Every Nonprofit's Tax Guide: How to Keep Your Tax-Exempt Status & Avoid IRS Problems

Table of Contents

1. Nonprofits and the IRS

• What Do We Mean When We Say “Nonprofit”?
• The Life Cycle of a Nonprofit
• Ongoing Compliance
• IRS Audits

2. Annual IRS Filings—The Form 990

• The Nuts and Bolts of the Filing Process
• The 990-N Postcard Filing—As Simple as It Gets
• Form 990-EZ: The E-Z Way Out
• Form 990: Just Hold Your Nose and File It
• Letting the Public See Your Report Card: Disclosure of Form 990
• Notifying the IRS If You Terminate, Merge, or Contract Your Nonprofit
• What to Do if the IRS Has Revoked Your Nonprofit's Tax-Exempt Status

3. Record Keeping and Accounting

• Why Keep Financial Records?
• What Does the IRS Require?
• Do You Need an Independent Audit?
• Minding the GAAP

4. Volunteers, Employees, and Independent Contractors

• Volunteers—The Backbone Workforce of Nonprofits
• Reimbursing Your Volunteers—Know the Rules
• Unreimbursed Volunteer Expenses
• Benefits and Freebies—How to Show Your Appreciation Tax Free
• Paid Help: Employees and Independent Contractors
• Hiring Independent Contractors
• E-Filing Form 1099s
• Hiring Employees
• Affordable Care Act (ACA) and Nonprofit Employers

5. Charitable Giving—The Basics and Cash Donations

• Your Role as a Nonprofit
• Threshold Requirements for Deducting Donations
• Annual Ceilings on Charitable Deductions
• What Can a Donor Contribute?
• When Is a Contribution Made for Tax Purposes?
• Special Gifts—Earmarked, Restricted, and Conditional
• If Your Nonprofit Provides Goods or Services
• Cash Contributions
• Cash Gifts From IRAs
• Interest-Free Loans
• Quid Pro Quo Contributions
• Charity Auctions

6. Property Donations

• Annual Deduction Limit for Property Donations
• Valuing Property Donations—An Art, Not a Science
• Different Types of Property Donations
• Documenting Property Donations

7. Excessive Compensation, Sweetheart Deals, and Other Ways to Get in Trouble With the IRS

• A Nonprofit Is Not a Personal Piggy-Bank
• The IRS Intermediate Sanctions Minefield
• Transactions With Disqualified Persons—How to Avoid Problems With the IRS
• Excessive Compensation for Services: The Most Common Excess Benefit
• Correcting and Reporting Excess Benefit Transactions
• The IRS’s Sentence of Death: Revocation of Tax-Exempt Status

8. Nonprofits That Make Money and UBIT

• What Is UBIT?
• Activities Exempt From UBIT
• Do You Owe UBIT?
• Calculating UBIT With Multiple Business Activities
• Filing UBIT Tax Returns

9. Lobbying and Political Campaign Activities

• Lobbying by Nonprofits—What’s Allowed and What’s Not
• Political Campaign Activities—An Absolute Ban
• Getting Around the Restrictions

10. Help Beyond This Book

• Help From the IRS
• Other Helpful Publications and Websites

Appendix: Sample Forms

• Sample Forms
• IRS Form 990-EZ
• Sample Conflict of Interest Policy 
• Rebuttable Presumption Checklist
• Family and Business Relationship Questionnaire
• Expense Report

Index