ABHE 2017 How to Avoid the Worst Tax Mistakes. Dave Moja, Partner

Transcription

1 ABHE 2017 How to Avoid the Worst Tax Mistakes Dave Moja, Partner

2 IRS Form 990 Top Errors 1. Return submitted with either missing or incorrect EIN. To avoid this error, filers should ensure the EIN submitted belongs to the organization and is correctly entered when submitting the return. 2. Name entered when filing the return. The filer needs to use the name as shown on IRS Master File records or if a name change occurred, check name change box and attach any required documentation. 3. Tax Period does not agree with the month on the Entity Index File and the filer is not submitting a short period return or a final return. Error could be reduced if filer ensured they were filing for the tax period on Master File/clearly indicates they are changing their tax period.

3 IRS Form 990 Top Errors 4. Missing Schedule O. Schedule O is required for all 990 filers. Filers are confused by Line 38 and assume they have the option not to include, since Line 38 is a yes/no checkbox. Future programming is set to remove this line to avoid confusion. All 990 filers should include a Schedule O. 5. Checking the final return box in error. Many filers check the final box in error. This box should only be checked when the organization has terminated, closed or ceased to exist. Checking this box closes the organization s tax-exempt status and filing requirements causing problems for the filers when they attempt to file future returns.

4 IRS Form 990 Top Errors 6. Missing Schedule A. The filer is required to file a Schedule A in certain circumstances. If it is missing we will correspond for the missing schedule. The filer needs to be sure to include Schedule A when required. 7. Math error when totaling the Functional Expenses (Part IX Line 25, Column A). Addition of lines 1 24e should be verified to ensure the total amount is accurate. 8. Math error when totaling Net Assets End of Year (Part X, line 33, Column B). Calculation of lines 1-32 should be checked to ensure total amount is accurate.

5 IRS Form 990 Top Errors 9. Math error when totaling Net Assets Beginning of Year (Part X, line 33, Column A). Calculation of lines 1-32 should be checked to ensure total amount is accurate. 10. Math error when totaling Revenue. Calculation of lines for total revenue (Part VIII, Lines 1a 11e) should be checked to ensure total revenue amount is accurate.

6 Tax Dept. in a Box Federal Tax Compliance Form 990 Form 5578 Employment Tax Filings Form W-2 and 1099-MISC Form 941 (quarterly) International Filings Form 1042-S Schedule F?

7 Tax Dept. in a Box ACA Compliance Are You an ALE? Form 1095 Series Penalty Notices Unrelated Business Tax Analysis Alternative Investments Form 990-T State filings

8 Tax Dept. in a Box State & Local Property Taxes? Sales Taxes? Other Business Taxes? (WA, GA) Charitable Solicitation Registrations Student Reporting FSA Form 1098-T

9 Tax Dept. in a Box Deferred Maintenance Construction Contracts Tax-exempt Bonds? (Private Business Use) Revenue Enhancement Opportunities Gift Acceptance Issues Investment Issues Exempt Status Issues The Future?

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20 Phase I Aim: Final ASU by mid-2016, effective for calendar year 2018 (fiscal year ) Net Asset Classes: Classif ication scheme Disclosure of board designated net assets Underwater endowments Expirations of capital restrictions Expenses/Investment Return: Expenses by nature; analysis of expenses by function and nature Netting of investment expenses against investment return Disclosure of netted investment expenses Enhanced disclosures about cost allocations Phase II Operating Measures all other elements of the proposal, including: Whether to require intermediate measure(s) Whether and how to def ine such measure(s), and what items should or should not be included in the measure(s) Alternativ e disaggregation approaches suggested by stakeholders Statement of Cash Flows: Realignment of certain items Operating Measures: Modest improv ements to disclosures for those that use an operating measure, especially about board appropriations, designations, and similar transfers Liquidity/Availability: Quantitativ e disclosures about availability Qualitativ e disclosures about liquidity Consideration of alternatives suggested by stakeholders (e.g., classified balance sheet) Statement of Cash Flows: Methods of presenting operating cash flows (direct/indirect)

21 Expense Reporting Report expenses, either on the face of financial statements or in the notes, by: Function* Natural classification Analysis (disaggregate function by nature)** * Currently required in GAAP ** Choice of location; Board may explore segment reporting instead for HC in Phase 2

22 Expense Reporting (cont d.) NFPs required to provide qualitative disclosures about methods used to allocate costs among program and support functions ASU also provides enhanced guidance on allocations from M&G expenses Key concept: direct conduct or direct supervision

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25 The Five We Don ts We DON T Act as thought leaders Talk to the Development Department Provide campus-wide financial leadership Have the time to handle the daunting things Stop to consider God s vision for our institution

26 Revenue Enhancement Opportunities I Samuel 17 Institutional uniquenesses Individual uniquenesses Brainstorming Black Red Green Blue Just-Add-Water Plan (JAW) Big, Audacious Plan (BAP)

27 Thank you. Dave Moja, Partner CapinCrouse LLP