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I am pleased with the service and patience we have received. Thanks to your service, we have greater confidence in our financial position. Professional... helpful... cooperative... and accommodating to our church's needs are characteristics that describe our experience with Patrick and Raines. They add credibility, while simplifying our church's financial management. I eagerly recommend them. Thanks again for your help. It's getting better and better.

Dr. Randy T. Hodges, Senior Pastor
Hernando Church of the Nazarene

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Are You Properly Documenting Unrelated Business Income?

Earlier this year the IRS released its report on tax-exempt colleges and universities, documenting cases of unreported or underreported unrelated business income. The findings should be noted by most nonprofits.

According to the report, 90% of the colleges and universities studied showed increases in unrelated business taxable income. Reporting on unrelated business income has been an IRS concern for years, and it can affect all types of nonprofits.

GuideStar, a nonprofit organization dedicated to providing users with more information on charities and encouraging donations, recently published an article urging all nonprofits to review the report.

Although it focuses on institutions of higher education, the IRS findings have implications for all nonprofit organizations. The GuideStar article lists three important guidelines for nonprofits:

  1. Think about how your nonprofit currently reports its activities, noting which activities are related to your tax-exempt purpose and which aren’t.
  2. Make sure the allocation of expenses to these programs is reasonable and correctly documented.
  3. Beware of activities that show a loss year after year; do they meet the IRS definition of trade or business?

For more information, read the full GuideStar article here.

Online Stewardship provides accounting and consulting services to help grow your organization and ensure you’re in compliance with IRS regulations. Let us know if we can help: Lynn@onlinestewardship.com or 904-398-4747.

 

 

 

July 2, 2013

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