Aug 25 2014

The Auditors Are Here!

Jul 21 2014

A Passion to Serve

May 26 2014

The Big 3 Accounting Services--Part Two: Reviews

Written by Cynthia A. Cox, CPA

 

The second of the three major types of assurance services that you might encounter in the world of church and non-profit organizations is called a review. My previous blog was about compilations, the most basic service provided by a CPA firm. Which of these would benefit your organization most? The answer depends primarily on expectations by granting agencies or creditors, the volume of your financial activity or the complexity of your organization itself. Each engagement requires a different amount of work by the accounting firm. Fees for reviews will be higher than for a compilation because of the increased time that a review takes over the compiled financial statements.

Read more: The Big 3 Accounting Services--Part Two: Reviews

May 07 2014

The Nondiscrimination Form

Written by Cynthia A. Cox, CPA

The IRS deadline for filing the document commonly known as “The Nondiscrimination Form” is fast approaching. It is always due five months after the organization’s fiscal year end. So for organizations that have a calendar fiscal year your form is due May 15!

The official name of the document is the “Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax” (Form 5578). So if you are a tax-exempt organization (church or other religious organization) that operates, controls or supervises a private school, you are required to file this document every year. Form 5578 requires your organization to adhere to several requirements assuring compliance. Let me explain more fully.

Read more: The Nondiscrimination Form

Apr 29 2014

The Big 3 Accounting Services--Part One: Compilations

Written by Cynthia A. Cox, CPA

There are three major types of assurance services that accounting firms can offer churches and non-profit organizations: compilations, reviews and audits. The best type of engagement for your nonprofit depends on your need for the financial statements, expectations of third parties such as granting agencies or creditors, the volume of your financial activity or the complexity of the your organization itself. Each engagement requires a different amount of work by the accounting firm resulting

Read more: The Big 3 Accounting Services--Part One: Compilations

Apr 15 2014

Clergy Housing Exclusion - An Update

Written by Cynthia A. Cox, CPA

It was a deafening gavel that banged tremors throughout the religious communities in the United States. Last November, a federal judge in Wisconsin sided with an organization called the Freedom From Religion Foundation (FFRF) that filed a lawsuit against the IRS code that excludes clergy from taxes on housing costs received from the church she or he serves. The atheist leaders of FFRF claimed in the lawsuit that the practice violates the freedom from religion clause.

Read more: Clergy Housing Exclusion - An Update

Mar 31 2014

An Internal Audit of Social Media

Written by Cynthia A. Cox CPA

Upon reading the title of this blog you might have thought, “What does social media have to do with accounting principles or financial management?” I thought the same thing—until I began expanding into the use of social media marketing for my company. I just want to share these thoughts so that you can take action to make sure social media does not compromise the fiduciary integrity of your non-profit or church.

Read more: An Internal Audit of Social Media

Mar 31 2014

Safeguarding Church Donations

Written by Cynthia A. Cox CPA

“It’s hard to believe that someone would steal from a church.”

That thought is not uncommon and it’s probably one of the reasons that theft actually happens. When church leaders, ordained and lay, can’t imagine someone stealing from the church, they are likely not to implement financial safeguards and processes that remove the opportunities for theft.

Last month, an employee of Lakewood Church in Houston, Texas reported to police that the offering for one weekend’s services was missing. More than $600,000, donations collected during Saturday and Sunday services in an early March weekend, was stolen from a safe. In 2004, the Episcopal Diocese of Texas discovered that its treasurer had embezzled more than $600,000 from its coffers. A few years before that the treasurer of national office of The Episcopal Church of the United States made off with $2 million before getting caught. So, do you think that there might a $20 bill here or 10-spot there that occasionally does not get counted and used for ministry?

Read more: Safeguarding Church Donations

Feb 22 2014

Self-Dealing Transactions

Written by Cynthia A. Cox CPA

Here’s an all-too-frequent scenario in nonprofit organizations that places the organization at risk to be assessed excise tax payments by the IRS. A board member of an Organization purchases land adjacent to the nonprofit knowing that the it is looking to either purchase or lease adjacent properties. The board member then leases the property to the Organization for fair market value. The lease is voted on by the full board and everyone is aware of the lease cost. The board would have paid any other potential owner the same amount because it was reasonable. The board was also fully aware that the property was owned by one of its own members. By entering into this lease agreement the board has just compromised its tax-free status and could be assessed an excise tax for this arrangement.

Read more: Self-Dealing Transactions

Jul 25 2013

The IRS Scandal What It Means to You

Written by Cynthia A. Cox CPA

Many non-profit organizations are understandably shaken and disturbed by the revelations coming out of the current scandal at the Internal Revenue Service. The IRS has been accused of using its power to prevent or delay ideologically conservative non-profit organizations from securing their tax-exempt status. Whether the reason for the delay is politically motivated or not, what lessons can we learn from the alleged abuse of power by the IRS?

First, it is critical that all non-profits stay current with the required governmental filings. These filings include everything from Form 1023 filed at inception to payroll tax reports and Forms 990 that are filed annually. Not all non-profits have the same filing requirements, but all of them have at least one filing requirement. Consult with a CPA experienced in non-profit taxation to ensure your organization knows exactly what it is required to file. If you are a church, you do not have to file a 990.

Read more: The IRS Scandal What It Means to You