A revision to Form 990, Return of Organization Exempt From Income Tax, is coming according to the IRS. The Treasury Department said that the changes are designed to improve transparency, strengthen tax administration, and provide clearer reporting on tax-exempt organizations’ activities.
The revisions, announced last Thursday, also focus on the government contracts, government grants, and fiscal sponsorship arrangements of Sec. 501(c)(3) organizations. You can find a copy of the release at the following web address…
https://home.treasury.gov/news/press-releases/sb0470
“When bad actors misuse charitable structures, directors and officers should understand that transparency can lead to scrutiny, accountability, and liability under the law,” Treasury Secretary Scott Bessent said in the release. Treasury and the Service expect to publish proposed regulations and hold a public comment period before finalizing the reporting changes.
Let me leave you with this…
Much earlier in my career, I did some work for charities but soon became disillusioned. These organizations supposedly clothed the naked, fed the hungry, and housed the homeless.
In reality, only 10% to 15% of each dollar donated was actually spent on these lofty goals. The rest was wasted on middle and upper managers that did little, if anything at all, to complete any work.
They seemed only good at asking for money. Calling it an educational experience is an understatement.
I would warn all of you.
Any charity receiving more than $250K in donations is supposed to complete an annual audit. And for the larger charities, those audits are publicly available.
Take a look at their numbers. If you find that the majority of donations aren’t being spent where you’d like, find a worthier cause.
Now the IRS is changing the reporting environment for Non-Profits.
Charitable organizations have been used to hide profits from everything, including gold mines and steel mills. Remind me someday to tell you the story about the furniture manufacturing business in the Carolinas, that America’s Most Prominent Televangelist owned inside his church.
Hopefully, these IRS revisions will be a change in the right direction.
As always, if you’re having difficulties with your accounting and tax work, please contact us today.
We’re all going to get through this. Let’s get through it together…
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Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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