Working with your nonprofit to make our world a better place
I am an Oregon nonprofit lawyer and historian that has enjoyed serving nonprofit organizations since 1978. I provide a wide range of legal services as well as trainings and workshops on a variety of topics.
I invite you to explore the website to learn more about services I provide, get updates on current news impacting nonprofits in Oregon and access free form and policy templates.
Has the IRS Revoked Your Tax Exemption Without Your Knowledge? Last Chance to Correct This at a Reduced Rate
Several years ago the IRS began implementing a new law that provides that the IRS will revoke the tax exemption of organizations exempt under §501(c)(3), (c)(4) and other sections of 501(c) if the organization fails for three years to file the proper Form 990. Prior to the new law, small organizations that gross less than $25,000 per year in gross receipts did not have to file any tax form. Now the breakoff point is $50,000 (as long as you don’t have property worth more than $500,000) and these smaller organizations now have to file a new form, Form 990N. Form 990N is a simple one page form that can be found on the IRS website and can only be filed electronically. If your organization failed to file this form (or any other Form 990 or 990EZ return due from you), for three years, the IRS revoked your exemption.
In many nonprofits, at least one of the Board members is a check signer. Check signing is supposed to be one of an organization's internal controls to ensure that corporate funds are been properly paid out. Yet, in almost 100% of nonprofits, Board members are given no instructions about what they are supposed to do when they become a check signer. That included me when I was handed my first check to sign as a Board member. So, here it is!
In choosing which Board members will sign checks, remember that the check signer cannot sign checks to him or herself. The check signer should not be the person who reconciles the bank statement for the corporation.
When the Director or officer is presented a check, the check signer should review several items before signing the check—authorization, amount, name, date, and reasonableness. Feel free to copy this list and give it to your check signers. Put it on a wallet-size card, if you like.
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