CCST 2007
description
Transcript of CCST 2007
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CCST 2007CCST 2007
The INs and OUTs of Filing The INs and OUTs of Filing
for for ExemptExempt Status Status
Presented byPresented by
Julie Fry, CPAJulie Fry, CPA
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Solution to 90/10 ChallengesSolution to 90/10 Challenges
• Do you have nightmares about your 90/10 ratio?
• Are you consistently worried about passing the test?
• The solution to your problem may be just around the corner!!
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Solution to 90/10 ChallengesSolution to 90/10 Challenges
• Current proposed legislation before Congress– Allowance of institutional scholarships in total
revenue calculation.
• What does this mean for your organization?– Set up 501(c)3 entity– Provide scholarships to worthy candidates– Add scholarship dollars when calculating total
revenue
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Solution to 90/10 ChallengesSolution to 90/10 Challenges
Student loans $ 9,500Student cash 500 Ratio = 95%
Total revenue $10,000 Failed
Student loans $ 7,000Student cash 500 Ratio = 70%Scholarships 2,500 Passed Total revenue $10,000
• How would this actually work?
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Non Profit’s - 101Non Profit’s - 101
• A brief history……– Private foundation vs. public charity– Unrelated business income – 1950’s– Intermediate Sanctions – mid 90’s
• IRC Section 4958– Annual filing/reporting requirements
• Form 990
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Filing for Exempt StatusFiling for Exempt Status
• The Process– Incorporate• Articles of Incorporation• Bylaws• Filing with State• SS-4
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Filing for Exempt StatusFiling for Exempt Status
• The Process– Form 1023• Mission/vision
statement• Scholarship program• Establish board of
directors• Financial
information/budgets
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Filing for Exempt StatusFiling for Exempt Status
• The Process– Form 1023• Narrative
description of activities• Form 2848• Itinerary• Advanced ruling
period
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Filing for Exempt StatusFiling for Exempt Status
• The Process– Form 1023• Relationship/common
control issues• Conflict of interest
policy• Fundraising• Political influence
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Filing for Exempt StatusFiling for Exempt Status
• How should scholarships be awarded?
– Non discriminatory fashion
– Awarded upon need and/or merit
– Available to an “open-ended” group, rather than “pre-selected” individuals
– Well documented procedure
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Filing for Exempt Status
• What are the costs involved in this process?
Attorney fees
Filing fees – State and Federal *
CPA fees *standard fixed fees
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Filing for Exempt StatusFiling for Exempt Status
• In conclusion, what are the benefits to your school?
– Can improve 90/10 ratio
– Awards worthy students scholarships– Marketing tool when recruiting new students
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Filing for Exempt StatusFiling for Exempt Status
• Questions