The proposed tax legislation is still far from law, but the not for profit community may be negatively impacted by the current proposals. Simply put, many taxpayers who currently itemize, may take the standard deduction under the proposed legislation thereby reducing the benefit of making a charitable contribution.
Imagine this – a husband and wife own a sales company and they purchase two passenger automobiles to be used in the course of business. The automobiles are available for personal use, but the husband and wife claim that they are primarily used to transport and entertain clients that are in town. While this fact pattern points to a valid business deduction for the automobiles, the IRS disagreed. This was part of a larger case that went to US Tax Court (Brent Mcminn and Lynette Mcminn v. Commissioner), which disallowed the deduction on the grounds that the automobiles were listed property and business use could not be substantiated.
1099s are often viewed as hassle, with the taxpayer loathing to receive them and the business loathing to send them out. However, the IRS does like 1099s and is making more of a concentrated effort to keep track of the process. According to Investopedia, in 2015 the IRS “sent 3.7 million CPA2000 notices to taxpayers saying that, based on those matches they owed more money.” This essentially means the income and/or payment information the IRS has on file does not match the information reported on your tax return, and due to this more money is owed. The IRS is paying attention.
The role of CFO in not-for-profit organizations (NFPs) is evolving and becoming increasingly complex. Especially in smaller NFPs, the CFO is now expected to assume key managerial responsibilities (in addition to traditional fiscal ones), and to thoroughly understand issues of strategic planning, compliance, communications, governance and information technology (IT), among others.
The Credit for Increasing Research Activities, also known as the Research & Experimentation (R&E) tax credit, is one of the most prominent federal tax credits available to businesses.The purpose of the Credit for Increasing Research Activities is to invest in research that leads to new ideas, discoveries, and knowledge that will help to support a growing economy. In particular, the purpose of the R&E tax credit is to increase investment in research and experimentation activities. In my opinion, it is one of the most valuable federal tax credits that can be obtained. It has been claimed by a significant number of companies, ranging from small software startups, to multinational pharmaceutical firms, and many in between.
The R&E credit was initially introduced in 1981, and temporarily extended 16 times before becoming permanent under the Protecting Americans from Tax Hikes (“PATH”) act of 2015