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Treasury Department and IRS Asked to Postpone New Taxes on Nonprofits

Nonprofits are asking for a delay concerning two provisions of the Tax Cuts and Jobs Act enacted earlier this year. The provisions, one relating to business income and the other on expenses incurred for employee transportation and parking, have caused confusion for several tax-exempt organizations since their applicability is uncertain without additional guidance from the Treasury Department and the Internal Revenue Service. Impacted organizations and nonprofit advocates have also submitted to both agencies extensive comments and requests for a delay in the taxes being implemented. More about the requested delay is available in the National Council of Nonprofits’ latest newsletter.

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Data Collection Form Revisions Proposed

In a Federal Register notice issued on April 3, the Federal Audit Clearinghouse (“FAC”) is proposing amendments to the Data Collection Form (“DCF”). Titled Proposed Information Collection; Comment Request; Data Collection Form for Reporting on Audits of States, Local Governments, Indian Tribes, Institutions of Higher Education, and Non-Profit Organizations , the notice outlines four significant changes to the Data Collection. The final Form changes would be effective for fiscal periods ending in 2019, 2020 and 2021. Those proposed changes include: Expanding the audit finding information that auditors include in the DCF to contain the audit finding’s actual text; Asking auditors to state whether they sent a written communication to the auditee concerning any non-audit finding issues should be directed to those responsible for governance matters;. Read More.

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AICPA Releases 2018 Not-for-Profit Entity Guide

This year’s edition of the Audit and Accounting Guides (“AAG”) Not-for-Profit Entities is now available. Issued last month by the American Institute of Certified Public Accountants, the 2018 guide features information about Accounting Standards Update No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. The Not-for-Profit, AAG also highlights the amended guidance and compares the changes to previous guidance.

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Art and Real Estate Clash in Federal Court

When a real estate developer decided to replace 5Pointz in New York City with condominiums, 21 artists filed a lawsuit claiming that demolishing the popular mural space without notice violated the Visual Artists Rights Act. The landmark trial in U.S. District Court in Brooklyn would determine whether graffiti receives federal protection. After three weeks of hearing arguments from both sides, the judge ruled in favor of the artists and awarded them over $6.7 million in damages for their art being destroyed. The ruling is viewed as a precedent for protecting street art. More on this case is available on the Nonprofit Quarterly website.  

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Churches Now Eligible for FEMA Grants

Congress’ latest budget bill offers permanent eligibility for churches that apply for grants from the Federal Emergency Management Agency’s (“FEMA”) Public Assistance Program. The Bipartisan Budget Act amends the Robert T. Stafford Disaster Relief and Emergency Assistance Act, which sets eligibility requirements for FEMA grants to repair structures intended for nonprofit community centers. The amendment includes a change to the definition of a private nonprofit facility that no longer excludes houses of worship. More on FEMA grants is available on the Nonprofit Quarterly website.

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FASB Q&A Issued for Staff Accounting Bulletin on Tax Reform

The Financial Accounting Standards Board (“FASB”) has published a Staff Q&A regarding whether private entities and nonprofits can apply Staff Accounting Bulletin (“SAB”) No. 118 (Topic 5.EE, Income Tax Accounting Implications of the Tax Cuts and Jobs Act). In its Staff Q&A, the FASB says it does not oppose private entities and nonprofits applying the Securities and Exchange Commission’s interpretive guidance for tax reform . The document also notes that such companies and organizations that employ SAB No. 118 would comply with GAAP. SAB No. 118 was issued in response to the Tax Cuts and Jobs Act. The guidance allows an entity, in certain situations, to include in its financial statements. Read More.

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