A Tax Primer for CPAs Volunteering at Nonprofit Organizations

Tax Adviser, March 2007

Posted: 3 Sep 2007

See all articles by Mark J. Cowan

Mark J. Cowan

Boise State University -Department of Accountancy

Denise English

Boise State University - Department of Accountancy

Abstract

Because of their expertise and standing in the community, CPAs are often asked to serve as board members or officers of local churches, charities and other small- to medium-sized nonprofit organizations. Many CPAs tapped for non-profit service have strong tax and business experience, yet may be unfamiliar with the tax rules governing nonprofit organizations. Understanding these tax rules is critical because the Federal government uses the Code to regulate nonprofit behavior. The nonprofit provisions of the Pension Protection Act of 2006, coupled with an already complex array of nonprofit rules, make it all the more important for CPAs to understand the Code's rules as they assume key roles in local nonprofit organizations. This Article highlights some of the important tax issues that a CPA officer/director of a local nonprofit may encounter, suggests questions he or she may want to research and provides examples of potentially problematic situations. Specifically, this Article provides an overview of the requirements to obtain and maintain federal tax exempt status, inurement, intermediate sanctions, private benefit, lobbying and political campaign restrictions, tax reporting requirements for nonprofits, and the unrelated business income tax.

Keywords: Tax-exempts, Nonprofits, Unrelated Business Income Tax

Suggested Citation

Cowan, Mark J. and English, Denise, A Tax Primer for CPAs Volunteering at Nonprofit Organizations. Tax Adviser, March 2007, Available at SSRN: https://ssrn.com/abstract=1009232

Mark J. Cowan (Contact Author)

Boise State University -Department of Accountancy ( email )

1910 University Drive
Boise, ID 83716
United States

HOME PAGE: http:///www.boisestate.edu/cobe-accountancy/department-of-accountancy/directory/mark_cowan/

Denise English

Boise State University - Department of Accountancy ( email )

United States

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