The tax laws keep changing and nonprofit entities must continue to adjust to new rules.
The charitable giving benefits from the CARES Act have expired as of December 31, 2021, and are not available for 2022. Expired Provisions include the $300 ($600 for married couples filing jointly) above the line cash charitable deduction and the 100% adjusted gross income limitation for gifts of cash to a public charity is now back to 60%
But the IRS attack on syndicated contribution easements continues. A brief sampling:
An important recent General Counsel Memorandum affects the deductibility of digital assets to charity. A charity’s treatment of volunteers can affect tax responsibilities. The IRS Exempt Organizations and Government Entities Division has published three new Technical Guides (TG). (These guides are comprehensive, issue-specific documents. TGs update and combine the IRS.gov Audit Technique Guides (ATG) with other technical content. Once completed, the TGs replace corresponding ATGs.) Contemporaneous written acknowledgements and whether a conservation easement is perpetual continue to be issues creating tax controversies.
This year’s Annual Not-for-Profit Update will include a tax update and review of key issues in completing IRS Form 990, and related Schedules. It is more important than ever for non-profits to understand and complete this annual tax form to ensure that the organization and its donors are also protected so they can accomplish their corporate intentions and goals.
On the accounting standards front, some nonprofits will still be implementing the FASB’s new Leases standard (Accounting Standards Codification [ASC] Topic 842), while others will have moved on to implementing the last of the FASB’s recent wave of major standards, the somewhat less far-reaching (for most nonprofits) standard on Credit Losses (ASC Topic 326).
Meanwhile, the FASB itself is working on its next generation of projects, informed by a public agenda consultation in 2021. Although many of these projects are focused on business enterprises and the needs of their investors, there are several projects that have or could have significant applicability to some or many nonprofits. Such projects include ones on Crypto Assets and on Software Development Costs, and on two specifics Environmental, Social, and Governance (ESG) issues with potential financial statement impact, Financial Instruments with ESG-linked Features and Environmental Credit Programs.
This year’s FASB Update will include helpful implementation reminders for Leases and Credit Losses, and discussion of important follow-on guidance regarding Leases between Entities under Common Control (to be issued in March 2023). The Update will also provide background information and a summary of efforts to-date on the afore-mentioned projects now underway that could affect nonprofit financial reporting in future years.
Auditing Update - a review of Statements on Auditing Standards 142 (Audit Evidence), 143 (Accounting Estimates), 144 (Amendments to AU-C 501, 540 and 620); 145 (Understanding the Entity and Assessing Risk), 146 (Quality Management),148 (Amendments to AU-C 935), that will impact audits conducted in 2023 and beyond, with emphasis on practical application to NFP organizations. This session will also discuss the Statements on Quality Management Standards and their impact on smaller firms.
Ethics Update – Our course will provide a review of recently enacted Ethics Interpretations, including NOLAR, Unpaid Fees, Accounting Standards Implementation, Loans, Information system services, Officer and directors, and Compliance Audits, as well as consideration of exposure drafts currently outstanding. Qualifies as one hour of ethics CPE.
This program will also provide an overview of other recent standards issued and projects in progress that impact Not-for-Profit entities.