A step-by-step resource

Every Nonprofit's Tax Guide

How to Keep Your Tax-Exempt Status & Avoid IRS Problems

The essential tax reference book for every nonprofit

Keep your nonprofit's tax-exempt status and stay out of IRS trouble with this comprehensive tax guide.  This practical, thorough, and easy-to-read book explains both ongoing and annual compliance requirements for nonprofits, including:

  • rules for charitable giving and cash donations
  • annual IRS filings and disclosures, including the IRS Form 990
  • conflict of interest, UBTI, and other IRS nonprofit tax rules

See below for a full product description.

  Available as part of the Nolo's Nonprofit Bundle

  • Product Details
  • Nonprofits enjoy privileges not available to other organizations. But these privileges come with obligations: Nonprofits must comply with special IRS rules and regulations to maintain their tax-exempt status.

    Practical, comprehensive, and easy to understand, Every Nonprofit’s Tax Guide explains ongoing and annual IRS compliance requirements for nonprofits, including:

    • a detailed explanation of Form 990
    • requirements for filing Form 990-EZ electronically
    • conflicts of interest and compensation rules
    • charitable giving rules
    • unrelated taxable business income rules
    • lobbying and political activity restrictions, and
    • nonprofit bookkeeping.

    Whether you are just starting your nonprofit or are well established, you’ll find all the information you need to avoid the most common issues nonprofits run into with the IRS.

    “Nolo is a pioneer in both consumer and business self-help books and software.”—Los Angeles Times

    “In Nolo you can trust.”—New York Times

    ISBN
    9781413329223
    Number of Pages
    480
    Included Forms

     

    • IRS Form 990-EZ
    • Sample Conflict of Interest Policy (from IRS Form 1023, Appendix A, With Annual Conflict of Interest Acknowledgment Statement)
    • Rebuttable Presumption Checklist
    • Family and Business Relationship Questionnaire
    • Expense Report
  • About the Author
  • Table of Contents
  • Introduction

    1. Nonprofits and the IRS

    • What Do We Mean When We Say “Nonprofit”?
    • The Life Cycle of a Nonprofit
    • Ongoing Compliance
    • IRS Audits

    2. Annual IRS Filings—The Form 990

    • The Nuts and Bolts of the Filing Process
    • The 990-N Postcard Filing—As Simple as It Gets
    • Form 990-EZ: The E-Z Way Out
    • Form 990: Just Hold Your Nose and File It
    • Letting the Public See Your Report Card: Disclosure of Form 990
    • Notifying the IRS If You Terminate, Merge, or Contract Your Nonprofit
    • What to Do If the IRS Has Revoked Your Nonprofit’s Tax-Exempt Status

    3. Record Keeping and Accounting

    • Why Keep Financial Records?
    • What Does the IRS Require?
    • Do You Need an Independent Audit?
    • Minding the GAAP

    4. Volunteers, Employees, and Independent Contractors

    • Volunteers—The Backbone Workforce of Nonprofits
    • Reimbursing Your Volunteers—Know the Rules
    • Unreimbursed Volunteer Expenses
    • Benefits and Freebies—How to Show Your Appreciation Tax Free
    • Paid Help: Employees and Independent Contractors
    • Hiring Independent Contractors
    • E-Filing Form 1099s
    • Hiring Employees
    • Affordable Care Act (ACA) and Nonprofit Employers

    5. Charitable Giving—The Basics and Cash Donations

    • Your Role as a Nonprofit
    • Threshold Requirements for Deducting Donations
    • Annual Ceilings on Charitable Deductions
    • What Can a Donor Contribute?
    • When Is a Contribution Made for Tax Purposes?
    • Special Gifts—Earmarked, Restricted, and Conditional
    • If Your Nonprofit Provides Goods or Services
    • Cash Contributions
    • Cash Gifts From IRAs
    • Interest-Free Loans
    • Quid Pro Quo Contributions
    • Charity Auctions

    6. Property Donations

    • Annual Deduction Limit for Property Donations
    • Valuing Property Donations—An Art, Not a Science
    • Different Types of Property Donations
    • Documenting Property Donations

    7. Excessive Compensation, Sweetheart Deals, and Other Ways to Get in Trouble With the IRS

    • A Nonprofit Is Not a Personal Piggy Bank
    • The IRS Intermediate Sanctions Minefield
    • Transactions With Disqualified Persons—How to Avoid Problems With the IRS
    • Excessive Compensation for Services: The Most Common Excess Benefit
    • Correcting and Reporting Excess Benefit Transactions
    • The IRS’s Sentence of Death: Revocation of Tax-Exempt Status

    8. Nonprofits That Make Money and UBIT

    • What Is UBIT?
    • Activities Exempt From UBIT
    • Do You Owe UBIT?
    • Calculating UBIT With Multiple Business Activities
    • Filing UBIT Tax Returns

    9. Lobbying and Political Campaign Activities

    • Lobbying by Nonprofits—What’s Allowed and What’s Not
    • Political Campaign Activities—An Absolute Ban
    • Getting Around the Restrictions

    10. Help Beyond This Book

    • Help From the IRS
    • Other Helpful Publications and Websites

    Appendix

    • How to Use the Downloadable Forms on the Nolo Website
    • Editing RTFs
    • List of Forms

    Index

  • Sample Chapter
  • Introduction

    This book is for you if you have a nonprofit that is up and running, whether it’s been one day or one decade. You have dealt with the IRS already because you have your tax-exempt status. Now you’re wondering what else the IRS has in store for you and your nonprofit? The answer is: A lot.

    Your nonprofit’s relationship with the IRS doesn’t end when you receive your tax-exempt status. Indeed, that’s only the beginning. The IRS will continue to oversee your compliance with the myriad of complex tax laws and regulations governing nonprofits. Dealing with the IRS and its rules is the price all nonprofits pay in return for the substantial tax benefits they receive.

    Failure to comply with nonprofit tax laws can lead to dire consequences—revocation of your tax-exempt status, or the imposition of taxes and penalties on your nonprofit, or even on your officers, directors, or employees personally. The Tax Cuts and Jobs Act (TCJA), the most far-reaching tax reform law in over 30 years, took effect in 2018. It dramatically altered the tax environment for charitable giving and imposed new restrictions and rules for nonprofits.

    Fortunately, most nonprofits can handle IRS compliance tasks themselves or with minimal help. This book can help. It contains step-by-step guidance on:

    • how to file annual information returns with the IRS
    • what types of records your nonprofit is required to keep
    • classifying workers as employees or independent contractors and dealing with employment taxes
    • how to comply with the tax laws governing the use of volunteers
    • the deductibility of charitable contributions
    • when you must provide written substantiation for contributions
    • avoiding IRS taxes or penalties due to conflicts of interest, payment of excessive compensation, insider transactions, and other prohibited behavior
    • how to avoid having to pay taxes on side businesses your nonprofit conducts to earn extra income
    • what types of lobbying are and are not allowed, and
    • how to steer clear of the prohibition on political activity.

    Running a nonprofit is difficult enough these days without having to worry about the IRS looking over your shoulder. Turn to this book whenever you have a question about IRS rules or nonprofit compliance issues.

    TIP
    What this book is not. This book is not about how to form a nonprofit corporation or apply for IRS recognition of your nonprofit’s tax- exempt status. (For guidance on these tasks, refer to How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).) It has been written primarily for Section 501(c)(3) organizations that qualify as public charities and it does not cover the special tax rules applicable to private foundations. Moreover, while much of the material here is applicable to nonprofits other than Section 501(c)(3) organizations, this book has not been written with such organizations in mind.


    We hope you enjoyed this sample. The complete book is available for sale here at Nolo.com.

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Review

By Anonymous

Very helpful

Posted on 11/9/2021

Quality control - printing

By Sheryl J.

Good information, however the quality of the book cover was terrible. Part of the back cover was cut off on a perfectly straight slant to where I couldn't read the words.

Posted on 11/9/2021

Where must the money go?

By Alan K.

This is a must for any Charitable 501c3 treasury. When accepting monies from the public for charitable purpose you must know the rules.

Posted on 11/9/2021

Review

By Alonzo S.

Amazing Book to purchase

Posted on 11/9/2021

Review

By Kathryn B.

I found just the information I needed and it was clearly explained.

Posted on 11/9/2021

Don’t miss this book!

By WILLIAM H.

I’m new to making decisions for a Nonprofit. This guide helped in so many ways and it will in the future. It answered questions i did not know to ask in addition to the ones I did have. It is significant in needed details regarding making money and donations. If you miss the section on contractors, the IRS is willing to teach you, but not for 40 bucks. It has clear instructions and reasoning.

Posted on 11/9/2021

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