EO Tax Journal

1 – IRS to Honor Medical Resident FICA Refund Claims

2 – Accounting Developments Affecting Charities and 990 Reporting – Part 2
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I mentioned last Friday that I read obituaries. Louise McKnew died on February 23 from pneumonia at age 71. I hardly knew her. About all I knew about her was that she was a neighbor and that she was a member of the D.C. Bar. The only reason I knew she was a member of the D.C. Bar was because our Mensa mailman delivers all mail from the D.C. Bar to me, so I got Louise’s D.C. Bar mail and would give it to her.

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We’ll probably be able to wrap up transcripts of the January 22 EO Committee meeting this week. Today I have Part 2 of the panel on Foreign Activities and Withholding. Next out of the chute will be the panel on Accounting Developments Affecting Charities and 990 Reporting. We’ll complete our cavalcade of transcripts with the panel on Section 501(c)(7) Social Clubs. What an exciting way to start March!

In response to EO Tax Journal 2010-29, a retired EO agent sent along these comments:

“Back in 1975, when I signed on to EO, we really had a group of passionate revenue agents who took the time and made an effort to know and apply the law. Everyone was so committed to making the right decision and correctly interpreting the law — so what happened? IRS training for revenue agents went downhill as the senior agents retired and management thought EO audits were not worthwhile — no big dollar adjustments, a silly change/no change letter, and not so much as a warning about better behavior or else!

“But then, so it seems, IRS tried a different tack. We won’t audit EOs as much, but we will make the Form 990 more informative to the public. So now this document can be viewed by the public and everyone will have a clear idea of what the exempt organization does and where its money comes from and how it is spent. Oh my — as a member of various charitable/civic/community organizations I’m asked to assist in the preparation of the 990 as soon as they find out I am a former EO revenue agent. I had to laugh the first time I tried to get my arms around that return again after several years. It is so overly complicated for a smaller organization that just meets the filing requirement. Trying to categorize income and expenses according to the form was exhausting. And then when a small 501(c)(3) has to file Schedule A and B (I think that’s right) because they have one or two very generous donors, more drama. ‘Do I really have to put Mrs. X’s name down?’ And so it goes.
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