Paycheck Protection for Non-Profits

Charitable Organizations May Apply for Forgivable Loans Under the CARES Act

Written by David Wheeler Newman and Jean Nogues

As part of the unprecedented $2 Trillion stimulus package (the CARES Act), charitable organizations exempt under Internal Revenue Code section 501(c)(3) with 500 or fewer employees may apply for loans under the Paycheck Protection Program (PPP) provision of the Act.

All loans to qualifying charities will have the same terms: Continue reading “Paycheck Protection for Non-Profits”

America CARES

Tax and Employee Benefits Provisions of the CARES Act Written by David Wheeler Newman The Coronavirus Aid, Relief, and Economic Security Act (the “Act”) contains numerous provisions, intended to stimulate the economy, which will impact tax liability and compliance for individuals and businesses. Some of the important provisions are highlighted below. There are many additional provisions in this legislation impacting taxpayers and the below summary … Continue reading America CARES

Tax Filing Reprieve

Tax Return Filing and Payment Extensions

Written by Jeffrey Davine

As a result of the Coronavirus crisis, Treasury Secretary Steven Mnuchin recently extended the deadline for payment of 2019 federal income taxes from April 15th to July 15th.  This extension, however, did not apply to the filing of 2019 tax returns.

Today, the Treasury Secretary announced that the filing deadline for 2019 tax returns would be extended to match the new payment deadline. Continue reading “Tax Filing Reprieve”

Federal Tax Payments May Be Delayed 90 Days

Written by David Wheeler Newman Treasury Secretary Steven Mnuchin announced that individual taxpayers may defer payment of tax bills up to $1 million for ninety days, interest and penalty free, as part of a coronavirus stimulus bill announced by the administration on March 17. According to the Secretary, the $1 million limit is intended to provide relief to small businesses and pass-through entities like partnerships … Continue reading Federal Tax Payments May Be Delayed 90 Days

IRS Penalties Assessed Against Your Client May Not Be Valid

Auditor Examining Documents With Magnifying Glass At Table
Photo Credit: istock.com/AndreyPopov

Written by Robin C. Gilden 

Internal Revenue Code section 6751(b) provides that no penalty shall be assessed under the Code unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination, or such higher level official as the Secretary of the Treasury may designate.  This section defines penalty as any addition to tax or any additional amount.  The requirement for prior written approval does not apply to penalties for failure to file a return or pay tax, or to penalties that are automatically calculated through electronic means, but does apply to negligence and substantial understatement penalties, as well as the “responsible party” penalty for failure to withhold or remit payroll taxes.

Continue reading “IRS Penalties Assessed Against Your Client May Not Be Valid”

Tax Act Simplifies the Private Foundation Excise Tax on Investment Income

Taxpayer's desk and excise documents to import and export industrial goods for the purpose of maximizing profits for large business organizations.
Photo Credit: istock.com/kanizphoto

Written by David Wheeler Newman

Tax legislation that was included in the massive spending bill signed by the President included provisions affecting the charitable sector.  We previously reported on one provision involving the reviled nonprofit parking tax and on another provision granting temporary tax benefits for donations targeting disaster relief.  Another provision will be good news for private foundations and their advisors.

Continue reading “Tax Act Simplifies the Private Foundation Excise Tax on Investment Income”

Tax Act Enhances Deductibility of Disaster Relief Donations for a Limited Time Only

Auction concept - judges gavel against us dollar background.
Photo Credit: istock.com/alfexe

Written by David Wheeler Newman

Tax legislation that was included in the massive spending bill signed by the President included provisions affecting the charitable sector.  We previously reported on one provision that will be welcomed across the sector.  Another provision will be good news for donors making charitable contributions for disaster relief.

The Taxpayer Certainty and Disaster Relief Tax Act signed into law on December 20 includes various tax provisions intended to mitigate a portion of the enormous financial cost of recent hurricanes, tornadoes, forest fires, earthquakes and other natural disasters.  Included was an enhanced tax benefit for donors making charitable contributions to organizations providing disaster relief.

Continue reading “Tax Act Enhances Deductibility of Disaster Relief Donations for a Limited Time Only”

Hasta la Vista to the Reviled Nonprofit Parking Tax

Empty parking lots, aerial view.
Photo Credit: istock.com/nonnie192

Written by David Wheeler Newman

Christmas came early for the nonprofit community when Congress repealed the hugely unpopular tax on parking and other transportation employee benefits.

The 2017 Tax Cuts and Jobs Act added a provision to the Internal Revenue Code that had no friends in the charitable sector: section 512(a)(7) made transportation fringe benefits including parking and public transit benefits, provided by nonprofit employers, subject to the unrelated business income tax (UBIT).  Not only did this provision defy logic by taxing expenses rather than income, it forced the filing of an income tax return (Form 990-T) upon thousands of nonprofits that before 2018 had only filed a Form 990 informational return, but not a 990-T, not to mention countless churches that don’t even need to file the Form 990.

Continue reading “Hasta la Vista to the Reviled Nonprofit Parking Tax”

Are you rEDDy for the Audit?

Incoming Financial Audit
Photo credit: iStock.com/ chaofann

By Jeffrey Davine

We regularly assist clients with worker classification audits that are conducted by both the Internal Revenue Service (the “IRS”) and the California Employment Development Department (the “EDD”).  It appears that these types of audits may be occurring with greater frequency than in the past. Waiting until after the IRS or the EDD comes calling to review the status of these workers is not a good option.

There are two categories of workers- employees and independent contractors.  From the perspective of a business, classifying a worker as an independent contractor is usually less expensive and entails fewer administrative burdens than classifying a worker as an employee.  This is because various tax obligations (such as withholding and remitting income and employment taxes) are triggered when a worker is classified as an employee.  In addition, if a worker is an employee he or she may be eligible for certain fringe benefits such as paid vacation, health insurance, and retirement plan participation.  Moreover, labor laws impose numerous obligations on a business when it hires an employee.  These tax and administrative requirements do not need to be satisfied when engaging an independent contractor.  Continue reading “Are you rEDDy for the Audit?”

Wealthy Californians (and their Children) Can Breathe a Sigh of Relief

Calculator with wooden house and coins stack and pen on wood table. Property investment and house mortgage financial concept
Photo credit: iStock.com/marchmeena29

By Joyce Feuille

Wealthy Californians, and more importantly, their children and grandchildren, can pop that champagne. The bill that would have imposed a California gift, estate, and generation skipping transfer tax appears to be dead – – at least for now. It will not get a floor vote in the California Legislature.  Absent a floor vote, the California bill will not obtain the required approval of the California Legislature to put it on the November 2020 ballot. Continue reading “Wealthy Californians (and their Children) Can Breathe a Sigh of Relief”