This quarterly newsletter provides recent updates and educational information important to Arizona STOs.

Due Date Reminders

November 15, 2013: Form 990, 990-EZ, or 990-N is due to be filed with the IRS for fiscal years ending June 30, 2013.

December 31, 2013: Audit or review and agreed-upon procedures reports are due to ADOR for FY 2013.

February 15, 2014:  Form 990 or 990-EZ due date for June 30, 2013 returns properly extended by November 15, 2013.

Annual AZ Charity Registration No Longer Mandatory

In past years, charities that solicited donations in Arizona were required to file annual registration statements with the Arizona Secretary of State. As of September 13, 2013, this filing is no longer required. In fact, the Secretary of State no longer accepts these filings. That's one less form for charitable organizations to keep track of! You can see additional information regarding the change here.  

The information is still being reported to the State in the form of your annual registration with the Arizona Corporation Commission.  Please remember that you will not receive a written reminder from the Corporation Commission to prepare this filing. However, you can now subscribe to receive email reminders for your Annual Report filing. To do so, use the Business Search Function on the ACC website. Once you've found your organization's record, you can click the button to subscribe to the Annual Report Email Reminder. Filing this report is an important part of ensuring the organization is in good status, which is a question on the agreed-upon procedures questionnaire for smaller STOs and should also be reviewed during the compliance portion of audits of larger STOs.

Draft 2013 Form 990 Released

The IRS has released a draft of the 2013 Form 990 and its instructions and there are several minor changes to note. The 2013 form is filed for years beginning January 1, 2013 or later. Changes of note include:
  • Accounting method changes must be reported by all organizations starting in 2013, not just those with audited financial statements.
  • Compensation paid to directors for non-director independent contract services to the organization and related organizations must be reported in the "Compensation of Officers" section.
  • However, compensation from a management company to an officer, director, or key employee is generally not reportable in this section.

Documentation for Donors

Your organization must keep in mind key IRS rules for providing donors proper documentation for charitable contributions claimed as deductions on their federal returns. The Tax Court recently ruled that having incomplete substantiation of donations when filing the tax return eliminates a deduction for the contributions.  A couple made regular gifts of $250 or more to their church and received an acknowledgment from the church for the contributions.  The parties agreed the acknowledgment was contemporaneous.  However, the acknowledgment failed to state that no goods or services were provided for the donations. 
After the IRS denied their deduction because of the faulty acknowledgment, they got a letter from the church saying they received no benefits from the contributions.  The documentation was too late.  To be contemporaneous it must be obtained before the earlier of the date the taxpayer files the return or the due date for filing, including extensions.  The deduction was properly denied by the Court because the donors did not have valid substantiation in hand before filing (Durden, TC Memo. 2012-140).
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