IRA Rollover Giving – IS Your Org Eligible?

Image result for what type of organization tax exempt

Should be an easy question.  Except that it isn’t always so clear.

With IRA giving (donors age 70.5+) becoming particularly important in light of the new tax law, your nonprofit may want to read this post carefully.

  1. Private Foundations and Supporting Organizations are NOT eligible to receive qualified IRA rollover gifts.
  2. A Supporting Organization (SO) is one which was founded and received its exemption under IRS Code Section 509(a)(3) (there are 3 types of SOs – all are not eligible – not relevant to this post).

Last week, a question came via a client.  It was a religious entity upset that they are a SO – what can they do about accepting IRA rollover gifts?

Answer:  find out if your organization is definitely an SO or not!  Someone may have thought you are one and checked off that box on the 990 or some other form (when, in fact, the org is something else).

First, look at your 990 return – your accountant may have checked off the box saying that you are an SO!  DON’T ASSUME THAT IS ACTUALLY THE CASE.

Next, call the IRA tax exempt hotline (pretty short waits) – and ask them what they have you as.  AGAIN, DON’T ASSUME THEY ARE CORRECT EITHER.

Next, look at your incorporation documents and preferably a copy of your original IRS form 1023 application for exemption – what do they say?

Incorporation docs and your 1023 rule over anything else (call me if you have a discrepancy between the incorporation docs and your 1023!).

Many times accountants who file the 990s make mistakes and the IRS doesn’t question them.  Your organization can go on for years filing under as the wrong type of organization.  All the IRS cares about for 990s is that they are filed – not whether they are particularly accurate – as long as the numbers are generally sound.

I am sure there are thousands of nonprofit public charities which are in fact SOs!!  If  your organization is some sort of subsidiary, controlled by a parent charity (as long as the parent controls the board membership), you might be an SO.  SOs were an easy route to gain exemption status by “pigging-backing” on the parent’s exemption (and maintaining control of the subsidiary).

It doesn’t matter if your organization no longer resembles an SO.  Until you amend your articles of incorporation and refile your 1023, your org is what it started out as.

Of course, there may be many orgs which think they are SOs – because of an error on the 990s or other mistaken approaches – but are really NOT.

Go back to the beginning.  You might be surprised. I had the IRS telling me definitively that a client was an SO.  But, I kept digging (no one had the 1023 or articles of incorporation) and eventually figured out that the so-called parent church’s attorney thought they were an SO and told the IRS on one of their forms.  They lost their exemption retroactively for not filing 990s (they were actually a religious org that wasn’t required to file 990s).  In the IRS’s system – they were switched to an SO and that was it.

Eventually, they got it reversed but some damage was done.

CLICK HERE TO LEARN MORE ABOUT OUR LATEST WEBINAR TRAINING PROGRAM

 

Sorry – You may have missed our Donor-Friendly Webinar on the New Tax Law BUT you can register to receive the recording

On Jan. 22, we gave a Donor-Friendly Webinar Briefing on the New Tax Law (goal being that you can use the content for your own donor-friendly briefings and/or invite leadership to join the webinar).  This was the predominant request from among our 250 attendees to our initial briefing on the new tax law from last week (see below for comments on that session). 

CLICK HERE TO PURCHASE THE RECORDING OF OUR DONOR-FRIENDLY BRIEFING ON THE NEW TAX LAW

In addition to receiving the actual PowerPoint and the recording link, you will also receive draft donor-friendly pamphlet language – included with your registration. 

Here is our first comment:

After sitting in your Tax Bill Seminar, I knew today’s seminar was something I needed.  Unfortunately, I joined in late and didn’t download the presentation.  Can the presentation be emailed to me?  And, I’m definitely looking forward to the information coming out in “donor” language in the next couple of weeks.  Really appreciate your explanations and not the typical “sky is falling” hype we’ve been getting.

Thank you as always for considering our programs.

Our Tax Briefing on Monday (1/8/18) was also a huge success – over 250 attendees logged-in to hear key points for nonprofit fundraisers on the new tax law!  CLICK HERE IF YOU WANT TO PURCHASE THE RECORDING

Sampling of comments we received after Jan. 8 Tax Law Briefing for Nonprofit Fundraisers:

“Thanks for the webinar today. Any chance you’d be interested in holding a seminar for donors about how the new tax bill might affect their charitable giving.”

“Thanks for your excellent presentation!”

“Thank you for the presentation last week.”

“Nice job on the presentation today.”

“Thoroughly enjoyed and was educated by your webinar today.”

“Thank you so much for an informative session this morning!”

“Thanks so much for the webinar presentation today regarding the 2018 Tax Law changes — I found it to be very helpful.”

“Thoroughly enjoyed the presentation this morning and got a number of questions answered, plus good direction for the future with the 70 1/2s and their IRAs. Thanks!”

Last Call for Monday’s Donor-Friendly Webinar on New Tax Law

This Monday – Jan. 22 – at 12 pm EST, we are offering a Donor-Friendly Webinar Briefing on the New Tax Law (goal being that you can use the content for your own donor-friendly briefings and/or invite leadership to join the webinar).  This was the predominant request from among our 250 attendees to our initial briefing on the new tax law from last week (see below for comments on that session). 

CLICK HERE TO LEARN MORE OR REGISTER FOR OUR DONOR-FRIENDLY BRIEFING ON THE NEW TAX LAW

In addition to receiving the actual PowerPoint and the recording link, you will also receive draft donor-friendly pamphlet language – included with your registration. 

Thank you as always for considering our programs.

Our Tax Briefing on Monday (1/8/18) was a huge success – over 250 attendees logged-in to hear key points for nonprofit fundraisers on the new tax law!  CLICK HERE IF YOU WANT TO PURCHASE THE RECORDING

Sampling of comments we received after Jan. 8 Tax Law Briefing for Nonprofit Fundraisers:

“Thanks for the webinar today. Any chance you’d be interested in holding a seminar for donors about how the new tax bill might affect their charitable giving.”

“Thanks for your excellent presentation!”

“Thank you for the presentation last week.”

“Nice job on the presentation today.”

“Thoroughly enjoyed and was educated by your webinar today.”

“Thank you so much for an informative session this morning!”

“Thanks so much for the webinar presentation today regarding the 2018 Tax Law changes — I found it to be very helpful.”

“Thoroughly enjoyed the presentation this morning and got a number of questions answered, plus good direction for the future with the 70 1/2s and their IRAs. Thanks!”