Bryan Cave Charity Law

Charity Law

Other Posts

Main Content

Medium-Sized Charities – It Is Time To Prepare For The New Form 990 Now

July 5, 2010

Categories

The Form 990 was substantially revised in 2008.  To allow charities time to prepare, only charities with gross receipts ≥ $1 million, or total assets ≥ $2.5 million, were required to file the new Form 990 in 2008 (small and medium sized charities were required to file Form 990-N and Form 990-EZ, respectively).  The filing thresholds were reduced for 2009, and for the 2010 tax year and beyond, were further reduced and are established as follows:

  • Form 990 – Gross receipts ≥ $200,000, or total assets ≥ $500,000
  • Form 990-EZ – Gross receipts < $200,000, and total assets < $500,000
  • Form 990-N – Gross receipts normally ≤$50,000

As a result of these filing thresholds, many medium-sized charities must now prepare to file the new Form 990 in 2010.  The new Form 990 will require such charities to gather and disclose substantially greater information than before.  We strongly recommend that medium-sized charities become familiar with the new Form 990 now

Policy Time?

July 5, 2010

Categories

Policy Time?

July 5, 2010

Authored by: Keith Kehrer

The new Form 990 now requires a tax-exempt organization to disclose whether it has adopted certain governance policies, including conflict of interest, whistle-blower, document retention, and joint venture policies, to name a few.  Although governance policies are not legally required, it is generally accepted that adopting and following governance policies increases the likelihood of compliance with federal and state law and the identification and solution of potential issues.  Despite the pressure an organization’s board may be under to adopt policies, however, it is important that an organization does not merely adopt policies in order to respond positively to the Form 990 questions.  Mere adoption of a policy, without more, is generally worse than having no policy.

Small Charities – Its not to Late to File Form 990-N

July 3, 2010

Categories

Before 2006, small charities with less than $25,000 of annual gross receipts were not required to file Form 990.  After 2006, small charities are required to file Form 990-N (e-Postcard).   Failure to file Form 990-N for three consecutive years generally results in loss of tax-exempt status.  As of May 17, 2010, calendar year small charities that have not filed Form 990-N for the 2007 through 2009 tax years are in jeopardy of losing their tax-exempt status.   We suspect several thousands of small charities are currently in jeopardy of losing tax-exempt status for failure to file Form 990-N.

The IRS recently announced, however, that  it will do what it can to help small charities avoid losing their tax-exempt status.   Although the IRS has not clarified this statement, it is possible this statement means the IRS will not automatically revoke the tax-exempt status of every late filer.  If your small charity still has not filed, it is advisable to file Form 990-N as soon

Overview of Joint Venture Rules

July 1, 2010

Categories

Overview of Joint Venture Rules

July 1, 2010

Authored by: Keith Kehrer

Joint ventures between Section 501(c)(3) organizations and for-profit parties are becoming more and more common.  The attached memorandum (which may be obtained by clicking the link below) provides a brief overview of tax issues related to joint ventures between tax-exempt and for profit entities:

Structuring Joint Ventures

The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.