Employee Retention Credit for Nonprofit Organizations

The Employee Retention Credit (ERC) is a refundable payroll tax credit for which business organizations, including tax-exempt organizations, may be eligible. The ERC was initially created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, then extended and modified by the Taxpayer Certainty and Disaster Tax Relief Act of [...]

Not-For-Profit Revenue Recognition

By now, most not-for-profit organizations have implemented Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958), Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. While the ASU was intended to simplify the revenue recognition decision process, many have found it complicated and have struggled to implement it correctly. The ASU [...]

IRS Takes Aim at Private Foundations

The Internal Revenue Service (IRS) has turned the old audit paradigm on its head by introducing a new enterprise, or holistic approach that allows it to more effectively target its audits. This new initiative, announced by two IRS commissioners at a tax forum held on July 10, 2020, identified over 1,000 private foundation returns associated [...]

New Law in 2019 Requires Tax-Exempt Organizations to E-file Forms

Tax-exempt organizations will be required to electronically file information returns and related forms starting in 2020. The Taxpayer First Act, enacted July 1, affects tax-exempt organizations in tax years beginning after July 1, 2019. Exempt organizations that file on a calendar-year basis will not be subject to the mandate for the year that ends Dec. [...]

FASB’s New Standard for Nonprofit Financial Statements

The Financial Accounting Standards Board (FASB) has rolled out the red carpet for the first major changes to its standards for nonprofits’ financial statement presentation in more than two decades: Accounting Standards Update 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. The new mandate is intended to clarify net asset classification requirements. In [...]

2019-12-30T13:38:00-06:00October 7th, 2019|NONPROFIT REPORTING STANDARD, NOT-FOR-PROFITS|

How Nonprofits Cluster Functional Expenses on Financial Statements

Like grapes, a nonprofit entity’s expenses are “clustered” on the organization’s financial statement. Nonprofits are required to report financial information using functional expense classification, which is a method of grouping expenses according to their purposes (e.g., program services and supporting services). By contrast, natural expense classification is based on the type of expense – such [...]

2019-12-30T12:45:58-06:00March 2nd, 2019|NONPROFIT REPORTING STANDARD, NOT-FOR-PROFITS|

Nonprofit Board Review of Form 990

While it is true that the annual Form 990 each nonprofit organization must file with the IRS is filled with numbers, it also contains much more. The Form 990 provides insight into the organization and how it functions and—unlike tax reports of other entities—is a document that must be made available to the general public. [...]

2021-09-27T08:17:22-05:00February 7th, 2019|NONPROFIT REPORTING STANDARD, NOT-FOR-PROFITS|