Understanding Your 403(b) Plan

A common misconception is that all 403(b) employee benefit plans are exempt from filing the Form 5500 and an annual plan audit. Over five years ago this was true, and these plans were exempt from the Employee Retirement Income Security Act of 1974 (ERISA). However, beginning in 2009, some 403(b) plans are now required to …

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Properly Classifying Property Held for Sale

Proper classification of assets on your entity’s statement of financial position (SOFP) and disclosure in the footnotes is important for both accuracy and transparency purposes. The users of your financial statements should know all significant purposes and uses of the assets listed. When you contact a broker to sell any property, you may need to …

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Requirements for Communications to Attendees at Your Special Event

You may be aware of the rule for sending an acknowledgement to a donor after receiving a contribution, but are you also aware of the IRS requirements when someone attends a fundraising event? Usually, special events provide some sort of benefit back to the attendee, so that only a portion of their ticket cost is …

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Exempt Organizations and Sales Tax

In Arizona, entities are required to pay a “transaction privilege tax” on sales of goods, most commonly referred to as a “sales tax.” However, under certain circumstances, entities are exempt from collecting and remitting this tax. If your entity is recognized by the IRS as a non-profit charitable organization under IRC Code section 501(c)(3), retail …

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Employees Donate School Supplies to At Risk Youth

Henry & Horne team members collected over 800 items for a back-to-school drive to benefit Youth and Families First. From backpacks, notebooks and calculators to binders, tissues and plastic bags, our team members overwhelmingly showed their generosity by donating so many supplies. Youth and Families First is a non-profit direct services provider. The organization provides …

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What is the Difference Between Donor-Advised Funds and Restricted Donations?

Donors advising on the use of their donation sounds relatively the same as donors restricting the use of their donation, doesn’t it? These are actually very different concepts. Donor advised funds are separately identified accounts that are maintained by a public charity. After the donor makes an unrestricted donation to the donor advised fund/account, the …

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IRS Creates1023-EZ Streamlined Application for Tax Exempt Status

For an organization to be recognized as a 501(c)(3) tax exempt organization, it is generally required to submit Form 1023 to the IRS. Form 1023 is a 28 page, time intensive form that may be difficult to complete for many smaller nonprofits. As a result the IRS is currently in the process of creating Form …

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Properly Identifying and Reporting Federal Funding

If your entity utilizes grant funding, it is important to identify if that funding is obtained from the federal government, whether by direct funding or a pass-through agency. Per Circular A-133 section 300, the grantee is responsible for identifying federal awards that must be reported on a supplementary statement to the financial statements: the Schedule …

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Determining Unrelated Business Income

In order to address cash flow problems, many not-for-profit organizations seek additional revenue streams in order to continue to carry out their missions.  But not-for-profit organizations should be aware of whether or not their activities are related to their organization’s exempt purpose. When activities are considered unrelated to the organization’s exempt purpose, the revenue earned …

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Self Dealing in Private Foundations

Those involved in governance of private foundations need to be careful about certain types of transactions, or they can find themselves facing substantial excise taxes that are required to be paid directly by the individuals involved. The IRS defines certain types of transactions as “self-dealing” when they are carried out between the foundation and “disqualified …

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