Parity and Addiction Equity Act, and Women’s Health Cancer Rights Act. The authors are admittedly curious about how “Frequently” some of these questions are really asked, but we will deal with all of them in brief form below.

    1. Bowel Preparation Medication – For those getting a colonoscopy, there is good news. (No, you still have to go.) But the ACA FAQs now say that medications prescribed by your doctor to get you ready for the procedure should be covered by your plan without cost sharing. Plans that were not already covering these at the first dollar will need to start.

    2. Contraceptives – As a reminder, plans are

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