 |
 |
 |
 |
 |
 |
 |
Archives
2008 Issue 1
 |
|
New Lobbying Disclosure Act Filing Requirements Take Effect IRS Announces Inflation-Adjusted Rates for 2008 IRS Issues Guidance on Unrelated Business Income New Lobbying Disclosure Act Filing Requirements Take Effect As a reminder, 2008 marks the implementation of the new filing and reporting requirements under the Lobbying Disclosure Act (LDA), as amended by the Honest Leadership and Open Government Act of 2007. (See Nonprofit Navigator October 2007 Special Alert). Under the new law, organizations employing registered lobbyists must report quarterly rather than semiannually, and all forms required by the LDA must be filed electronically. The electronic filing system allows you to file a single form simultaneously with both the Clerk of the House of Representatives and the Secretary of the Senate. The new registration form (LD-1) is currently available for lobbyists and organizations registering after January 1, 2008, and the new quarterly report form (LD-2) will be available beginning March 3 for the first quarterly filing due on April 20. Also required is semiannual reporting of certain contributions by lobbyists and their employers using the new form LD-203, which will be released in the near future. Forms and instructions can be found on the website of the Clerk of the House of Representatives. Harmon Curran will soon be holding a breakfast briefing on the new ethics rules as they relate to lobbyists and nonprofit organizations. Stay tuned for further details. By Christine Tschiderer  IRS Announces Inflation-Adjusted Rates for 2008 Recently, the IRS announced new inflation-adjusted rates for the 2008 tax year, which will be of interest to individuals and nonprofit corporations. Low Cost Article The unrelated business income of certain exempt organizations does not include proceeds from the distribution of "low cost articles" related to charitable solicitations (such as mugs or key chains imprinted with the organization's logo). For the 2008 tax year, the value of a "low cost article" is $9.10 or less. 2007: $8.90 2008: $9.10 Other Insubstantial Benefits In Revenue Procedure 90-12, the IRS provided guidelines for charitable organizations on the amount deductible from contributions made by contributors who receive something in return for their payments. The original guidelines stated that the value of benefits received by a donor in return for a fully deductible charitable contribution may be disregarded under one of two circumstances:
2007: $8.90/$44.50/$89.00 2008: $9.10/$45.50/$91.00 Mileage Effective January 1, 2008, the mileage rate for business use of a vehicle increases to 50.5 cents per mile from the 48.5 cents per mile rate for 2007. However, the mileage rate for medical use of a vehicle decreases: the new rate is 19 cents per mile, down from 20 cents per mile in 2007. The standard mileage deduction rate for volunteer or charitable use of a vehicle remains at 14 cents per mile, as set by Congress. 2007: 48.5 ¢/mile 2008: 50.5 ¢/mile Reporting Exemption for Lobbying Expenditures In 1998, the IRS issued Revenue Procedure 98-19, which established the amount of annual dues that section 501(c)(4) social welfare organizations and 501(c)(5) agricultural and horticultural organizations may receive from a person, family, or entity without being subject to the reporting requirements under section 6033(e) of the Internal Revenue Code. Section 6033(e) requires a tax exempt organization incurring non-deductible lobbying expenditures to notify its members of the organization's reasonable estimate of the portion of dues allocable to lobbying expenditures. Such notification must occur at the time that the dues are assessed or paid. The 2008 annual dues limitation for the reporting exception for organizations with non-deductible lobbying expenses is $97 or less. 2007: $95 2008: $97 Member Dues For the 2008 tax year, dues paid by members to 501(c)(5) agricultural or horticultural organizations and 501(c)(6) organizations will not be subject to unrelated business income tax even if the organization provides benefits and privileges to its members, provided the dues are less than $139. 2007: $136 2008: $139 Annual Exclusion for Gifts As was the case in 2007, the first $12,000 of gifts to any person - aside from gifts of future interests in property - will not be included in the total amount of taxable gifts made during the 2008 tax year for gift tax reporting purposes. 2007: $12,000 2008: $12,000 Itemized Deductions The income threshold for the overall limitation on itemized deductions will increase from $156,400 in 2007 to $159,950 in 2008 for married individuals filing a joint return. On separate returns for married individuals, the income threshold will be $79,975, up from $78,200 in 2007. The allowable amount of deductions is reduced for taxpayers with adjusted gross income above that amount. 2007: $156,400 2008: $159,950 Retirement Plan Limits The limit on the maximum annual benefit under a defined benefit plan will increase from $180,000 in 2007 to $185,000 for 2008. The limit on the maximum permissible allocation under a defined contribution plan likewise increases from $45,000 to $46,000. The maximum amount of annual compensation that can be taken into account for those under a qualified plan also increases in 2008 to $230,000 (from $225,000 in 2007). A "highly compensated employee" now is someone who is compensated $105,000 or more per year. The maximum amount of elective contributions a person can make to their retirement plan remains $15,500. The maximum amount of "catch-up contributions" remains $5,000. By Sara Tosdal IRS Issues Guidance on Unrelated Business Income The Internal Revenue Service recently released revised Publication 598, Tax on Unrelated Business Income of Exempt Organizations, offering enhanced guidance as to which activities of exempt organizations may generate taxable income. Unrelated business income is income an organization receives from a trade or business that it regularly carries on and that is not substantially related to carrying out its exempt purposes. While the IRS insists that it will focus on all of the facts and circumstances in a particular case to determine whether any unrelated business income has been generated, Publication 598 presents a host of examples that provide insight into IRS logic. Also provided are explanations of which organizations are subject to the tax and special exclusions and deductions that may apply. The publication also notes that 501(c)(3) organizations whose gross income from an unrelated business totals $1,000 or more must make their annual exempt organization unrelated business income tax returns (Form 990-T) publicly available. By Christine Tschiderer This publication is designed to provide accurate and authoritative information about the subject matter covered. It is not distributed with the intent to render legal, accounting, or other professional advice. The services of a competent professional should be sought if legal advice or other expert assistance is required. Newsletter Home | HarmonCurran Home | |