As we posted, the U.S. House of Representatives and the U.S. Senate passed and sent to the President for signature legislation that makes significant changes to the U.S. tax code.  The changes are the broadest re-write of the U.S. tax code since the 1986 act and could have a widespread impact on tax-exempt organizations and charitable giving.   The following is a very brief summary of the rules impacting exempt organizations and charitable giving:

Rules Impacting Charitable Donations 

• Increase in AGI Limit. The income-based percentage limit for charitable cash contributions by individuals to public charities increases from 50 percent to 60 percent of Adjusted Gross Income (“AGI”).
• Itemized Deductions. The standard deduction is increased from $6,350 to $12,000 for singles and from $12,700 to $24,000 for married couples filing jointly.  Thus, fewer individuals will be itemizing deductions, which includes charitable deductions.  Many commentators have speculated this increase in the
  

Today, Congress passed a sweeping tax bill, as widely expected over the last few weeks. The bill passed solely along party lines, with no Democrats voting for the bill.  President Trump is expected to sign the bill into law, shortly.

The changes in the transfer tax laws made by this bill are as follows:

• The gift and estate tax exemption is doubled beginning January 1, 2018, from $5,000,000 per person to $10,000,000, indexed for inflation.  For 2018, this equals $11,200,000 for individuals and $22,400,000 for married couples. The increase applies to the generation-skipping transfer tax exemption, as well
• The foregoing increase of the gift, estate, and GST exemptions is set to expire in 2026, when the exemptions would revert to $5,000,000/$10,000,000 figures, adjusted for inflation.  This raises the question of whether, upon such expiration, there could be a so-called claw-back/penalty on any gifts made prior to 2026 which exceeded
  

Early Due Dates for W-2, W-3 and Form 1099-MISC 

Employers face a January 31, 2018, due date for filing 2017 Forms W-2 and W-3 with the Social Security Administration. This date applies to both electronic and paper filers.

Form 1099-MISC is due to the IRS and individuals by January 31 when reporting non-employee compensation payments in box 7.

Penalties for failure to file correct information returns or furnish correct payee statements have increased and are now subject to inflationary adjustments. These increased penalties are effective for information returns required to be filed after December 31, 2015.

Form 1098-T Reporting Changes and Limited Penalty Relief for 2017 Returns 

Eligible educational institutions are required to report the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year on Form 1098-T, Tuition Statement.

Announcement 2016-42 provides relief from penalties under Section 6721 and 6722 to 2017 Forms 1098-T.

Do you want to strengthen your board’s effectiveness? Do you want your board and members to be vitally engaged and forge the best possible working partnership with your executive and other staff in order to achieve more fully the organization’s mission? This workshop is for current and aspiring nonprofit staff executives and board leaders, including incoming board members, who want to learn and apply promising practices based on the latest research for making their boards even more effective and their staff-board relationships more productive and satisfying. It will also provide an opportunity to share with peers the greatest challenges and successful strategies for strengthening boards. The learning activities will mix plenary presentation, exercises and discussion,a  panel with a diverse set of nonprofit and philanthropic leaders, and small, break out group discussions. Takeaways include tools and exercises designed to increase board performance.

The workshop will address topics such as:

(1) the

Notice 2017-73, released on December 4, 2017, describes potential approaches that may be taken to address issues raised regarding the use of donor advised funds (“DAF”). The Treasury and IRS are considering developing proposed regulations under § 4967 of the Internal Revenue Code (Code) that would, if finalized, provide that: (1) certain distributions from a DAF that pay for the purchase of tickets that enable a donor, donor advisor, or related person to attend or participate in a charity-sponsored event result in a more than incidental benefit to such person under § 4967; and (2) certain distributions from a DAF that the distributee charity treats as fulfilling a pledge made by a donor, donor advisor, or related person, do not result in a more than incidental benefit under § 4967 if certain requirements are met. In addition, the Treasury Department and the IRS are considering developing proposed regulations that would

The Affordable Care Act (ACA) introduced a “pay or play” scheme, effective January 1, 2015, in which Applicable Large Employers (ALEs) must offer affordable qualifying healthcare to their full-time employees (and their dependent children) or pay a penalty. Despite President Trump’s first Executive Order (discussed here) directing a rollback of the Affordable Care Act (ACA) and instructing the Secretary of Health and Human Services to minimize the “unwarranted economic and regulatory burden of the act,” the Internal Revenue Service (IRS) quietly updated its Questions and Answers on Employer Shared Responsibility Provisions Under the ACA to include the first official guidance detailing the process for enforcement of the penalty. Notably, this update coincided with an IRS announcement that penalties for the 2015 calendar year will be assessed late this year.

The ALE penalty process starts with Letter 226J, which the IRS will send to ALEs it believes owe a penalty based on

The Internal Revenue Service reminds taxpayers looking to maximize their tax savings before the end of the year to consider charitable giving. Many taxpayers may already be planning to do so for Giving Tuesday on November 28. Giving money or goods to a tax-exempt charity before December 31 can usually be deducted on that year’s federal income tax return.

This #GivingTuesday, IRS has tips to find tax-deductible options: 

• Donating to disaster recovery efforts or a local shelter?
• Want to know the special rules to get a tax deduction from donating cars, boats and other property?
• Cash or non-cash year-end gifts to charity? What to know for a tax deduction on your IRS return.
• IRA owners over age 70½ – want to know about a different way to give?
• Hoping for a tax-deduction for your Giving Tuesday donation? Itemize or eFile your return

Resources: 

IRS YouTube videos: 

• IRS tool IRS.gov/eoselectcheck

No group has focused on building alignment and enlistment more than the non-profit, civic, and community sectors.  I’ve had the good fortune to work with some of the best – hospitals, animal shelters, the Chamber of Commerce, and industry change groups. With shallow budgets and a heavy dependence on volunteers (not to mention the careful watch of donors), the best non-profit groups not only stay afloat, they thrive by focusing on a few core goals.

Like non-profit groups, service professionals (like lawyers, consultants, accountants, and other service providers) rarely function with a “command and control” hierarchy, and instead depend on the alignment and enlistment of others – including clients, their staff, fellow professionals, or others.   

 1.  New presentations on StayExempt

• Reasonable Cause
• Self-Dealing Exception for Compensation to Disqualified Persons

  2.  Employment Tax podcasts

• Payroll Reporting for Election Workers
• 10 Minutes on Filing the Form 941-X

  3.  EO Issue Snapshots

• IRC Section 4944(c) – Taxes on Investments Which Jeopardize Charitable Purpose – Exception for Program-Related Investments
• Exclusion of Bingo from Unrelated Business Activity
• Rents from Personal Property, “Mixed Leases,” and the Rental Exclusion from UBTI
• Exclusion of Rent from Real Property from Unrelated Business Taxable Income

  4.  Fee for Form 8976

Form 8976, Notice of Intent to Operate Under Section 501(c)(4) – Organizations must pay a $50 fee at Pay.gov within 14 days of submitting the form.

  5.  Podcast on maximum loans in retirement plans

Podcast – computation of maximum loan amount from retirement plans –

Thursday, Dec. 7, 2017 from 1-4 p.m. in #202 J.C. Penney Conference Center (on the UMSL north campus)

Successful grant research includes a review of various kinds of data like giving statistic, reports, and databases. But learning to identify, evaluate, and select data resources used in grants research can be a challenge. This course will provide participants with (a) an introduction to the process of information evaluation, (b) data resources commonly available in grant development, and (c) how to use the “Foundation Database Online Professional” database to identify and evaluate funding prospects.

Instructor Brad Smith is the Nonprofit Information Resource Manager for the St. Charles City-County Library District. In that capacity, he oversees the delivery of the Library District’s specialty services to the nonprofit community.  As a representative of the Library District, he regularly provides consultation services and assistance to public, private, and nonprofit initiatives that are aimed toward enhancing community