Nonprofits

Religious Groups Think New Tax On Churches Is Blasphemous

Religious groups are starting to catch wind of a new tax quietly imposed by Republicans on churches and synagogues—and they are pissed. Yes, you read that correctly: a new tax imposed on churches. Politico reports: [Republicans’] recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent […]

nonprofit controller

If You Want to Be a Nonprofit Controller, Be Prepared to Wear Lots of Hats

As controller and corporate compliance officer at the Akron, Ohio-based nonprofit Weaver Industries, Carla McDonald’s responsibilities include: all things financial (accounting, accounts receivable and payable, financial statement preparation, and financial presentations to the board of directors); overseeing a team of two (soon to be three) people; and maintaining regulatory compliance requirements for the organization. But […]

nonprofit controllers

Making an Impact in Their Communities Drove These Accountants to Become Nonprofit Controllers

For Denise Garcia, it was taking a course in nonprofit accounting while a student at the University of Houston. For others, like Raquel Cosio, CPA, who started their careers in public accounting, it was auditing nonprofit clients. It was experiences like these that gave Garcia, Cosio, and other accountants a glimpse into the nonprofit world—a […]

We Three Kings Of Orient Are, Bearing Noncash Cash Gifts of Less than $500, Therefore Don’t Have to File Form 8283

Exposure Drafts appears every other Wednesday. Send your accounting cartoon suggestions to editor@goingconcern.com and follow Greg Kyte on Twitter.

How to Make an Impact at a Nonprofit

People join nonprofits for lots of reasons. Often it’s from a desire to give back to the community or passionately support a cause. Other times a person is new to the community and wants to make some connections. This often leads a membership in a local business organization. People exclusively looking for clients might join […]

RSVP: An Overview the Statement of Financial Position for Nonprofits on March 26th

Event Date: March 26, 2014 This material focuses on non-profit organizations organization, accounting and reporting.  It includes discussions of assets, liabilities and net asset accounts that are common to most non-profit organizations. Learning objectives are: Understand the fundamental definitions and operating principles of non-profit organizations Review significant Statements of Financial Accounting Standards for non-profit organizations […]

CPA Goes on a PR Campaign After Tax Fraud Conviction; Suggests John McCain Will Vouch for Him

Last week a Santa Barbara CPA by the name of Steve Pybrum was sentenced to three years in prison after he was convicted of "filing false individual income tax returns." You see, Mr. Byrum was operating your run-of-the-mill "full service CPA firm" called Pybrum & Company, but he was of the opinion that his business was […]

ParenteBeard’s “Audit” of Santa Is as Reliable as Santa Himself

ParenteBeard, the 23rd largest CPA firm on the whole damn planet, issued the following press release earlier this month. This holiday season, ParenteBeard, a top 25 U.S. accounting firm, is helping to balance the books of what would be the largest nonprofit in the world: Santa, Inc. […] ParenteBeard began its audit of Santa, Inc. […]

Occupy Wall Street Learning That Accountants Aren’t Too Interested in Working on the Cheap

As we've discussed, Occupy Wall Street has had a bit of trouble with tracking their finances. Donations initially were collected in "a large cooking pot covered in cardboard and duct tape" but as methods became more sophisticated; "donation buckets" and "a yellow messenger bag" were also utilized. Expenses are numerous, including but exclusive to meals, bail, and […]

Would Anyone Actually Download This AICPA App?

That’s a serious question.

I’ve been to events with lots of accountants huddled up in a room showing off their technology so I am not implying that CPAs don’t care about apps, I’m just wondering if anyone would download an app dedicated to a particular AICPA conference.

CrowdCompass released the AICPA Not-For-Profit Financial Executive Forum app on October 15th and as far as I can tell, no one cares about it.


The description reads as follows:

Between the slowed-down economy and a more stringent regulatory environment, the last few years have led to a “new normal.” Gaining lost momentum and getting back on track with smart new strategies and practical solutions are necessary for success.

This AICPA Not-for-Profit Financial Executive Forum is the solutions-based conference that features top experts and is designed specifically to address these issues and provide the answers for your financial, technical and structural operations. You’ll come away with valuable insights and tools to take back to your organization and implement immediately.

The 2011 NFP FEF (if that isn’t a mouthful…) sounds like a great time for anyone actually interested in non-profits (my unofficial research shows there are about 7 of you). Not-for-profit financial executive staff members, CEOs, CFOs/executive directors and directors of finance in NFP could probably learn a lot and enrich the very core of their work by hanging around at one of these forums. Hey, you can even check in on foursquare from the conference. But the Android app? I’m not sure I see the benefit there.

Does an app make navigating the conference any easier? You still have to remember the name of the person you met three hours ago who you’re being introduced to again and no app can help you with that. It’s not like there are several square miles of territory to navigate as you’re cruising the conference circuit, so is it necessary to have your exact position on the map? Maybe I’m just an old BlackBerry user who doesn’t get it.

Anyway, the conference is from October 27-28, 2011 at the Westin in my former hometown of San Francisco, CA so it isn’t too late for you to register and fly out there to the Land of Fruits and Nuts for some non-profity goodness.

If anyone actually downloads and uses this app, can you please get in touch with me? I’m curious to hear what you did with it. Sorry, that’s kind of lazy but the AICPA isn’t going to sell me the email list of anyone who buys the app so this is the best we’ve got.

Tax Intern Wants to Know What Job Opportunities Exist After a Three Year Stretch at a Big 4 Firm

Ed. note: Willing to take some advice from three strangers and peanut gallery full of overworked, underpaid paper pushers (aka spreadsheet jockeys)? Email us at advice@goingconcern.com with your problems.

Hi!

First I just want to say that this website made all the down time during my Big 4 internship bearable!! Seriously, there are no words to express my gratitude!

I’ve learned a lot from your site, and I’m kinda hoping you can give me some advice…

Right now I have a full time job offer in Tax, but lately I’ve been questioning if this is the right move for me.

Honestly, I don’t think I can handle more than 3 years of public accounting, so I was wondering what job opportunities there are in the private sector for tax professionals with only two to three years of public accounting experience? (I feel like the focus is usually on audit, so I’m finding I don’t really know a lot about the tax world outside of the Big 4).

Also, I would eventually love to work for a nonprofit…would I have better luck at finding a job in this sector with an audit or advisory background, as opposed to tax?

Thanks a million!!!!

Clueless

Dear Clueless,

Thanks for stopping by GC this summer and squeezing us into your “busy” internship days. (Shameless plug – remember to talk about this site when you return to campus this fall. We’ll be talking about recruiting on a regular basis).

Let’s assume that you are going to accept the offer for Big 4 tax. Maybe you have an MS in tax. Maybe there are not any audit positions available for campus hires. Maybe you have a crush on the lead engagement partner. Not my biz. Whatever your situation, you should be focusing on making yourself as merlo-rounded as marketable as possible. A few ideas:

1) CPA – Not even a question. Get it done immediately.

2) Request an audit rotation – As you experienced this summer, there are times when things get a bit slow for tax professionals. Request short term rotations into audit where you can receive additional exposure. This will be marginally easier to do if your CPA is already completed.

3) Seek out non-profit clients – It does not matter if your experience is on the audit or tax side; the goal here is to receive client exposure for a look at the culture/business model/workplace environment at some of your local NFP’s.

4) Volunteer – If NFP clients are not an option, try to find time in your schedule to volunteer. Like any new job possibility, you should research what life is like at a non-profit before jumping into the career move.

As for private sector jobs, with 2-3 years tax experience you’ll have little trouble, as many businesses are trying to do more tax work in-house as opposed to contracting it out to their CPAs. I’d encourage you to stick it out until Senior Associate if you can, since this will give you ample opportunities outside the firm (and maybe a nice get-away). Good luck.

GCers – your thoughts?

An Accounting Director, Who Really Needs a Drink, Needs Advice on His Next Career Move

Ed. note: Have a question for the career advice brain trust? Email us at advice@goingconcern.com.

Advice gurus,

I’m a Accounting Director (upgraded staff accountant really) at a small non-profit. I’ve been with the org since getting out of college 2 years ago. My firm loves me but I’ve decided to switch, mainly because I’m not liking the AD position. First because come close of the year and January, I pretty much want to drown my life in as many Guinesses as I can find. 80+ hours per week just sucks after a while and my org doesn’t let me drink. 🙁 Second is personal – I’m wanting to be closer to family and friends.

I took the AD job because I thought it would put me well on my way to a CFO job down the road. So my question is this, are there other good ways to get to that end without going AD, Controller, CFO or something similar? Do I just need to suck it up and keep being an AD for a few more years before I can move to a controller position? Finally, if I take a staff accountant position how does that look? Thanks.

-Can’t wait to drink again

Good afternoon Guiness,
If being a CFO is your goal, you need to assess the qualities and skillsets that CFOs in your industry possess. Consider a few things when doing so:

1. Get Your CPA – There’s no denying the importance of getting the three letters next to your name. As you progress you in career, having a CPA will keep doors open for you. Read up on Adrienne’s great CPA coverage if you don’t know where to start.

2. Lose the title – You’re still very young in your career, so my advice to you is to worry less about titles and more about opportunities that open doors and expose you to a variety of accounting responsibilities. This is meant as no offense to you and your career thus far, but a staff accountant at a large corporation most likely sees more complicated accounting issues than say, a charity bookstore. Roll up your sleeves and challenge yourself.

3. Location – before you have a spouse, kids and a mortgage, get back to where you want to be. It will be easier to find a staff-level job than a specialized, more technical job that you’ll be qualified for five years from now. And call your mother, she misses you.

4. It’s not like Mad Men but… – The liquor store sells the little nip bottles for a reason. It’s a scientific fact that whiskey helps ease the frustration of 80+ hour work weeks.

May the drink-at-work Spirits be with you,
DWB

IRS Filings Show This Whole ‘Rapture’ Thing Might Prove Quite Lucrative

According to their most recent IRS filings, Family Radio is almost entirely funded by donations, and brought in $18 million in contributions in 2009 alone. According to those financial documents, accountants put the total worth of Family Radio (referred to as Family Stations on its official forms) at $72 million. With those kind of financials — and controversial beliefs — it’s no wonder skeptics have accused the group of running a scam. [CNN via NetNet]

Ernst & Young, Guy Who Plays Boy Wizard to be Recognized by Trevor Project

Having seen the rabid crowds outside FAO Schwarz to see this guy first hand, it’s hard telling what kind of internal battle there is at E&Y to rub elbows with Harry Potter (even if he’s likely to be sans spectacles).

Daniel Radcliffe will be honored by The Trevor Project with the Trevor Hero Award during “Trevor LIVE” at Capitale (130 Bowery, NY, NY). The annual show benefits the life-saving work of The Trevor Project and will also honor Ernst & Young LLP with the Trevor 2020 Award.

If you’re not familiar with the Trevor Project, they do great work, focusing on “suicide prevention efforts among lesbian, gay, bisexual, transgender and questioning (LGBTQ) youth.” Kudos to E&Y for the recognition.

Notable Charitable Donation of the Day: Useless Pittsburgh Steelers Super Bowl Champions Merchandise Not so Useless

Cheer up Steelers fans! All those cheesy hats and t-shirts you were dying to wear will go to those in need over seas, thanks to the good people at World Vision:

Preprinted shirts, sweatshirts and hats that claim the Steelers won Super Bowl XLV will be shipped to people in other countries. Volunteers at World Vision, in Sewickley, prepared the clothing for shipment on Wednesday. The organization received 150 boxes of items valued at nearly $200,000. The items will be shipped within the next few months and for the first time ever a group of NFL players will help deliver the merchandise.

$200k In Steelers Super Bowl Victory Gear Donated To Needy Countries [WPXI]

An Accounting Job Search Strategy for the International Student

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.

In my experience, the most important thing you need to consider when looking for a job in the U.S. as a foreigner is how to work here legally. International students looking for part-time work are allowed to work no more than 20 hours a week to maintain F-1 visa. After graduation, to stay in the United States, one must find an employer willing to sponsor your working visa (called an H-1B visa).

I came to the U.S. last August from China, and am enrolled in a master of accounting program at George Washington University in Washington, DC. Like other international students in a completely new place, I initially felt hopeless as to where to start my job search. I began searching recruiting websites, but found that these websites aren’t as helpful for students without experience.

Another method I tried was to take advantage of all the resources my school offered, including a career center. These often offer more entry-level opportunities. You can often find networking opportunities through career centers as well.


I was honored to act as the president of the student chapter of IMA® at my university in my first semester and actively took part in the events held by the local professional chapter every month. During this time, I not only got to know some professionals but also got an understanding about business culture in the U.S. – a great help in my job hunting.

In my second semester, I secured my first unpaid internship with a nonprofit organization located in Washington, DC. At the same time, I volunteered to help prepare tax returns. These experiences helped build up my résumé and enhanced my communication skills. Likewise, for those international students who do not have any working experience, it might be a good start to focus on volunteer opportunities and unpaid internships. Nonprofit and international institutions are more willing to sponsor foreign students since they know the process quite well. For those who work in companies that are hesitant to sponsor your working visa, try talking with your supervisor or the HR department to explain that the visa sponsorship process is simple.

This past summer, through on-campus recruiting, I was offered a challenging internship with a government contractor. After spending the summer there, I gained a deeper understanding of accounting issues on daily basis and had more responsibilities.

In addition to adding professional experience to my résumé, I was also looking to strengthen my academic background and social skills, which included passing the CMA® exam and becoming more involved with IMA. I will also attend the 11th annual IMA Student Leadership Conference in California this November. Currently, I am working as an intern at a financial institution which has relationships with banks in China. In addition to assuming some financial and accounting responsibilities, I will also be involved in projects aimed at the Chinese market.

Thanks to my former experience, I got used to my new position quickly and was able to perform my work with minimal supervision. The company even expressed their willingness to sponsor me for the H-1B when I graduate. This shows how it is very useful to rely on your educational and professional background and seek out job opportunities with links to your home country.

Accounting News Roundup: Political Nonprofits Pushing the Limits with Ads; Familiar “Outrage” Over Big 4 Audit Industry Dominance; Obama Attacks GOP Tax Policy in Weekly Address | 10.18.10

Groups Push Legal Limits in Advertising [NYT]
“The basic rule of thumb for nonprofit groups organized under Section 501(c) of the tax code is that more than 50 percent of their annual activities cannot be political. Although it is a matter of debate how spending on traditional issue ads would be categorized by the Internal Revenue Service, it is indisputable that spending on express advocacy would be classified as political.”

Lords to hear top six firms on audit reform [Accountancy Age]
“A showdown has been planned for the UK’s top six acevidence is heard at a House of Lord’s inquiry into audit reform.

The House of Lords Economic Affairs Committee will take evidence from the heads of the Big Four – PwC, Deloitte, KPMG and Ernst & Young – followed by their mid-tier rivals – BDO and Grant Thornton – during its inquiry into audit competition.”

Accounting industry sees ray of light on the horizon [Crain’s]
“Demand for accountants is forcing large CPA firms to bump salaries by as much as 3.8% next year, the steepest jump since 2008. U.S. companies with more than 20 employees plan to increase hiring of full-time accountants and finance personnel this quarter for the first time since early 2009, says Michael Shapow, a senior vice-president at Menlo Park, Calif.-based staffing firm Robert Half International Inc.

During the dot-com era, bachelor’s degrees in accounting fell from 53,000 in the mid-1990s to 35,000 in 2002, according to the American Institute of Certified Public Accountants in Washington, D.C. The figure has boom-eranged, rising to 49,000 in 2008, creating a new problem: not enough professors.”

Systemic Risk! Dominance! Momentum! Auditors In Crisis. Again. [Re: The Auditors]
The “outrage” and “risk” over the dominance by the Big 4 in the audit industry is so played.

Obama Attacks Republicans on Tax Policy [TaxProf Blog]


AICPA to SEC: Companies Will Need as Much as Five Years to Ready for IFRS Adoption [JofA]
“In the portion of its letter regarding the impact of IFRS conversion on contractual arrangements, the AICPA voices support for a requirement for companies adopting IFRS to file one year of comparative financial statements rather than two. ‘Our research indicates that companies will need five years preparation time to adopt IFRS if the SEC requires two years of historical comparative financial statements. If only one year of comparative financial statements is required, a four-year transition period would be needed to adopt IFRS.’ The SEC has not said what the requirement would be.”

Dear Nonprofits, Today Is Really Your Final 990 Deadline (No Seriously, Final)

Just in case you have been hiding under a rock for most of 2010, the big deal for nonprofits has been this whole 990 requirement and, more specifically, the fact that many still haven’t filed information returns despite every trick in the book by our friends at the IRS to get them to comply.

First they asked nicely. Then they sent out reminders. And then they went so far as to give procrastinating charities an extension on the May 15th deadline so they could get their butts in gear and start filing away. Apparently this wasn’t enough for some offenders so the Service stepped it up a notch by calling everyone out in the hopes that being publicly humiliated might do the trick. We can only hope.


We found it especially interesting to see the Cal State Sacramento Accounting Society on the list of California 990 slackers but unfortunately didn’t have the time nor energy to comb through all 1,162 pages to see who else we know on the list. 1,162! In California alone!

We did manage to skim it, finding Oakland’s “Get Legit” and “Get It Together Inc” charities hilariously ironic considering the Service is just trying to get these lazy procrastinators to get it together. Perhaps those guys need to focus efforts on their own affairs and stay out of the community until they can figure this simple little task out. Get it together!

Listen people, this is serious. Sure the IRS said it was serious months ago but we’re serious it’s serious, one need look no further than the IRS document calling these guys out to know just how serious. “Exempt Organizations At-Risk of Revocation” makes it pretty clear at this point. Now we’re not saying today’s deadline is absolutely 100% but we’re pretty sure the Service is done playing around while nonprofits figure this out.

Want another good laugh? The American Tax Reform Committee, American Tax Reform Foundation and the American Taxpayers Alliance (all DC-based) must have been so busy trying to hook us up on some tax reform that they forgot to do some important interacting with their favorite agency. Whoopsie.

Even funnier, apparently the DC Internal Revenue Agents Association and Internal Revenue Service Employees Beneficial Association must have missed out on the memo as they are on the 990 slacker list too. Shock that.

P.S. – Internal Revenue Service Bowling League of Dallas, you guys are on the list too. Put down the ball and get on it instead, you of all people should have been the first ones with your 990s ready to go! Let’s not forget the IRS Employees Association of the District Direct in NY, Internal Revenue Service Employees Fund of Des Moines and Internal Revenue Service Employees Association of Wilmington, you guys have some ‘splainin to do.

Your Next Sunday Sermon: Tax Cuts with a Twist of Fire and Brimstone

Isn’t church boring and preachy enough?

Current law prohibits pastors from speaking on politics or endorsing a political candidate, but David Barton of WallBuilders says the IRS’s intimidation of removing a church’s tax exemption status is unconstitutional. Even though some pastors have intentionally crossed the line, Barton does not think the IRS wants to take them to court because it may lose.

“The IRS doesn’t have any interest in doing this because if they do, I believe they know they are going to lose. And if they lose, you have 370,000 pastors in America who suddenly find out that there’s no restriction on them,” Barton suggests.

But this isn’t about politics, this is about TRUTH!

“You cannot lose your tax exemption as a church because as a church, you have a constitutional standing for tax exemption,” he points out. “So with that basis, losing your letter means absolutely nothing — and that’s something pastors are now figuring out.”

Barton argues that the pulpit was and should continue to be the news perspective for America, so he encourages all pastors to speak out and stand for truth.

Barton: No need for pastors to fear IRS [One News Now]

Minnesota Pol Invites Nonprofit Leaders to Hear Some Hot Air as Opposed to Filing Tax Returns

Attention Twin Cities nonprofit leaders! Looking to blow off your responsibilities for one more day? Don’t know what we’re talking about, you say? Yeah, losing your tax-exempt status isn’t really that important.

Anyway, Congresswoman Betty McCollum (who, apparently, isn’t aware of more pressing issues) is giving you the opportunity today at 1 pm local time to discuss HR 5533 rather than file your delinquent 990(s) that are DUE TOMORROW.

Washington, DC – Congresswoman Betty McCollum (MN-04) will join nonprofit leaders in a public discussion about how to strengthen Minnesota communities by improving the partnership between nonprofits and the federal government. The conversation will be an opportunity for local nonprofit and foundation leaders to engage in dialogue about the Nonprofit Sector and Community Solutions Act (H.R. 5533), federal legislation introduced by the Congresswoman.

There has already been a tremendous response from the nonprofit community. The event has reached its full capacity of nearly 200 attendees.

Although the nonprofit sector plays a significant role in the U.S. economy and is critical for the implementation of government policies and programs, no federal entity is responsible for promoting the success of the nonprofit sector as a whole. In an attempt to bridge that gap, Congresswoman McCollum introduced the Nonprofit Sector and Community Solutions Act in June. This bipartisan legislation takes the first steps toward integrating the nonprofit sector into the federal policymaking process by establishing formal structures in Congress and federal administrative agencies focused on the success of nonprofits. To date, H.R. 5533 has 20 cosponsors and is officially supported by over 500 nonprofit organizations across the country.

WHO: Congresswoman Betty McCollum (MN-04) (keynote)
Jon Pratt, Executive Director, Minnesota Council of Nonprofits (keynote)
Pham Thi Hoa, Executive Director, CAPI
Mark Peterson, President and Chief Executive Officer, Lutheran Social Service
Sandra Vargas, President and CEO, The Minneapolis Foundation

WHEN: Thursday, October 14, 2010, 1:00 – 2:30 PM

WHERE: Neighborhood House, 179 Robie Street East, St. Paul, Minnesota, 55107-2360

Iowa Pastor Practically Begging the IRS to Sue Him, Consume His Life for Years to Come

“I’m tired of pastors submitting to this tyranny — and I’m expecting to try to get the IRS to sue us so that we can take it all the way to the Supreme Court and restore freedom in America’s pulpits.”

~ Pastor Cary Gordon, of Cornerstone World Outreach in Sioux City, Iowa, has some strange ambitions.

Congressman Who Apologized for Apologizing to Tony Hayward Now Wants the IRS to Snoop Around the BCS

Rep. Joe Barton (R-TX) – who probably isn’t in any danger of losing reelection – appears to be pandering to key fanatical college football voter bloc.

“As public charities that take in millions of dollars each year, they receive significant tax exemptions and benefits that must not be abused,” wrote the four House members in a letter to IRS Commissioner Doug Shulman, obtained Tuesday by The Associated Press. The lawmakers, all critics of the BCS, added: “We therefore ask that you act on our request and thoroughly examine these troubling claims” made about the bowls.

Tax cuts and estate tax policy being ignored and these ‘troubling claims’ are you are bringing to the IRS’s attention? We’re all for a playoff in college football and we understand that tax policy can make your head hurt sometimes but but FOR THE LOVE OF GOD this is what some people in DC are doing:

The letter was signed by Texas Republican Joe Barton, who has sponsored legislation aimed at forcing college football to switch to a playoff system to determine its national champion; Wyoming Republican Cynthia Lummis, a co-sponsor of Barton’s bill; Texas Democrat Gene Green, who has co-sponsored a resolution calling for a playoff system and for a Justice Department investigation; and Utah Republican Jason Chaffetz, a former BYU kicker.

Lawmakers urge review of bowl game tax complaint [AP]
Earlier:
Anti-BCS Group Sics IRS on Bowl Games Over Tax-Exempt Status

Big 4 Firms Score Perfect on 2011 Corporate Equality Index

Yesterday The Human Rights Campaign Foundation released their Corporate Equality Index for 2011. If you’re not familiar with the survey, it “assesses American workplaces on lesbian, gay, bisexual and transgender equality.”

We’re happy to report that the Big 4 are perfectly gay friendly which probably surprises no one (or not?). The firms go to great lengths to be inclusive, especially in public eye and a ranking like the HRC’s is a perfect opportunity to call attention to their efforts.

This is the ninth year for the survey and its largest – with 844 companies being rated. Scores are determined based on the following criteria:

Criterion 1a Prohibits Discrimination Baation (15 points)

Criterion 1b Provides Diversity Training Covering Sexual Orientation (5 points)

Criterion 2a Prohibits Discrimination Based on Gender Identity or Expression (15 points)

Criterion 2b Provides Diversity Training Covering Gender Identity OR Has Supportive Gender Transition Guidelines (5 points)

Criterion 2c Offers Transgender-Inclusive Insurance Coverage for at Least One Type of Benefit (5 points)

Criterion 2c+ Offers Transgender-Inclusive Insurance Coverage, Including Surgical Procedures (4 )

Criterion 3a Offers Partner Health Insurance (15 points)

Criterion 3b Offers Partner Dental, Vision, COBRA and Dependent Coverage Benefits (5 points)

Criterion 3c Offers at Least Three Other “Soft” Benefits for Partners (5 points)

Criterion 4 Has Employer-Supported Employee Resource Group OR Firm-Wide Diversity Council (15 points) Would Support ERG if Employees Express Interest (half credit)

Criterion 5 Positively Engages the External LGBT Community (15 points)

Criterion 6 Responsible Citizenship Employers will have 15 points deducted from their score for a large-scale official or public anti-LGBT blemish on their recent records (-15 points)

Big 4 spin-off Accenture also scored a perfect 100 while Capgemini scored a 60, receiving no points for any of the #2 criteria or criterion 5. We took a quick glance through and didn’t notice any more accounting firms, although McGladrey parent H&R Block is on the list, scoring at 65, missing on criteria 2a, 2c and 5.

This seems like a pretty easy diversity win for most firms. Prohibiting discrimination is a piece of cake (enforcing it is another discussion) while providing training and benefits is simply good business. Likewise, if a company has an “employer-supported resource group” or “diversity council,” engaging the LGBT community should be a natural progression.

Where firms may get tripped up is the “Responsible Citizenship Employers” criterion. “[A] large-scale official or public anti-LGBT blemish” consists of the following:

Scores on this criterion are based on information that has come to HRC’s attention related to topics including but not limited to: undue influence by a significant shareholder calculated to undermine a business’s employment policies or practices related to its LGBT employees; directing corporate charitable contributions to organizations whose primary mission includes advocacy against LGBT equality; opposing shareholder resolutions reasonably aimed at encouraging the adoption of inclusive workplace policies; revoking inclusive LGBT policies or practices; or engaging in proven practices that are contrary to the business’s written LGBT employment policies.

While it isn’t likely that any firm would fall victim to this, law firm Foley & Lardner was dinged for representing clients that opposed gay marriage even though they provided many services to many LGBT causes.

As much as we don’t like it, bigoted, well-funded nonprofits need professional services and they pay accounting firms lots of money to provide them with services. As of now, the HRC doesn’t seem to be holding that against professional services firms but this is a divisive issue, not matter how you slice it. And until total equality is achieved, the HRC will likely keep a close eye on companies that assist groups it opposes.

Workplace Equality Takes Center Stage with Record Number of Companies Rated in HRC’s 2011 Corporate Equality Index [HRC]

Is Anyone Surprised That Christine O’Donnell’s Nonprofit Failed to File Their Tax Returns?

We were really hoping to avoid the whole Christine O’Donnell anti-masturbating/witchcraft/evolution-is-a-myth dealio but we can’t, in good conscience, ignore the fact that the nonprofit group founded by a candidate for the U.S. Senate hasn’t bothered to file tax returns in three years.

The AP got their hands on IRS documents that show O’Donnell’s “pro-abstinence outreach organization” failing to file their 990 for the past three years. This, as you may know, means that the anti-pre-marital bumping uglies organization could lose its tax-exempt status.


O’Donnell’s camp is blowing this off (seems to be standard operating procedure), “It’s not any big deal. I’m dealing with this for all kinds of clients right now,” the AP quotes the campaign’s lawyer, “There are thousands of nonprofits doing this. Everyone is scurrying around.”

According to the AP, the most recent return filed by Savior’s Alliance for Lifting the Truth (SALT) shows $2k in contributions and $1,973 in expenses.

Since this attorney seems to be on top of the situation, we probably don’t have to tell her that the nonprofit can likely file a 990-N in less time than it would take for a young Salty to engage in a manual override. Or cast a spell on the IRS. Whichever.

O’Donnell nonprofit failed to file [AP]

Accounting News Roundup: Southwest Loves AirTran; PCAOB Starts Negotiations with European Counterparts; Debunking the ObamaCare Tax on Home Sales | 09.27.10

Southwest Airlines to Buy AirTran [WSJ]
“Southwest Airlines agreed to acquire AirTran Holdings Inc. for $1.4 billion in cash and stock, the first major merger among healthy U.S. discount carriers.

The proposed deal follows Southwest’s failed effort to acquire Denver-based Frontier Airlines earlier this year and would revive its stalled efforts to launch international services by accessing AirTran’s network to the Caribbean.”

Troubling Trades Found Ahead of Flash Crash [DealBook]
“The Chicago data firmed strange patterns — dubbed “crop circles” — in stock market data around the flash crash on May 6 has put together a new analysis that it says backs the theory that one or more trading firms was intentionally trying to flood exchanges with orders.

The firm, Nanex, hopes the Securities and Exchange Commission and the Commodity Futures Trading Commission will be able to address its analysis in their long-awaited report on the flash crash due to be published before the end of this month.”

Treasury Said to Prepare AIG Exit, Repayment Plan [Bloomberg]
“The U.S. Treasury Department may announce plans as early as this week to return American International Group Inc. to independence and recoup taxpayer money from the insurer’s bailout, according to three people with knowledge of the talks.

The biggest part of that strategy is for Treasury to begin converting its $49 billion preferred stake into common stock for sales by the first half of next year, said the people, who declined to be identified because the negotiations are private. The timing of an announcement depends on the pace of talks between regulators and the New York-based insurer, and discussions may extend beyond this week, the people said.”

PCAOB Begins Negotiations With European Regulators [Compliance Week]
“Now that Congress and the European Union have removed a big obstacle to international audit inspections, the Public Company Accounting Oversight Board is trying to forge some new relationships with its counterparts overseas to get back on track.

PCAOB spokesman Colleen Brennan said the board is beginning to negotiate with various audit regulators in Europe to see how it can proceed in each country inspecting audit firms that audit financial statements in U.S. capital markets. The board is hopeful it can reach bilateral agreements with individual regulators to perhaps gain access to work papers that will enable the board to fulfill its inspection mandate under the Sarbanes-Oxley Act.”

IRS Offers Olive Branch to Business [CFO]
“The Internal Revenue Service has taken taxpayers’ comments to heart and revised its proposal on uncertain tax positions, in a way that is much more favorable to corporations. The final Form 1120, called Schedule UTP, and its instructions eliminate two draft requirements that companies argued were particularly onerous: the calculation and inclusion of a maximum tax adjustment for each position, and disclosures around positions that are not subject to an accounting reserve.

IRS Commissioner Douglas Shulman announced the release of Schedule UTP on Friday, in a speech delivered to the American Bar Association in Toronto. The agency has instituted a five-year phase-in period for filing the schedule, said Shulman.”


Job Interview Is Where Most Mistakes Are Made, According to Survey [FINS]
If you make a faux pas during an interview, rather than faint consider five suggestions that FINS has to keep your hopes alive.

PwC names industry leaders and academics as non-execs [Accountancy Age]
“Dame Karen Dunnell; Sir Ian Gibson; Professor Andrew Hamilton; Sir Richard Lapthorne; and Paul Skinner and come from the fields of business, academia and the public and professional services sectors.

They will sit on a newly-formed public interest body where they will be joined by partners fo [sic] the firm but have a majority.”

Cloud Computing: What Accountants Need to Know [JofA]
A crash course.

Finding Surprises in the Small-Business Jobs Bill [You’re The Boss/NYT]
“Most of the controversy surrounding the small-business jobs bill that cleared the House of Representatives on Thursday — after nearly a year of discussion — concerned a $30 billion small-business lending fund to be established by the Treasury Department.

But like most of the legislation, the lending fund is a temporary fix. It will make investments in banks for just one year. The tax breaks in the bill, worth about $12 billion, are mostly good for a year or two.”

Dodd-Frank Lets Small-Company Auditors Off the Internal Controls Hook: Putting a Partial Lid on the Sarbox [Re:Balance]
Jim Peterson reflects on Dodd-Frank’s ‘get out of jail free’ for small company filers.

Would “ObamaCare” (Health Care Reform) Tax the Sale of Your Home? Probably Not. [Tax Foundation]
“There has been a story and an e-mail floating around for some time claiming that the recent health care reform bill (PPACA) would impose a 3.8 percent “sales” tax on the sale of every home. The e-mail has been rightfully debunked by the usuals (Factcheck.org and Snopes), but here is what the bill would actually do regarding taxation of the sales of homes.”

Pastors Defy IRS On ‘Pulpit Freedom Sunday’ [ABC News]
“The pastors, along with the Scottsdale, Ariz.-based nonprofit Alliance Defense Fund, planned today’s event as a reaction to a law stating that churches are not allowed to support politicians from the pulpit, according to the ADF.

The growing trend is a challenge to the IRS from the churches, and may jeopardize their all-important tax-exempt status. But some pastors and church leaders said they are willing to defy the law to defend their right to freedom of speech.”

Accounting News Roundup: Doubt Over Taxes Reaching Fever Pitch; E&Y to Hire 6k Off Campus in FY11; Honest Answers on Tax Policy in an Election Year | 09.24.10

‘Consumers Are Paralyzed’ Over Tax Doubt [WSJ]
“Congress halted plans to pass a major tax bill before the November elections, leaving taxpayers and financial advisers unsure of how to plan for the future.

One of three scenarios face Congress when it returns from the election recess: It will extend all of the Bush tax cuts of 2001, which expire this year; it will hammer out a new law, perhaps using some of President Barack Obama’s budget proposals; or lawmakers will let the cuts expire, which would mean higher rates for all taxpayers.

Meantime, ‘consumers are paralyzed,’ said Dean Barber, a planner who heads the Barber Financial Group near Kansas City. ‘They have money to spend but they aren’t going to until they know where the tax burden will lie next year.’

The problem extends to business as well. ‘There are 29 million private businesses in this country, and they interact with our members,’ said Barry Melancon, head of the American Institute of Certified Public Accountants. ‘Universally we are hearing that businesses are paralyzed by lack of capital and uncertainty over taxes.’ ”

SEC Hiring for Multiple Offices [FINS]
“The SEC is hiring qualified talent for both its Division of Enforcement and its Office of Compliance Inspections and Examinations (OCIE). The agency is looking for candidates with experience in risk management, operations and accounting and other specialties.

In testimony given yesterday at a Senate Banking Committee hearing, Robert Khuzami, director of the Division of Enforcement and Carlo di Florio, director of OCIE, spoke to their respective units’ hiring needs.”

Ernst & Young Previews New Campus Recruitment and Social Media Strategies [PR Newswire]
E&Y is hiring 6,000 campus recruits – both interns and new associates – this fiscal year. That’s an increase over last year’s numbers (although the press release doesn’t say by how much). The firm also states that 60% of its workforce will be Gen Y by the end of 2011.


Tax Policy in an Election Year [Tax Updated Blog]
Joe Kristan answers questions that politicians won’t.

Comtech Telecommunications Does the Right Thing by Fixing Errors in Latest Report [White Collar Fraud]
Sam is sending an autographed “WANTED” poster of his cousin “Crazy” Eddie as an “attaboy” for Comtech CEO Fred Kornberg for “[taking] the high road and corrected its errors without attacking a critic.” That “critic” being Sam, who reported on Comtech’s erroneous EBITDA calculation last July.

Whether this type of nostalgic temptation works for the other company execs that are on Sam’s radar remains to be seen.

Pastors to challenge IRS by endorsing candidates [AP]
One hundred men and women of the cloth will be endorsing political candidates from their pulpits this Sunday. If the IRS is doing its job, agents should be kicking down doors at many of God’s homes on Monday.

Anti-BCS Group Sics IRS on Bowl Games Over Tax-Exempt Status

If you’re a college football fan, the debate over the Bowl Championship Series is something that has been rehashed every year since it came into existence. As we see it, there are three camps to this situation:

1) Those that hate the BCS with every fiber of their being and would sacrifice a family member (not always a hard choice, we realize) to have a playoff system.

2) Those that are fairly indifferent, which includes significant others that only pay attention because their gridiron-crazed other half can’t stop talking about it – “Nothing you can do about it, so just leave it alone.”

3) Those that support the BCS system because it makes them filthy rich.

But who knew that there was political action committee whose sole purpose for existing was bringing this controversial enigma to its knees? As you might expect, their pursuit has been all for naught but now they are feeling more confident because they are pursuing the BCS in a way that has proven historically successful: tax-related charges:

Playoff PAC, a political action committee that wants the bowls replaced with a championship playoff system, plans to file a complaint with the Internal Revenue Service on Thursday against the operators of the Fiesta, Sugar and Orange Bowls, three of the five games that constitute the Bowl Championship Series (the others are the Rose Bowl and the BCS title game). The Associated Press obtained a copy of the complaint prior to its filing.

A team of six lawyers and one accountant, working for no compensation, reviewed 2,300 pages of tax returns and public documents associated with all four bowls, said Playoff PAC co-founder Matthew Sanderson. The Pasadena, Calif.-based Rose Bowl was found to be “fairly free of these irregularities,” Sanderson said.

Think about it. A seemingly invincible opponent – Al Capone, UBS, you get the pic – has to have a chink in its armor somewhere. With this in mind, the Playoff PAC figured that finding a violation of the mind-numbing U.S. tax law was the best way to slay the BCS beast.

Playoff PAC is citing ‘extravagant’ salaries for the Sugar and Fiesta Bowl CEOs ($645k and $600k respectively) compared to the salaries of the Rose and Orange Bowls ($280k and $360k) as well as zero-interest loans that were provided to Fiesta Bowl executives. Playoff PAC is also poking around perks – the usual: golf, entertainment – provided to Bowl execs and possible extensive lobbying by the Fiesta Bowl and contributions to J.D. Hayworth, who ran and lost against Senator John McCain in the GOP primary.

Naturally, the Bowl people say this is all old worn-out nonsense from a bunch of haters. They comply with all laws, yada, yada, yada.

The problem, as the AP article points out, is that even if the Bowls are throwing around their donations all willy nilly, that doesn’t mean the IRS will revoke their tax-exempt status nor is it likely to get the playoff system in place that virtually everyone wants.

Using the tax law to break the iron grip that the BCS overlords have on the sport may be the right approach but Playoff PAC is going to need a much more convincing case then some exorbitant salaries, a few rounds of golf and big catering spreads. “IT’S DIVISION ONE FOOTBALL!” after all; it’s not for amateurs (except for the players, of course).

AP Exclusive: Tax status of bowl games challenged [AP]

Who Would’ve Guessed Al Sharpton Knew Nothing About Accounting?

Presumably everyone but if you guessed that the Rev had the good sense to hire a crack-squad of debit & credit mavens to keep everything at National Action Network tip-top, you’d be sorely mistaken.

An accounting firm hired by Al Sharpton’s National Action Network found the civil-rights group in such financial disarray that it flunked its record-keeping — and may not even survive, The Post has learned.

The scathing critique was spelled out in a hard-hitting internal audit of NAN’s books, a copy of which was obtained by The Post.

“The organization has suffered recurring decreases in net assets — and has been dependent upon advances from related parties and the nonpayment of payroll tax obligations — to maintain continuity,” the firm KBL concluded in an April 2 audit of NAN’s 2008 financial records, the most recent available.

The audit, which was submitted to NAN’s board of directors, warned, “These circumstances create substantial doubt about the organization’s ability to continue.”

KBL said it was “unable to form an opinion” on the accuracy of NAN’s financial figures “because of inadequacies in the organization’s accounting records.”

Audit finds Sharpton’s nonprofit on brink [NYP]

The IRS-Free, Islam-Free America Movement Gets a Boost

There are two things that really stick in the craw of many Americans: 1) The freedom-hating IRS and 2) Muslims thinking that they can build mosques in this country wherever they want.

Well now, according to a report issued by The Investigative Project on Terrorism (“IPT”) there is reason to lump the two together because a report now shows that Imam Feisal Abdul Rauf – the leader of the Islamic Community Center planned two blocks away from Ground Zero – obtained a ‘sketchy tax break‘ for a religious group he founded.

The IPT investigation found that “Feisal Abdul Rauf filed for ‘church’ status to the IRS for his newly formed Islamic group in 1998 and listed an apartment building where he claimed in the federal application that 400-500 people worshiped there.”


More alleged chicanery detailed in the IPT press release:

[A] review of the building and real estate records indicates there is nowhere in the building to house that many congregants. ASMA lists its office address as 201 W. 85th St., Apt. 10E on the federal tax form, while it cites only the building address as its location for prayer services.

In the article, IPT also shows:

• Rauf’s American Society for Muslims Advancement listed its office as the apartment of Rauf’s wife, Daisy Khan.

• Khan was listed as an ASMA director living at 201 W. 85th St., Apt. 10E, in the group’s 1997 incorporation papers filed with the state of New York. A year later, the group’s IRS filing does not list Khan as a director but instead gives her home address as ASMA’s address.

• ASMA told the IRS in 1998 that it planned to build a prayer center that would hold up to 1,000 worshipers at a time. That was never built.

• Although ASMA has tax-exempt church status, its website shows it has no permanent prayer site and the group no longer touts religious services as part of its mission.

The Post – likely acting on orders from the News Corp. overlords – inflames things bit further (citing IPT’s report) pointing out all the benefits that the ASMA enjoyed as a result of the exemption:

“Church status” is more than just an exemption — it means never having to pay taxes, file returns or reveal the sources of a congregation’s money or how it’s spent, according to the Washington-based Investigative Project on Terrorism, which discovered the group’s startling claims on the IRS form it filed seeking the special status.

On that form, the organization said it held services at 201 W. 85th St.

That’s a 17-story apartment building with no public space big enough to accommodate the 450 to 500 worshippers the group claimed regularly showed up five times a day to pray.

So now that the IRS has been twisted (albeit marginally) into the Burlington Coat Factory Mosque controversy, opponents of one or both will likely be reenergized for their holiday weekend protesting plans. Although, since the IRS has already been accused of anti-Israel it should make things slightly more interesting.

IPT Investigation Uncovers Problems in Mosque Leader’s IRS Status [PR Newswire]
Sketchy tax break for GZ imam ‘prayer pad’ [NYP]

The Last Thing the IRS Needed Was a Lawsuit Alleging Discrimination Against Israel

But that’s exactly what they got! The pro-Israel nonprofit Z Street filed suit against IRS Commish Doug Shulman because Z Street and other “pro-Israel groups whose policies conflict with that of the [Obama] administration,” are getting the stinkeye from the IRS.


From Zulu Avenue’s complaint:

The case is brought because, through its corporate counsel, Z STREET was informed explicitly by an IRS Agent on July 19, 2010, that approval of Z STREET’s application for tax-exempt status has been at least delayed, and may be denied because of a special IRS policy in place regarding organizations in any way connected with Israel, and further that the applications of many such Israel-related organizations have been assigned to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.” These statements by an IRS official that the IRS maintains special policies (hereinafter the “Israel Special Policy”) governing applications for tax-exempt status by organizations which deal with Israel, and which requires particularly intense scrutiny of such applications and an enhanced risk of denial if made by organizations which espouse or support positions inconsistent with the Obama administration’s Israel policies, constitute an explicit admission of the crudest form of viewpoint discrimination, and one which is both totally un-American and flatly unconstitutional under the First Amendment.

Pro-Israel group claims IRS persecution [Politico]

Accounting News Roundup: EisnerAmper Partner: GM Balance Sheet ‘Stronger’ Ahead of IPO; KPMG Moves on From New Century, Countrywide; No Bookie Needed for Betting on Grades | 08.19.10

GM’s balance sheet draws praise ahead of IPO [MarketWatch]
“Peter Bible, partner-in-charge at accounting firm EisnerAmper LLP, said General Motors is now carrying a much stronger balance sheet than its predecessor, based on the company’s initial public offering filed late Wednesday. ‘Their debt-to-equity ratio looks handsome,’ Bible said in an interview. ‘This thing has gotten restructured quite a bit. GM’s health care liabilities have fallen significantly. As I look at the balance sheet, it is much healthier.’ ”

Move to converge just exported crisis [Re: The Auditors]
KPMG has put two major lawsuits behind them – Countrywide and New Century. One major difference between these two cases was that New Century had a bankruptcy examiner’s report while Countrywide did not.


Judge Denies Online Religious Group’s Bid for Church Status [WSJ]
A virtual “church” gets denied the whole “church” thing.

For the rich, ’tis better to give than wait [Reuters]
“With U.S. taxes almost guaranteed to rise next year, the rich have a rare opportunity to distribute some wealth and preserve their fortunes.

A weak economy has led to razor-thin interest rates and beaten-down valuations, which make giving less costly for and potentially more rewarding to heirs. Moreover, the U.S. government is widely expected to rein in a popular tax-avoidance scheme.

‘This is a golden era for shifting estates and giving assets away,’ said Bill Fleming, a financial planner for PricewaterhouseCoopers in Hartford, Connecticut. ‘If you have an estate plan, keep going: Uncle Sam soon will be back in your pocket.’ ”

Wager 101: Students Bet on Their Grades [WSJ]
“The website attracted wagers by 600 students from two colleges last year, said Mr. Gelbart and co-founder Steven Wolf, graduates of Queens College. This month, the site expanded to let students on 36 campuses—including Harvard, Stanford and Brigham Young University—place bets. More than 1,000 new bettors have signed on.

Lisa Lapin, a Stanford University spokeswoman, said school officials were ‘appalled’ when they learned Stanford students could place bets on their grades, adding, ‘the concept of betting on academic performance is contrary to academic development.’

Lance Miller, a finance major at the University of Pennsylvania, says the criticism misses the mark. Mr. Miller, with a GPA of 3.6, won about $80 on two $40 bets that he would earn A’s in business courses.

‘We’re acing classes to make money—isn’t that what they call a win-win?’ said Mr. Miller, 20.”

Facebook’s Places Feature Lets Users Share Their Whereabouts With Friends [Bloomberg]
“Services that help Web users share their whereabouts and find nearby friends could generate as much as $4.1 billion in annual ad sales by 2015, according to Borrell Associates. The features can help marketers more easily target customers — say, by reaching shoppers when they’re close to making a purchase.”

Grant Thornton Picks Up Four Tax-Exempt Experts from WTAS

We’ve confirmed that Grant Thornton has poached four tax-exempt experts from WTAS, LLC. Presumably beefing up their NFP practice is part of the experienceAugust that Stephen Chipman told the GT troops about last week. Grant Thornton employees received an email last night about the news:

“In line with the strategic plan of our firm and in support of our growing not-for-profit industry practice we are pleased to announce that four experienced tax professionals, formerly of WTAS LLC, have joined our Firm. Frank Giardini, who lead WTAS’ National Exempt Tax Advisory Services Practice (ETAS) as well as Ron Taxin, ETAS Director, Russlee Armstrong, ETAS Director and Andrea Kyzyma, ETAS Manager recently joined us. These individuals bring over 70 years of combined experience in providing tax services to significant non- profit organizations, especially in the higher education and healthcare industries. They have served the tax needs of many large public charities and private foundations. Frank and his group are based out in our Philadelphia office, but will serve clients in both the Northeast and Southeast regions. This group will also play a key role assisting our national NFP tax leader, Dan Romano, in serving GT’s national clients as well as supporting the NFP tax professionals throughout the firm.

A source familiar with WTAS, confirmed these departures, saying that they occurred earlier this summer and thought the move was “a good opportunity for them.” Emails and morse code messages sent to Grant Thornton have not been returned.

Accounting News Roundup: Hurd Surprised HP with PR Move; Whistleblowers Should Avoid…; Rangel Won’t Have This Resignation Talk | 08.11.10

H-P Board Surprised Hurd Didn’t Go Quietly [WSJ]
H-P’s directors ‘hoped he would move on,’ said one person familiar with the situation, adding that the board prefers to focus on ‘protecting the brand and taking the higher ground.’

Mr. Hurd resigned Friday over ethics violations related to his relationship with a former H-P marketing contractor, Jodie Fisher. His exit was immediately followed by hard-hitting comments from H-P executives and a board member. Mr. Hurd left with a separation agreement that included a $12.2 million cash payment and a promise not to disparage the company or ‘induce others’ to do so.

In the days bn, according to a person familiar with the matter, Mr. Hurd hired Sitrick & Co., a Los Angeles-based firm known for handling crisis communications for high-profile individuals, including former H-P chairman Patricia Dunn and celebrity Paris Hilton.”

What Not to Do When Blowing the Whistle [FINS]
Sure you can get paid the big bucks to sing like a canary these days but are some things you might want to consider first.

Black Accountants Group Names New Leader [Afro American]
“Calvin Harris Jr., was recently elected the 24th national president and CEO of the National Association of Black Accountants (NABA). NABA, a 501 c(3) nonprofit, is the leading association for African Americans and minorities in the accounting, audit, finance, information technology, tax, and other business related fields. Harris’s two-year term began July 1.”

Wipfli LLP: Washington state-based Michael R. Bell & Company, PLLC, joins Wipfli LLP [WisBusiness]
“Effective August 1, the partners and associates of Washington state-based Michael R. Bell & Company, PLLC, joined Wipfli LLP, an international CPA firm headquartered in Milwaukee, Wisconsin. Michael R. Bell & Company specializes in providing audit, accounting and consulting services to a variety of health care organizations and will become part of Wipfli’s full-service health care industry practice.”


Salesforce Customers Want Better Link to Accounting [Web CPA]
“A new survey of Salesforce.com customers found that the majority of them want to link more closely between their customer relationship management software and accounting software.

The survey, by Salesforce.com partner FinancialForce.com, found that 67 percent of those using competing packages cited a lack of integration of their current accounting software with customer relationship management software as their biggest headache.”

Rangel Says He Won’t Resign, Requests Ethics Hearing [Bloomberg]
Rangs gave a 30 minute speech yesterday to let everyone know that he’s far too old to just rollover for 13 alleged ethics violations.

Plum Benefit to Cultural Post: Tax-Free Housing [NYT]
Being a director of some of the best known museums in the world is not only lucrative (multi-million dollar salary), you can also get a pretty sweet pad – tax free!

Mickelson Has Arthritic Condition That Made Him Question His Golf Future [Bloomberg]
Rest easy T Fly, Phil says he’s back to 90% just in time for the PGA that starts tomorrow.

Despite What the IRS Says, This Guy Needs Your Help Raising $2 Million

Hinn says he accumulated the deficit in the past few months because offerings at some international appearances did not cover expenses.

Hinn’s reputation as an advocate of prosperity gospel has attracted millions of followers but has also drawn criticism from lawmakers and watchdog groups.

He is one of six televangelists who have been targeted by federal lawmakers investigating compliance with IRS rules for nonprofits.

Hinn has said on his website that external auditors ensure his compliance with IRS regulations and that in 2008, 88 percent of the money he collected was spent on ministry.

For starters, can someone tell the Hinnmeister that external auditors’ word doesn’t mean shit? Second, try shopping for your clothes somewhere other than the David Copperfield consignment store and maybe you won’t have trouble covering your expenses.

Televangelist Benny Hinn asks for $2M in donations [AP]

The IRS Is Giving Small Nonprofits One Final Chance to File Their 990s

Remember the IRS’ failed outreach to small nonprofits back in the spring? Yeah, the May 17th deadline threw a lot small NFPs for a loop and they up and missed the filing deadline completely.

IRS Commish Doug Shulman figured that, despite the unprecedented outreach, the whole snafu was his bad and that nonprofits shouldn’t worry their pretty little heads about missing the deadline, the Service will still take your 990, tardiness notwithstanding.

But that can’t go on forever now, can it? Accordingly, the IRS set a new deadline today to file the 990s and it’s set for a much more memorable October 15th.

WASHINGTON — Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program, the Internal Revenue Service announced today.

The IRS today posted on a special page of IRS.gov the names and last-known addresses of these at-risk organizations, along with guidance about how to come back into compliance. The organizations on the list have return due dates between May 17 and Oct. 15, 2010, but the IRS has no record that they filed the required returns for any of the past three years.

“We are doing everything we can to help organizations comply with the law and keep their valuable tax exemption,” IRS Commissioner Doug Shulman said. “So if you do not have your filings up to date, now’s the time to take action and get back on track.”

It’s simple people. If your gross receipts are under $25,000, get yourself a 990-N (e-Postcard), fill it out and you’re done. If you have receipts up to $500k, you’ll have to fill out either Form 990 or 990-EZ which will probably take you all of 15 minutes.

Get it? No more blowing this off. OCTOBER 15TH is the drop dead date. After that, Shulman & Co. will be busting down the doors to inform you that you’re no longer tax exempt. And trust us, you don’t want to deal with that.

IRS Offers One-Time Special Filing Relief Program for Small Charities; Oct. 15 Due Date to Preserve Tax-Exempt Status [IRS]

What Would the Nonprofit Sector and Community Solutions Act Accomplish?

Representative Betty McCollum is upset that small businesses have the Small Business Administration but nonprofits don’t get a Nonprofit Administration to evaluate, build and monitor the capacity of America’s vital nonprofits. She believes nonprofits are an invisible but vital part to the economy and overlooked by Washington, DC except when it comes to tax issues.

She writes in the Hill:

This legislation represents a significant step toward creating a more effective partnership between the federal government and the nonprofit sector. H.R. 5533 establishes a new United States Council on the Nonprofit Sector. The Council will be a forum for leaders of nonprofits, foundations, businesses and government to discuss strategies for strengthening the nonprofit sector. The bill also creates an Inter-agency Working Group on the Nonprofit Sector. This group will ensure that high-level representatives from cabinet agencies and other key agencies coordinate and improve federal policies pertaining to nonprofit organizations. Finally, the legislation directs Federal agencies to collect and publish better data on nonprofits AND to support research that will lead to smarter Federal policy.

The goals of the Nonprofit Sector and Community Solutions Act are to build a stronger nonprofit sector, craft smarter federal policy, and create more vibrant communities in every state across the country.

Listen, we love working groups as much as the next cube-dweller but haven’t yet seen a copy of the Bill so can’t say either way at this point. What we do know is that the nonprofit sector is large enough to be in need of some help beyond whatever pestering they get from our friends at the IRS.

According to a 2009 Congressional Research Service report, nonprofits (mostly charities) make up over 5% of U.S. GDP. Charitable organizations are estimated to employ more than 7% of the U.S. workforce, while the broader nonprofit sector is estimated to employ 10% of the U.S. workforce. In 2009, nonprofits filing form 990s with the IRS reported approximately $1.4 billion in revenue and nearly $2.6 billion in assets.

Those numbers do not include the estimated 215,000 charities who have neglected (or completely blown off) their 990 responsibilities.

Update: Ms McCollum’s office was kind enough to get in touch and provide us with more information and a direct link to the Bill. We look forward to seeing how this works out.

Jury Awards $30 Million to Nonprofits That Alleged Fraud Against Wells Fargo

The Minneapolis Foundation, the Minnesota Medical Foundation, the Robins Kaplan Miller & Ciresi Foundation for Children and the Minnesota Workers’ Compensation Reinsurance Association have won $29.9 million from Wells Fargo in a Minnesota case that alleged investment fraud and breach of fiduciary duty based on investments the non-profits made that were deemed safe by Wells Fargo.


While similar cases against banks have mostly been settled out of court, this is the first time one such case has gone to trial.

Though the non-profits lost $14.1 million to these shoddy investments, Wells Fargo attorney Robert Weinstine blamed it on the financial crisis and insisted it was not Wells’ fault that funds were lost. The 10-member jury felt otherwise based on internal memos, e-mails and handwritten notes admitted as evidence in the trial.

The jury determined last Thursday that the bank would not be subject to additional payments for punitive damages. Attorney for the four non-profits Mike Ciresi had requested $100 million. Mathlete and Wells Fargo attorney Larry Hofmann told jurors that “zero is the correct number here” in terms of punies.

New Healthcare Tax Credit Should Help Small Businesses, Nonprofits

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

The Internal Revenue Service recently released some information to help companies take advantage of a tax credit provided by the health reform law.

The IRS estimates that about 4 million businesses qualify, and is sending out notices to as many as possible advising them of the tax break. If you haven’t received anything but believe your company may qualify, here’s what you should know:


The credit is available to companies with fewer than 25 employees with average wages of $50,000 or less. The full credit goes to companies with 10 or fewer employees and average annual wages of $25,000 or less. It is not available to self-employed individuals.

The credit covers 35 percent of an employer’s contribution to employee health premiums, so long as that doesn’t exceed 35 percent of the average cost of a health plan in the small group market. For a tax-exempt organization, the credit is 25 percent. Once the health exchanges are set up, the credit increases to 50 percent for businesses and 35 percent for nonprofits. At that time, the credit will only be available to companies purchasing insurance through the exchange.

A company can use the credit to reduce income tax owed and can carry the credit forward 20 years or back one year after 2010. Nonprofits can use the credit against withholding and Medicare taxes owed on behalf of their employees.

A key caveat is that employers must pay for half of the premium. For most workers, especially low-wage employees, a company that does not pay for at least half the premium is offering insurance that is essentially unaffordable. Even 50 percent is most likely not enough to do low-wage workers much good, especially at small companies where health care premiums are more expensive.

The amount of the credit is based on the premiums an employer pays for, so the more generous the coverage, the greater the credit. While premiums paid for owners and their families cannot be counted, those paid for seasonal workers can be. And the IRS has defined “premiums” broadly: not only does it cover premiums for standard medical insurance but it also applies to dental, long-term care and vision insurance-though again, an employer must pay 50 percent of each premium to count it toward the credit.

Calculating the credit probably requires any small employer to consult an accountant to see if the benefits are worth the cost of providing insurance. The tax credit is in effect, allowing employers who are already thinking about health insurance for their employees to factor in the savings as they plan ahead.

As an observer, I think the key issue is whether the credit is enough to offset the rising cost of health insurance. Those costs have hit small employers the hardest. We’ll see if the tax credit makes a difference in reversing the trend among small employers of dropping health insurance for their employees altogether.

IRS Asked to Crack Down on Church’s ‘Troubling Tweets’

You house of worship types are probably used to hearing politically toned sermons coming from your clergy(wo)man but a nonprofit holy house flat out telling its congregation, “Get out there and vote for [candidate soon-to-be caught up in a lurid sex scandal]!” would be venturing into some tricky waters.

Well, the Americans United for Separation of Church and State seems to have caught wind of a church who ventured. The AU claims that the Oasis Church in Los Angeles was openly supporting its Director of Social Justice’s, Alex Jones-Moreno run for reelection to the Greater Wilshire Neighborhood City Council on its website and on Twitter:


Americans United was not amused by this, sending a complaint to the IRS and putting out a press release:

“Oasis Church’s appeals might have been innovative, but they still violate the law,” said the Rev. Barry W. Lynn, executive director of Americans United. “Federal law bars churches and other tax-exempt non-profits from electioneering. The IRS should crack down on these troubling tweets.”

We called the IRS in Los Angeles, who was not aware of the story and we were told the usual yarn of “we can’t comment on individual tax cases,” which we were expecting but the IRS PR folks are always nice people and we like a pleasant voice every now and again.

Anyhoo, we did stumble across the IRS Tax Guide for Churches and Religious Organizations, that says the following on page 5 (our bolding):

Churches and religious organizations, like many other charitable organizations, qualify for exemption from federal income tax under IRC section 501(c)(3) and are generally eligible to receive tax-deductible contributions. To qualify for tax-exempt status, such an organization must meet the following requirements (covered in greater detail throughout this publication):

• the organization must be organized and operated exclusively for religious, educational, scientific, or other
charitable purposes,
• net earnings may not inure to the benefit of any private individual or shareholder,
• no substantial part of its activity may be attempting to influence legislation,
the organization may not intervene in political campaigns, and
• the organization’s purposes and activities may not
be illegal or violate fundamental public policy.

Now whether Tweeting = “intervene” we’re not sure but Americans United certainly seems to think so. We’d invite any tax-exempt experts to weigh in.

A message left at Mr Jones-Moreno’s Oasis office was not immediately returned.

Americans United Asks IRS to Investigate Los Angeles Church That ‘Tweeted’ Candidate to Victory [AU]

The IRS Outreach to Nonprofits Didn’t Go So Hot

“The IRS has conducted an unprecedented outreach effort in the tax-exempt sector on the 2006 law’s new filing requirements, but many of these smaller organizations are just now learning of the May 17 deadline.”

~ Doug Shulman, IRS Commissioner

When a Tax Time Bomb Goes Off: Repurcussions Await Some Small Nonprofits

At the end of the day on Monday, May 17, hundreds of thousands of little tax-exempt organizations will to turn into taxable little pumpkins. Under a provision of the Pension Protection Act of 2006, tax-exempt organizations that had been small enough to fall below IRS filing thresholds were required to start filing information reports. The law automatically revokes the exempt status of organizations that fail to file for three straight years. The deadline for that third year is May 17 for calendar-year filers.

Of course many of these organizations are inactive or defunct, but many aren’t. That means thousands of volunteer garden club, school parent organization and social club volunteer treasurers will unwittingly find themselves in charge of filing tax returns for their newly-taxable little corporations.


If you are an exempt organization treasurer or board member, you should find out right now whether your organization has filed. If your organization normally takes in less than $25,000 per year, the filing is a very simple on-line process, mostly just asking for identifying information. Bigger outfits will have to file a version of Form 990. If you need extra time, you can get a three-month extension on Form 8868. Some organizations, mostly governments and religious entities, are exempt from the filing and revocation rules.

But what will happen when these outfits lose their exempt status? They can ask for it back retroactively by filing Form 1023 or Form 1024 and paying a fee from $250 to $800. But many of these outfits will have no idea that they have lost their exempt status. What happens to them?

Most will become taxable C corporations or, in some cases, a taxable trust – depending on how they are set up. They will have income – for example, from contributions or dues – and they will be subject to normal Form 1120 filing requirements. If they fail to file, the normal kind and gentle penalties will accrue. Nobody really knows what the IRS will do about all of these little unwitting scofflaws.

And for what? Senator Charles Grassley explained back when the bill was passed in 2006:

The pension bill includes a good package of charitable giving incentives and loophole closers. It makes sense to tighten areas of abuse while increasing incentives for charitable giving. Americans are very generous with their donations. They deserve to know that their money helps the needy, not the greedy. Some individuals are creative about exploiting non-profits’ tax-exempt status for personal gain, and Congress has to be just as smart about shutting down abuse.

So take that, you greedy, abusive volunteer booster club treasurers! @ChuckGrassley has your number.

Cuomo: Espada’s Looting of Nonprofit ‘Reprehensible’

In the largest nonprofit fraud case we’ve ever seen, State Senator Pedro Espada, Jr is getting it from NY Attorney General Andrew Cuomo for perpetrating a $14 million scam using his non-profit as an ATM. Ouch.

Soundview Comprehensive Community Development Corp., a Bronx-based health care non-profit, appears to be little more than a vehicle for Espada’s extravagant lifestyle and Cuomo doesn’t find any of it to be entertainment.


“Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the State Senate Majority Leader makes it especially reprehensible,” Cuomo said in a statement.

Espada’s charity allegedly paid $100,000 for campaign literature, $80,000 on meals for Espada (including $20,000 for sushi – one of JDA’s weaknesses but hey, at least I pay for my own), vacations for the family and $2,500 a month for a co-op rental in the Bronx in which Espada supposedly lives. Double ouch.

If you’re into that sort of thing, you can check out the summons from the AG’s office here.

To date, Cuomo’s complaint is merely a civil one but he has left the door wide open for criminal charges against Espada and 19 others, including family members installed on the charity’s board. Taking a page from the Crazy Eddie fraud handbook, I see.

Espada also allegedly used the nonprofit’s corporate credit card to cover up to $450,000 in expenses that he’s now admitted may have been personal. Snicker snicker, everyone knows the corporate card should only be used for personal expenses if one is trying to fund an affair and hoping the wife doesn’t find out. Duh.

Because being a nonprofit looting Senate majority leader is hard work, Espada took the first 14 weeks of the year off and charged the paid leave to – you guessed it – Soundview. Since its board is packed with friends and family, they approved a $75,000 payout for personal expenses associated with this respite in a lump-sum payment at the beginning of the year.

Espada has responded by claiming Cuomo’s accusations amount to little more than a “witch hunt” meant to advance the AG’s political career. Whatevs.

Meanwhile, Espada’s Senate homies are praying for him. For $14 million bucks, he needs all the Hail Marys he can get, especially since the FBI and IRS raided the clinic this morning. Good luck with that.

Why Lazy Accounting Does Not Work for Churches (Or Anyone for That Matter)

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Just because you’re a church doesn’t mean you shouldn’t have a remedial understanding of payroll, GAAP, taxable income, and right/wrong.

Anthony and Harriet Jinwright, husband and wife pastors from Charlotte-based Greater Salem City of Good church, were warned repeatedly that their lazy accounting could get them in trouble, including by a former consultant in 2001.


Some issues brought up by the consultant include (but aited to and are, of course, alleged violations at this point):

• Church donations going directly to Pastor Jinwright but not subsequently appearing on his tax forms

• Blatant violation of the sanctity of GAAP.

• Expense reimbursements to Pastor Jinwright without benefit of receipts nor an expense plan at the church.

• Mismatched deposit envelopes that did not contain the actual amounts reflected on the outside when deposited.

For the love of sweet baby Jesus, what sort of operation were they running over there?!

It appears to be one part run-of-the-mill scam, one part complicated church theft, although Jinwright refused to acknowledge that any of this could be considered suspicious or, worse, fraudulent. The couple deposited $7 million into their bank account from 2002 to 2007 while only reporting $3.3 million for the tax returns for those years.

The US District Court thinks otherwise and “can I get a witness?” has just taken on a whole new meaning as Jinwright’s former assistant and business administrator – as well as the former consultant – have appeared on the witness stand to discuss Greater Salem’s, uh, holier-than-thou accounting tricks:

Anthony Jinwright was not only pastor of Greater Salem Church but also chairman of the church’s board or directors, with sway over the “business and financial dealings of the church.”

Although the church paid the bishop a regular salary, which it reported on his regular W-2 form, Greater Salem also cut checks directly to the bishop and his wife for: vehicle and housing allowances, retirement income, “tax liabilities,” personal vacation and travel, their daughter’s college tuition and at least two types of bonuses – a bonus at Christmas and a “pastoral anniversary” every February.

Both the Jinwrights also collected separate fees for speaking at other churches around the country.

Now listen, I’m sure Jesus wanted little baby Jinwright to go to college but the problem is that the meeting minutes that supposedly contain an authorization from church board members to pay for said college education have, um, disappeared. Funny, didn’t that happen at Arthur Andersen when Enron blew up?

What’s the lesson here? Churches are no less responsible for their financial affairs than publicly-traded companies and in many ways should operate with greater transparency as they are not only partially-funded by members of the congregation but supposedly on some sort of divine mission.

Do you really want to have to explain to the Almighty why you faked his financials at the pearly gates? Didn’t think so.

Jinwrights: Did they hide millions? Or miss details? [Carolina Weekly]
Other Holy Men:
Former Pastor Figures Eighth Commandment Is Overrated, Steals from Nonprofit