Most exempt organizations undertake fundraising sales and events, but GAAP reporting of the underlying transactions and results is at odds with the Form 990’s demands! Preparers need know both how these activities are defined for Form 990 purposes, and the extent to which their underlying components need be isolated and disclosed to meet the form’s financial reporting parts (including inputting results on both Schedules G and M). It is not uncommon for preparers to incorrectly report upon these revenue items, failing to detail their distinct revenue streams, direct expenses, and associated solicitation expenses. The practical experience of the author/instructor and her examples create a framework for preparers to see how the 990 requires appropriate disclosures in the context of silent auctions, annual dinner/dances, and sales campaigns.
Definition of “fundraising events and sales” and distinguishing operations that are outside of such characterization. Address of what constitutes a true gift or contribution when same is paid on top of a purchase of services or goods. Specifics of Form 990 inputs to be made on Part VIII Lines 1c and 8a (and noting companion Schedule G reporting) and noting insufficiency of GAAP reporting. Handling PPP loan forgiveness as a revenue stream. Inputting data in order to bifurcate an event’s participant or purchaser’s payment to “gift/contribution” versus fundraising event or sale revenue streams. What constitutes a “solicitation” expense that need be reported on Part IX, and thus cannot be characterized as a direct expense of a fundraising event or sale. Practical tips for handling revenues from silent auctions and guidance on auction of “rights to use” another’s properties or services. Communicating with filers’ managers as to the advance work they can perform to shortcut 990 documentation needs in this arena. Ramifications and results of 990 Part VIII reporting on each of the two “public support tests.”
Some knowledge of how the Form 990 is structured.
Public accounting tax and audit staff. Nonprofit organization’s treasurers, CFOs and other finance/compliance advisors.
Recognize the correct tax (Form 990) reporting of fundraising revenue via sales or events by both their separate character and timeframe. Distinguish between donations for fundraising events or sales (for example, silent auction items, prizes to be awarded at the event, or goods that will be sold) and donations from event participants. Apply the unyielding 990 definition of “noncash contribution” and associated data capture needs for Part VIII reporting as well as amplification on Schedules G and M. Identify when disbursement of pre-fundraising event or pre-sales goods (or other-acquired noncash contributions) constitute a direct expense of fundraising events or sales. Determine what qualifies as fundraising events/sales direct expenses for Form 990 Part VIII Line 8 disclosure versus a solicitation expense that is to be reported upon Part IX .
Eve Borenstein, Eve Rose Borenstein LLC
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