Archive for May, 2011

Political Activity – Can You Participate?

Tuesday, May 31st, 2011

A 501(c)(3) organization is absolutely prohibited from participating in any political campaign at all levels, national, state and local.  Political intervention includes candidate endorsements, contributions to political campaign funds, public statements of support or opposition to candidates, distributing information/pamphlets, etc. made by others in support or opposition to candidates and any other similar activities that is in support or opposition of candidates.

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IRS To Exam Trade Associations And Labor Organizations In 2011

Tuesday, May 31st, 2011

In its FY 2011 work plan, the Exempt Organizations Division of the IRS announced that they are increasing their focus on Section 501 (c) (4), (5) and (6) organizations.  In their FY 2011 Annual Report and Workplan, the IRS stated that “with the additional information available on the new Form 990, we will look at issues including political activity, inurement and the extent of compliance with the requirements for tax exemption by organizations that self-identified themselves as a Section 501 (c) (4), (5), or (6) organization”.

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Inurement – Is That Really a Word?

Tuesday, May 31st, 2011

Although it is doubtful the word “inurement” is used in normal conversations, the IRS has a particular fondness for its use and is one of the areas they plan to examine in their 2011 audit work plan.  However, even the IRS seems to have difficulty formulating an exact definition of the term, stating that, “Inurement is likely to arise where the financial benefit represents a transfer of the organization’s financial resources to an individual solely by virtue of the individual’s relationship with the organization, and without regard to accomplishing exempt purposes”.
The term appears to be used most frequently when the IRS is discussing organizations exempt under 501(c) (6) which code section states “no part of the net earnings” of an organization may “inure to the benefit of any private shareholder or individual”.  However, the term applies to a number of exempt organizations including 501 (c) (3), (4) and (5) organizations.

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Company Loses Payroll Tax Money

Tuesday, May 31st, 2011

Omni Land Settlement Corporation said about $200,000 it paid in payroll taxes is missing after the payroll company it entrusted the money to declared bankruptcy on May 6.

Note: We generally only recommend the  use of the national companies, ADP or Paychex, if you are going to have the payroll taxes “impounded” and remitted by the payroll company on your behalf.  While there is no guaranty of the same with them, these are large national companies subject to much more governance, oversight, and scrutiny. These companies are service providers only.  Ultimately, the responsibility for remittance of the taxes to the government remains with the employer. You are able to verify payroll tax deposits with the government.  We would recommend doing this at least periodically as a safeguard. Should you receive any correspondence from the government about unpaid payroll taxes, act immediately.  As always, you can contact us with any questions.

Read More » [WBALTV]