February 2016 Newsletter

"I was so fortunate to have been introduced to Aaron Struck by the CEO of a local non-profit...his presentations to our...staff were marked with professionalism, attentiveness to our needs, and an earnestness to help us find balance in caring for employees while being fiscally responsible."

Marianne Vick

Faith Community

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From the President

Overseeing the financial and compliance health of your organization is a complex task. Ever increasing regulations, changing technologies, potential for IRS or state audits, and an increasingly less sympathetic general public are just a few of the challenges facing executives, treasurers, accountants, and bookkeepers.

At CMA we just finished hosting a series of annual update seminars around Northern California and Nevada to share with our members and friends all the latest changes to the tax codes that will impact ministries in the years ahead. If you were not able to be with us at one of these seminars you can still benefit from them by purchasing copies of the materials in our online Store.
In March we will continue our update by holding seminars in San Jose and Reno, where local attorneys who specialize in the employment law arena will speak on all the latest changes in federal and state specific regulations that will be of interest to faith-based organizations. We encourage you to make plans now to attend one of these seminars. For those of you out of the area and unable to attend we will be sure to post any materials from these events on our website. As usual, these materials are free to our members. There will be a small charge for non-members.

In the meantime I hope you find this month's articles useful your quest to keep your organization safe and compliant.

Yours in His Service,

Steve Boersma

President/CEO

Tax-Free Distributions from IRAs to Charities

Since 2006, IRA owners who are at least 70 ½ years of age have been able to make tax-free distributions of up to $100,000 annually from a traditional IRA or ROTH IRA to a qualified, tax-exempt 501(c)(3) church or charity. With the recent passage of the PATH Act of 2015 this special provision has become a permanent fixture in the Internal Revenue tax code.

Here are a few things to keep in mind when thinking about making (or receiving) such a donation:

The IRA owner must be age 70 ½ or older.
The donor must directly transfer the money free of any tax obligations to an eligible organization.
read more...

Annual Filing Requirement for Small Exempt Organizations

(Filing process changes beginning 2/29/16)

Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less are required to electronically submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations and not required to either File Form 990 or Form 990EZ. Form 990-N must be completed and filed electronically. There is no paper form. Form 990-N filers may choose to file a complete Form 990 or Form 990-EZ instead, but under normal circumstances this is not recommended.

Form 990-N filing due date

Form 990-N is due every year by the 15th day of the 5th month after the close of your tax year. ( read more)

Dissolving a Dormant California Nonprofit

Approximately 150,000 nonprofit corporations are registered in California. However, many of them are dormant. If these inactive corporations fail to make routine filings with the Secretary of State (SOS) and Franchise Tax Board (FTB), they risk triggering a series of events. First, they risk losing their good standing for failing to file a simple Statement of Information. If this filing is not attended to, they will lose any tax exemption they have with the FTB. At that point, minimum franchise taxes ($800), penalties and interest will begin to accrue... (read more)

Receipting Charitable Donations

In late January of this year the IRS announced that it was withdrawing proposed regulations released in September of 2015 that would have allowed charities to file information returns with the IRS and donors instead of providing contemporaneous written acknowledgments of charitable donations ( REG-138344-13 ). Charities that elected to use the new procedure would have been required to obtain donors' Social Security or other tax identification numbers (TINs) to complete the information return. (read more)

Employment Law

Union Organizing at Religious

Colleges and Universities

Union organizing directed at religious college and university faculties has gained momentum since the National Labor Relations Board ("Board") issued its decision in Pacific Lutheran University ("PLU") in 2014. In PLU, the Board adopted a new, two-part standard for determining whether to assert jurisdiction over faculty at religiously-affiliated colleges and universities. Under the PLU standard, the Board will assert jurisdiction unless: 1) the college or university holds itself out as providing a religious educational environment; and 2) the college or university holds the petitioned-for faculty out as performing a specific role in creating or maintaining the university's religious educational environment. (read more)

DISCLAIMER

This information is provided with the understanding that CMA is not rendering tax, accounting, legal, or other professional advice. Professional advice on specific issues should be sought from a qualified CPA, attorney, or other professional.