Recipients of Paycheck Protection Program (PPP) loans of $50,000 or less will be able to apply for forgiveness using a simplified application that was released October 9, 2020 by Treasury and the U.S. Small Business Administration (SBA).
Under the IFR, PPP borrowers of $50,000 or less are exempted from any reductions in forgiveness based on:
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The US Small Business Administration and Treasury published guidance Tuesday answering 23 frequently asked questions related to the forgiveness of loans issued under the Paycheck Protection Program. Access it here.
*These documents should be kept in a very safe place, like a safety deposit box.
A woman used her own money to care for feral cats that she fostered in her home for a pet-related charity, paying for vet bills, food and other items. She incurred her expenses while providing volunteer services to a tax-exempt organization and the tax court agreed with this position. However, to deduct payments of $250 or more, one must have a contemporaneous acknowledgment from the charity in writing. Since the woman did not have any such statement from the tax-exempt organization for her large expenses, she could not deduct those costs. (Van Dusen, 136 TC No.25)
Use IRS Select Check to determine that organizations to which you make contributions are eligible to receive tax-deductible charitable contributions (Publication 78 data). Users may rely on this list in determining deductibility of contributions
Most nonprofit organizations rely heavily on the volunteers that donate time to help carry out their missions. Some contributed services are required to be recognized in the financial statements if they meet certain criteria outlined in professional standards. A contribution should be recorded if the contributed services either (a) create or enhance nonfinancial assets, or (b) require specialized skills, are provided by entities or individuals possessing those skills, and would typically be purchased if they were not donated. Assuming the criteria are met such services are generally measured at fair value.
Audits take considerable time and effort, but they provide nonprofits with fair assessments of their financial health, in addition to revealing vulnerabilities such as weak internal controls, insufficient cash reserves and poor investment policies. And although the IRS Form 990 doesn’t mandate audited financial statements, the IRS does ask organizations to discuss their audit activities, as well as the role their board plays in them.