This article provides basic information regarding whether a nonprofit organization’s owned real property is exempt from Georgia’s property tax, how to apply for property tax exemption, and best practices for maintaining that exemption.
Have you ever shopped at a store or eaten at a restaurant that was operated by a nonprofit? Many organizations that have 501(c)(3) tax-exempt status conduct such commercial business activities in order to provide training opportunities for clients and make money for their ongoing programming. Such organizations do not have to any pay Federal income taxes, right? Not necessarily. This article helps explain whether income generated through training programs is taxable as unrelated business income.
The U.S. Tax Court recently ruled that an individual who had donated over $22,000 to his church could not take a tax deduction for the contribution because the church had not sent the donor the proper acknowledgment. According to the IRS, 501(c)(3) organizations must send a contemporaneous written acknowledgment to donors of over $250 stating:
• Name and address of the charity, date of contribution, and amount of contribution; and
• Whether charity provided any goods or services in return for the contribution. If so, charity must provide a good faith estimate of the value of these goods.
Because the church did not include a statement in the acknowledgment that the donor had not received anything in exchange for their donation, the IRS took the position that no portion of the $22,000 was deductible.
The Tax Court also held that the acknowledgment must be “contemporaneous” meaning that it must be received prior to the donor’s filing of the tax return or the due date of the return (including extensions), whichever came first. The church wasn’t able to fix their mistake after the fact by sending a revised acknowledgment because it was received too late.
You can avoid this very uncomfortable situation with your donors by making sure you promptly send an acknowledgment with the required language.
Organizations with a fiscal year end of December 31 must file a 2012 Form 990, Form 990-EZ or Form 990-N (or an extension) by May 15, 2013. You might notice that the IRS revised the 2012 version of the forms and the accompanying schedules. A summary of those changes can be found here. The summary includes IRS reminders such as:
• Organizations should not include social security numbers on Form 990 because it is publicly available.
• Organizations are no longer required to list addresses for officers, directors or employees.
• If an organization accepts a contribution in the name of one of its programs, its donor acknowledgment should indicate the organization’s name.
For helpful resources from the IRS regarding the Form 990, click here.
Start-up nonprofits should note that they should begin filing annual Form 990s as soon as they are incorporated, even if they have not yet received 501(c)(3) tax-exempt status from the IRS.
Please note that Pro Bono Partnership of Atlanta is unable to assist with Form 990 filings.
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Many 501(c)(3) organizations provide scholarships or other financial assistance to individuals, or would like to do so but have questions about how to set up such programs.
This webcast will address the following issues:
• What constitutes a scholarship versus other types financial assistance;
• The laws which affect the awarding of scholarships, including the type of reporting required by the IRS;
• Best practices for designing and setting up scholarships/financial assistance programs; and
• Best practices for maintaining and managing scholarships/financial assistance programs.
Presenter: Ashley Halfman, Miller & Martin PLLCTo view the archived version of this webcast, click here.
Unlike many other states, the State of Georgia does not grant a blanket exemption from sales and use tax to Section 501(c)(3) tax-exempt organizations. In order to be exempt from paying tax on goods that are purchased or sold by the organization, the organization or the transaction must fit one of the specific, narrow exceptions laid out in the Georgia Code and the organization must obtain an exemption determination letter from the Georgia Department of Revenue.
Unlike some states, Georgia does not provide a general exemption from the payment of state sales and use tax for nonprofit organizations. To be exempt from Georgia state sales and use tax, a nonprofit must fit into a specific exemption category. This article describes some of the exemptions that may apply to nonprofit organizations.
As a 501(c)(3), there is a limit on the amount of lobbying your organization can do and an absolute prohibition on any political campaign activity. This webcast will answer the following questions:
• What is the difference between lobbying and political activity?
• What amount of lobbying is acceptable?
• How can your organization do advocacy work without getting into trouble with the IRS?
• What are the danger areas for 501(c)(3) organizations when it comes to political activity?
• What is a 501(h) election?
Presenter: Doug Chalmers, Managing Member, Political Law GroupTo view the archived version of this webcast, click here.
Form 990 is the annual tax information return that 501(c)(3) tax-exempt organizations must file with the IRS each year. Even organizations that have not yet filed for 501(c)(3) status but intend to do so, or that have filed for 501(c)(3) status but have not yet received it, are required to file some version of the form with the IRS each year. Which version of the Form 990 that must be filed generally depends on the economic activity of the organization. This article answers basic questions about the Form 990.
Lobbying vs. Advocacy
Does your organization lobby for political change? You’re allowed, but there are limits. What is the difference between lobbying and advocacy? Protect your nonprofit status by getting to know these rules.
By: Pro Bono Partnership of Atlanta