This session comprises one of Form 990’s most difficulty arenas: public support tests. The two public support tests have been utilized since the finalization of Regulations to the 1969 statutory changes that subdivided the 501(c)(3) world into “private foundations” and “public charities.” The tests’ application remains murky to most preparers (even though they have been in existence, virtually unchanged, for decades). This session has two key goals: first, ensuring that participants understand the design, reach, and purpose of each test; and second, making practitioners conversant (with the materials as back-up) h of each test’s line-by-line inputs. While it is impossible “to have fun” with these tests, participants will walk away knowing where pressure points exist and how those vary depending on an organization’s specific successes or gaps in achieving diversity of so-called “public support.” What is possible and achievable from this session is that these tests can be mastered!
Intro to the two public support tests (PSTs), including the various common misconceptions about each test’s application. Review of each test, focusing first on the relative ease of PST #1 (that calculated on Schedule A, Part II) which employs a bifurcated test. Thereafter, emphasizing the demands and challenges of PST #2 (calculated on Schedule A, Part III) with its restrictive parameters and dual tests each of which must be passed to be “in”. Practical tips translating revenue presentation from the Core Form 990 at Part VIII to the line inputs for both PSTs via Schedule A’s Parts II and III. Discussion of how to assist organizations who are in danger of flunking one or both PSTs. Analyzing anomalies: explanation of both what comprises an unusual grant and when a filer’s PST 1 “facts and circumstances test” argument ages out.
Prior preparation experience or CPE training relating to the demands of either public support test.
Public accounting tax and audit staff, nonprofit organization treasurers, CFOs, and finance advisors.
Identify the specific revenue streams that inform the first public support test’s numerator and denominator as well as the limit on certain “non-public” donors’ dollars applicable to this test. Appreciate the relative ease of this PST #1’s percentage calculation, and the flexibility by which qualification applies either automatically or alternatively via facts and circumstances. Identify the additional revenue stream factored into the second public support test’s numerator and denominator; as well as the complex limitations that apply when calculating PST #2 numerator. Recognize that the second public support test should only be used for filers who cannot pass via the first test (for this purpose only). The objective is to understand how the second public support test’s limitations and disparate donor categories, as well as its added percentage test, effectively limit this test’s utility as well as add to its complexity.
Eve Borenstein is a partner in Borenstein and McVeigh Law Office (BAM!), a Minnesota law firm that is the base of Eve’s national tax practice and services nonprofits and tax-exempt organizations exclusively.
Separate from the law firm, Eve operates a teaching and speaking consultancy offering instruction on nonprofit and exempt organization mandates, Eve Rose Borenstein, LLC.
Eve received her law degree from the University of Minnesota in 1985 and thereafter embarked on exempt organizations tax work at a “Big 8” accounting firm. From 1989-2003 she maintained a solo practice serving tax-exempt non-profit corporations, and in 2004 created the BAM Law firm with nonprofit corporate counsel Ellen W. McVeigh. From her law firm’s practice and through her teaching and speaking, Eve works to assist diverse nonprofit organizations with tax-exemption qualification, corporate planning and compliance. The bulk of her legal practice is representing exempt organizations before the Internal Revenue Service and/or State regulators on audit, qualification and classification issues; through 2009 she had represented more than 850 organizations before the IRS.
Eve volunteers extensively with multiple professional committees, including the American Bar Association’s Tax Section Committee on Exempt Organizations, from which she serves as a liaison to the American Institute of Certified Public Accountants’ Exempt Organization Technical Resource Panel. Through such service, and individually, Eve was integrally involved in the IRS’ Redesign of the Form 990. She was chosen by the IRS to be one of two private practitioners on the IRS Tax Talk Today TV broadcast in November 2008 dedicated to the Redesign of the Form 990, and has appeared multiple times since with IRS officials on educational panels concerning that Form.
Eve was also one of the original non-IRS collaborators in the Form 1023 Revision Project that culminated in that Form’s October 2004 “make over”. She enjoys teaching and speaking and is committed to “helping the sector (and its advisors) do it right the first time!”
Non-Member Price $109.00
Member Price $89.00