Earlier this month, IRS Tax Exempt and Government Entities Division (TE/GE) Director of Rulings and Agreements Robert Choi discussed some of the big tax changes facing nonprofit organizations in the year ahead.

Filing Threshold for Form 990-EZ
In addition to changes to the form itself, eligibility requirements for the Form 990-EZ will change for 2009 tax year filings. If your organization’s assets total less than $1.25 million and gross receipts total less than $500,000, your organization is eligible to file the Form 990-EZ.
Click here for our previous post on this topic.

Possible Tax-Exempt Status Revocation
The end of tax year 2009 will also find some organizations facing a possible tax-exempt status revocation. If an organization has not filed Form 990-N for three consecutive years (each year since 2007), it will automatically lose its tax-exempt status on the due date of the third year. The Form 990-N is required to be filed electronically, via the IRS Web site, by tax-exempt organizations whose gross receipts are normally $25,000 or less.
Click here for our previous post on this topic.

Increased International Focus
The IRS plans to publish more specific guidelines for organizations conducting activities abroad. Charitable organizations operating around the world will face greater scrutiny regarding their international accounts and transactions. The IRS will focus on finding funds diverted for noncharitable purposes and used for operations beyond the core mission of the organization.

Governance Check Sheet
The IRS has developed a governance check sheet to be utilized by agents during IRS examinations. The data will be used by the IRS to study the relationship between governance practices and tax compliance.
Click here for a pdf of the Check Sheet.

College and University Study
Mr. Choi also announced that colleges and universities can expect an interim report for the ongoing college and university study, noting data on unrelated business income, endowments and executive compensation.

Employment Tax Examinations
The Exempt Organization Division will participate in the IRS’s National Research Project (NRP). The NRP will examine employment tax returns filed by not-for-profits, looking at worker classification, fringe benefits, executive compensation and expense reimbursement data.
Click here for our previous post on this topic.

To learn more about how these changes may impact your organization, please contact your CB&H not-for-profit tax professional.

Related posts:

1. IRS Updates Compliance Guidance for Tax-Exempt Organizations, Disaster Relief Providers and Public Charities
2. Is Your NFP in Danger of Losing Tax-Exempt Status?
3. Form 990, Schedule K – Don’t Procrastinate About Tax-Exempt Bonds