Edward T. Yoder, CPA, MSA

Starting on January 1, 2024, millions of small businesses will be required to file a new information reporting form as part of the Corporate Transparency Act. Many PBMares clients will be affected.

Two previous articles in this series went into detail about how nonprofits can incur taxable income from advertising or sponsorship sales, and how different the taxable impact can be depending on the relationship of certain costs to certain types of income. There is another important consideration of UBTI and advertising: allocable membership receipts.

Nonprofits can generate revenue from their periodicals through advertising; while this type of revenue is considered to be an unrelated trade or business activity, it might not always be taxable. The key is to understand the relationship between certain costs and types of income.

Nonprofits can run into issues when they accept advertising or sponsorship dollars if they don’t know the rules of unrelated business income tax. Knowing the difference between the two scenarios can help to minimize or manage tax liability.

Final IRS regulations will require most social clubs and tax-exempt organizations to rework their unrelated business taxable income worksheets to avoid using an outdated expense allocation method.

From corporate tax changes to clean energy tax credits, the 179D commercial building deduction, and more, the Inflation Reduction Act contains a myriad of tax law changes for 2023 and beyond. This article details 12 tax changes likely to impact most taxpayers.

The IRS has warned taxpayers about pandemic relief fraud before. Employee retention credit fraud is now so widespread that the IRS added it to its annual list of Dirty Dozen tax scams.

Learn about changes to the Clean Vehicle Credit which makes it more complicated to qualify for the full tax credit, including manufacturer requirements, the impact of income thresholds and the effort to promote US manufacturing.

For businesses contemplating a commercial project, the §179D deduction, a provision from the Inflation Reduction Act, is now available for any qualifying commercial energy-efficient building.

The IRS recently warned employers to beware of advertisements and solicitations that promise tax refunds that seem too good to be true. They promise business owners lucrative tax refunds from the Employee Retention Credit through filing amended payroll tax returns.

UBTI reporting for exempt organizations can be challenging. Exempt organizations investing in partnerships should ensure that the K1 reporting from the partnership provides the information necessary to ensure correct reporting.

Starting a nonprofit often requires registering with the state before the organization can fundraise. States like Virginia, Maryland, and North Carolina all have different rules and requirements for nonprofit registration.

2021 was described as the worst year ever for the IRS. Several compounding problems, exacerbated by COVID-19, led to a historic backlog. Now, the agency is taking steps to improve service.

Many employers do not realize they could benefit from the ERC.  As businesses close their books and records for 2021 and begin to work on tax compliance, it is a good opportunity to revisit the ERC to clear up any confusion that may exist.

The IRS has overhauled the 2020 Form 990T “Exempt Organization Business Income Tax Return” and created a new Schedule A “Unrelated Business Taxable Income From an Unrelated Trade or Business” to allow reporting of separate unrelated business activities.

On March 15, 2021, the IRS announced in an e-News Update for Charities & Nonprofits that mandatory electronic filing of 2020 Forms 990-T has commenced.

On July 15, 2021, the IRS announced in an Exempt Organization update the electronic filing mandate for Form 990-EZ.

The American Rescue Plan Act (the Act) s provides a number of items to help aid economic recovery out of the coronavirus pandemic. Read on for a summary of the Act’s provisions.

The American Rescue Plan Act finally gives 501(c)7 Social Clubs the opportunity to apply for Payroll Protection Program (PPP) loans. But you better act fast because the funding for the second round of the PPP loans closes on March 31, 2021.

At the end of last year, many clubs received the exact same form letter from the IRS, Letter 6176 (4-2019) Catalog Number 72211B.  The letter appears to have been generated by the IRS and sent to many  501(c)(7) exempt organizations reporting nonmember income regardless of the nonmember percentage of gross receipts. 

The IRS recently issued proposed regulations regarding separately computing UBTI for each trade or business activity that could increase a not-for-profit’s tax exposure and liability.

How could a change in the tax law passed in 2017 have a substantial impact on clubs today? Given the recent business disruptions caused by the coronavirus, unrelated business income might not seem like a big deal.

The Senate and the House of Representatives have both passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The bill provides $2.2 trillion of Federal funds to keep the economy functioning.  But what is in the law to aid Non-profits?

On March 13, 2020, the President of the United States issued an emergency declaration under the Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease pandemic.

Nonprofits are now required to silo Net Operating Losses (NOLs) from one unrelated business activity so that it doesn’t create a reduction of taxable income from another profitable unrelated business activity. 

President Trump signed the latest federal government spending bill on Friday December 20, 2019. The bill includes many tax law changes and extends several expired provisions. The bill also incorporates the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. Read on for three changes from the SECURE Act that all taxpayers should know.

Congress has passed a $1.4 Trillion spending bill to avoid a government shutdown which includes a repeal of the tax on nonprofit organizations that provided qualified transportation fringe benefits, otherwise known as the “parking tax”. Any nonprofit that may have paid tax on the transportation fringe benefits should file an amended 990T to claim a refund of the taxes paid.

The tax reform bill of 2017 brought changes to the deductible amount from a for-profit company and now nonprofit executive’s compensation deductions are changing, too. Code section 4960 further explains the 21% excise tax on the amount of compensation paid by an applicable tax-exempt organization, ATEO.

While a club may be tax-exempt, it may be subject to tax on its unrelated business activities.  Read on to learn more as well as to download PBMares’ “Member Function Questionnaire” for help in gathering the information required by the IRS.

Read more on the benefits and drawbacks private clubs must consider when deciding whether to operate as a taxable or tax-exempt organization.

Under the Tax Cut & Jobs Act, nonprofits are required to allocate parking expenses provided to employees and report unrelated business taxable income (UBTI) on the transportation fringe benefit. Learn about the four-step process used to determine the amount of employee related parking expenses subject to UBTI.

Clergy members carry “dual tax status,” meaning they are considered “self-employed” for Social Security purposes but considered an “employee” for income tax purposes. Because of this dual status, many clergies do not file their taxes correctly and often miss-out on tax benefits. Understanding the following top ten mistakes clergy make when filing taxes will help you file correctly in the future.

In June 2018, Giving USA issued their annual giving report estimating charitable giving in the U.S. totaled $410 billion for 2017, an increase of 5.2 percent or $20.38 billion over the prior year. Giving by each of the four major types, Individuals, Foundations, Bequests, and Corporations, saw increases over the prior year.

Were you recently invited to donate to a friend’s Gofundme account, or have you participated in a colleague’s Kickstarter campaign? If so, you are not alone. Crowdfunding, the process of raising small contributions from a large number of people for a specific project facilitated through websites, has exploded over the years.

The 2017 Tax Cuts and Jobs Act (the Act) passed by Congress on December 22, 2017 marks the most significant tax law changes in over 30 years. Most taxpayers will see their tax liability decrease. The Congressional Budget Office estimates the Act will reduce tax revenues by $1.455 trillion over the next 10 years. But all is not good for non-profit organizations as there are changes in the Act that may negatively impact charitable contributions.