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Donors Forum is tracking the following
government issues and legislation that affect the philanthropic
and nonprofit sector.
Federal
State
Panel on the Nonprofit
Sector Releases National Principles and Best Practices
In October 2007, the Panel on the Nonprofit Sector released
its Principles for Good Governance and Ethical Practice:
A Guide for Charities and Foundations. The Panel,
convened by INDEPENDENT SECTOR following encouragement
from the Senate Finance Committee, draws on the knowledge
of 24 nonprofit and philanthropic leaders. The guide
outlines 33 practices designed to support board members
and staff leaders of every charitable organization as
they work to improve their own operation. It is available
to the public on the Nonprofit
Panel's website.
Updated 8/08.
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Compliance Guides
Published by IRS
The Internal Revenue Service has issued guides to assist
tax exempt organizations and contributors to nonprofits,
in complying with the law. IRS Publication 4220 details
the application process for 501(c)(3) status as well
as organizational disclosure and recordkeeping requirements.
Publication 4221-PC serves as a compliance guide for
nonprofits to safeguard their tax-exempt status and
Publication 4221-PF covers information pertinent to
private foundations to also protect their exempt status
and remain compliant with IRS regulation. (Source: Independent
Sector)
Updated 8/08.
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IRS Compensation
Checklist
The IRS has published a 16-point checklist to help organizations
establish appropriate compensation for executives and
board members who are considered "disqualified
persons" under the tax code. The Rebuttable Presumption
Checklist aims to help organizations avoid penalties
for excessive payments. The checklist allows nonprofit
officials to compare pay and benefits provided to leaders
with levels at similar organizations. While the Checklist
focuses on larger organizations, the charitable community
as a whole can utilize the document to become familiar
with IRS compensation regulation and safeguard themselves
from a possible audit.
Updated 8/08.
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The New Form 990
The IRS has redesigned its Form 990 for tax-exempt organizations
for the first time since 1979. The re-designed version
of the Form 990, Return of Organizations Exempt from
Income Tax, proposes significant changes to the ways
in which public charities and other exempt organizations
will report information on finances, fundraising activities,
governance, executive and board compensation, and program
services. The IRS has stated that it anticipates using
the new form for the 2008 tax year (returns filed in
2009). Smaller nonprofits with gross receipts of $25,000
and less that were not previously required to file returns
are required to file a new Form 990-N electronically
starting in 2008. Draft instructions for the new form
have been released and comments of the form submitted
by the public are currently under review.
Posted 8/08.
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President's FY08 Budget Includes Charitable Rollover
and Change to Private Foundation Excise Tax
President Bush's FY08 budget proposal
includes a permanent extension of the IRA charitable
rollover and the simplification of the private foundation
excise tax. The IRA Charitable rollover provision would
permanently allow taxpayers age 70 ½ and older
to make tax free distributions of up to $100,000 from
their individual retirement accounts (IRAs) to charitable
organizations. Gifts to donor-advised funds, supporting
organizations and private foundations would not qualify
for the incentive. The excise tax proposal would simplify
the current two-tier structure of the tax on private
foundation investment earnings by changing it to a single
rate of one percent. For more information, see pages
28-40 of the Treasury
Department's Blue Book. Donors
Forum supports
legislation that would allow individuals
to make contributions of IRA assets to charitable organizations
without tax penalty and legislation to lower or eliminate
the excise tax on private foundation investment income.
Updated 8/08.
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Private
Foundations and the Pension Protection Act
The Pension Protection
Act of 2006 contains a number of provisions that have
an impact on private foundations and other nonprofits.
In particular, the new Act requires private foundations
to exercise expenditure responsibility when making grants
to certain types of supporting organizations. Vague
language in the Act has prompted the IRS to work towards
eliminating confusion in the charitable community by
issuing determination guide sheets.
The guide sheets include checklists
inquiring into organizational, operational, control,
and relationship requirements for Type I, II, and II
supporting organizations. Accurate classification of
supporting organization type ensures regulatory compliance
with the IRS and better access to private foundation
funds. To
access and review the guide sheets, please click here.
Updated
8/08.
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Advocates Guide to the State Budget
Illinois spends billions in taxpayer dollars each year.
Read the Advocates Guide to the Illinois State Budget,
a resource from Donors Forum, to learn how your organization
can have a voice in the budget debate and get its fair
share in Springfield. The guide includes a fold-out poster
of the state budget process, a description of the budge,t
and advocacy tips on how to effectively influence the
process.
To obtain a paper copy, visit our Library.
Contact us at (312) 578-0175 or info@donorsforum.org
to have a copy mailed to you.
Download a PDF copy here (please
note that file sizes are large and may take some time
to download).
Updated 8/08.
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