AFCEA International

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AFCEA International

• Chapter Accounting and Tax Update
• 23 June 2014
• CYBER Symposium

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WHATS NEW WITH TAXES? NOT TOO MUCH

• No changes in the tax codes relative to filing
  limits and types of returns
• Form 990-N (e-postcard) gross receipts under
  50k
• Form 990-EZ gross receipts under 200k and
  total assets under 500k
• Form 990 gross receipts over 200k or total
  assets greater than 500k
• No changes in filing timeline 15th day of the
  5th month following year-end
• 30 September year-end due NLT 15 February
• 31 December year-end due NLT 15 May
• Some reminders
• Dont file for 3 consecutive years you lose
  your tax exempt status
• Form 990 public document open to public
  inspection
• Late filing hefty penalties - 10,000 to
  50,000 File an extension
• IRS Publication 557 everything you want to know
  about Non-Profits

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Form 990-N (e-postcard) Form 990 N
(e-postcard) For small tax exempt organizations
where annual gross receipts are normally
50,000 or less. You need basic information
EIN, tax year, legal name and address, any other
names used by the organization, name and address
of the principal officer, web site (if
applicable), confirmation of gross receipts
normally 50,000 or less, confirmation that the
organization has not terminated operations.
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Form 990-EZ and Form 990
File the Form 990EZ when Gross receipts are
less than 200,000 and total assets are less than
500,000 File the Form 990 when Gross
receipts equal or exceed 200,000 or total assets
equal or exceed 500,000.
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Form 990-EZ and Form 990
Supporting Schedules when applicable
Schedule A Public Charity Status and Public
Support 501(c)(3) Schedule B Schedule of
Contributors - 501(c)(3) Schedule C
Political Campaign and Lobbying Activities
501(c)(6) Schedule D Supplemental Financial
Statements 501(c)(3) and (6) Schedule G
Supplemental Information Regarding Fundraising or
Gaming Activities
501(c)(3) Schedule I Grants and Other
Assistance to Organizations - 501(c)(3) and
(6) Schedule L Transactions with Interested
Persons - 501(c)(3) and (6) Schedule O
Supplemental Information 501(c)(3) and (6)
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When to file Form 990
The Form 990 (990, 990-EZ, 990-N) is due . by
the 15th day of the 5th month after the
organizations accounting period ends. If your
chapter operates on a calendar year, the return
is due by May 15th. If you operate on a fiscal
year end of September 30, the return is due
February 15th. If you cant complete the return
by that date, file for an extension. Use Form
8868 to request an automatic 3 month extension of
time to file. Failure to file Code Section
6652(c)(1)(A) gross receipts under 1M -
20/day or 5 of gross receipts up to
10,000 If gross receipts greater than 1M -
100/day up to 50,000
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Reinstatement of Tax Exempt Status

• Group exemption no longer an option you must
  re-apply as a single unit
• User Fee is 400 to 850 depending upon gross
  receipts
• Whats filed for reinstatement
• Form 1023 (chapter educational foundation) or
  Form 1024 (chapter)
• Prior three years tax returns
• Declarations and other supporting documentation
• User fee
• And then you wait 4, 6, 8 months
• A new Determination Letter is issued with a new
  effective date for tax-exempt status.
• There may be a taxable period between
  revocation and re-instatement
• Next step reestablish under the AFCEA Group
  Exemption Number

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ACCOUNTING OPERATIONS

• Each chapter and educational foundation is a
  separate and distinct legal entity. Therefore
• Separate bank accounts
• Separate financial reporting
• No commingling of funds
• When can the two meet in the middle?
• Intercompany transactions these are not common
• Internal Controls keeping the books clean
• Revenues deposited timely, intact, and in the
  proper account
• Disbursements by check, authorized by an
  approving officer
• Approval processes and procedures defined over
  finances, contract execution, operations, etc.
• Board oversight periodic finance reports to the
  Board
• Develop an Accounting and Finance Policy Manual

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Contract Review and Execution
AFCEA Governance, By-Laws,
Article XII, Section 5 No Chapter shall have
signatory authority to obligate AFCEA
International or the Chapter on any contractual
obligation in excess of 25,000. Any contract
with a value or expense in excess of 25,000 must
be reviewed and executed by AFCEA International
in a manner consistent with the AFCEA
International Bylaws and Policy.
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Contract Best Practices

• The contract must name the chapter as the
  executing party
• Review all terms and conditions
• Check deposit amounts for reasonableness and due
  dates
• Force Majeure provisions government
  cancellations
• Other termination provisions rebooking the
  event to avoid penalties
• Refunds of deposits or apply to future events
• Reward points / programs should be in the name
  of the chapter

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Contract Best Practices

• Management Services Agreements
• Be clear with the terms of the agreement
• Renewal Clause automatic? Long term?
• Terms defining a transition plan to a new service
  provider
• The Chapter cannot delegate or assign fiduciary
  or management decision making responsibilities to
  a third party
• Data and Intellectual Property web hosting,
  access to data, ownership of data, requests for
  information
• Provider cannot execute agreements for the
  chapter
• CPA Firms can be engaged for write up work,
  financial statement preparation and tax return
  preparation. The same terms apply to these
  agreements.

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The Bottom Line
Stating the obvious this is
complicated Your chapter board and your
treasurer are responsible for the tax filings and
the integrity of the financial operations,
internal controls, and financial reporting. The
IRS will work with you on tax issues but they are
also looking for compliance with the tax codes.
Non-profits are a target of opportunity for the
IRS. Your treasurer should have a financial
background in order to adequately perform the
duties and responsibilities of the position and
to report to the board. This includes ensuring
timely tax filings. Solicit a CPA for the board
many will volunteer their time and services.
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• QUESTIONS???
• Pat Miorin
• pmiorin_at_afcea.org
• 703-631-6166