Archive: tax-exempt

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Potential Changes Ahead for the Johnson Amendment

The new administration has made mention of repealing the so-called Johnson Amendment. What would a repeal mean? In 1954, Lyndon Johnson (later the 36th President of the United States) was the Democratic Senate Minority Leader running for reelection. On the road to reelection, Johnson faced a conservative nonprofit group calling for the election of his opponent. […]
April 4, 2017
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New Document Request Process for IRS Audits of Tax Exempt Entities

Effective April 1, 2017, the tax exempt and government entities division of the IRS will implement its new process on issuing information document request (IDR). While the purpose of this change is to ensure that IRS counsel is well prepared to enforce IDRs, this new process does benefit taxpayers. In the past, the examining agent […]

Note to Not-For-Profits: Don’t Ignore Sales Tax

Making assumptions when it comes to sales and use tax is ill-advised for any entity’s approach to compliance.  This is especially the case for not-for-profits.  Exemption from federal income tax can count for nothing in the sales and use tax world, and states are anything but uniform when it comes to exemptions available for not-for-profits.  […]

A Welcome Break on the Fee for 1023-EZ Application for Tax Exempt Status

Effective July 1, 2016, the application fee for filing the Form 1023EZ has been lowered to $275. The old fee was $400. That’s a savings of $125, and is a welcome relief to small nonprofits applying for tax exempt status. The new streamlined Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of […]

IRS Issues Guidance on Notification to Operate as a 501(c)(4) Social Welfare Organization

The IRS on July 8, 2016, issued temporary regulations describing how to communicate with the IRS if you are starting a new social welfare organization, also known as a Section 501(c)(4) organization. A new online form, Form 8976, is required to be submitted to the IRS electronically within 60 days after being established. If you […]

Navigating Sales Tax Complexities for Construction Companies: An Aronson Q&A

Q. How do you file for a refund in Maryland for sales tax paid on purchases for exempt jobs in the District of Columbia? A. Maryland requires contractors to pay sales tax on all purchases of materials that will be incorporated into real property as part of a construction contract. However, Maryland allows contractors to […]

One Contractor, Two Bids, Three Different Sets of Sales Tax Rules

State sales tax rules vary significantly for construction contractors doing business in the DC region, and can substantially affect the final cost on a contract. For instance, a Virginia-based contractor bids on two separate construction contracts for a federal government agency. Both of the contracts are for the construction of a building, one contract will […]

501(c)(4)’s – The IRS Takes a New Look

The IRS provides an exemption under Section 501(c)(4) of the IRC for social welfare organizations that are nonprofit in nature and operate exclusively for the promotion of the common good and welfare of a community. The NAACP, AARP, Sierra Club are example of 501(c)(4) entities that are classified as organizations promoting social welfare for the […]

Government Appealing Clergy Housing Ruling

ECFA, an accreditation organization dedicated to Christian ministry stewardship, has been closely following the court case brought by the Freedom From Religion Foundation (FFRF) opposing the clergy housing exclusion for clergy providing their own residences. In November 2013, the district court ruled that the exclusion was unconstitutional as it lacked a secular purpose and effect. In […]

Online Donations OK By IRS

The IRS released an Information Letter on March 29, 2013 stating that there is no prohibition against a 501(c)(3) utilizing an internet fundraising platform to raise funds. Which is good because that’s been around for a few years. They did include some good suggestions. Be sure to consider any state laws and regulations that may […]