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Federal, state and local authorities have indicted dozens of people and businesses in the U.S. and India accused of impersonating Internal Revenue Service employees demanding money from innocent taxpayers in the U.S.

Related: Follow our Fraud & Scam blogs

As a business owner, you're entering into transactions potentially on a daily basis. Suppose you enter into a transaction with someone, hurrying to get the deal closed as you're set to rake it in. It comes around to December, and your accountant is preparing a projection of what your tax liability will likely be for the year.

Then you get a call that you're going to owe a boat load of money to the government for that transaction you failed to consult with your accountant about beforehand. What do you do now?

The November 15th deadline for non-profit organizations is quickly approaching. This is the final due date for calendar year non-profit organizations that have taken advantage of the two extensions already available to them. This includes organizations that are required to file Form 990, Form 990EZ and the online filing of Form 990N. (Keep in mind that the 990N is only required to be filed electronically once every three years to maintain tax-exempt status).

Does your nonprofit organization and its donors understand the IRS requirements surrounding charitable donations?

A nonprofit organization that does not understand the details of the IRS requirements, is not able to effectively communicate to donors, or provide donors with accurate and appropriate documentation, can risk alienating donors.  In addition, an organization could potentially miss an opportunity to increase donor giving levels and on the flip side, could be exposed to monetary penalties. 

To promote charitable giving, the IRS allows for tax deductions for contributions of cash or other monetary and non-monetary gifts as long as certain recordkeeping requirements are met.  

Folks can generally only deduct charitable donations to qualified organizations, such as places of worship and nonprofit organizations/hospitals (i.e., Colleges,  United Way, Girl Scouts).  If you're not sure that the organization you plan on making a donation to qualifies, ask them, or you can check the following website: (www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check).  Keep in mind that you cannot obtain a charitable donation deduction for contributions to individuals, or for the value of your time or services provided to an organization.

Once you've determined that the organization is qualified, you need to make sure that you're going to obtain a tax benefit by making the donation.  If you don't itemize your deductions (file a Schedule A), you will not have the ability to deduct the amount donated.  Also, you cannot (generally) deduct charitable contributions that exceed 50% of your Adjusted Gross Income ("A.G.I.").  Finally, if you’re A.G.I. is above a certain threshold (in 2016, $311,300 if you file jointly, $259,400 if you file as a single taxpayer),  your total charitable contributions, as well as your other itemized deductions (i.e., real estate taxes, mortgage interest) may be limited.

Let’s take a look:

Monetary gifts (cash, checks, payroll deductions, stock gifts, etc.)

To validate a deduction taken for a charitable contribution of any amount, the taxpayer (the one claiming the deduction on their tax return) must have:

• A bank record or a written communication from the charity displaying the name of the organization
• The amount of the contribution and,
• The date of the contribution.

Often, such contributions are made through payroll deductions to or facilitated by organizations such as the United Way.  In these instances, the taxpayer must maintain a pay stub or Form W-2.  The taxpayer may also furnish another employer-generated document that details the amount(s) withheld for payment to the charitable organization, along with a pledge card filled in by or at the direction of the donee charitable organization.  These basic documentation rules apply to all gifts unless a gift individually exceeds $250.

Read more from Chris Valponi

Additional requirements for gifts of $250 or more state that the taxpayer must obtain:

• A written acknowledgement of the contribution from the donee organization that stipulates the amount of cash and a description of any property other than cash contributed
• The taxpayer must obtain a statement whether the organization provided any goods or services in consideration for the contribution
• A description and good faith estimate of the value of any goods or services provided in consideration for the contribution

Keep in mind that for payroll deductions, the IRS states that the contribution amount withheld from each paycheck to a taxpayer is treated as a separate contribution for purposes of applying the $250 threshold.  To illustrate, 15 payroll deductions of $20 each, totaling $300 over the course of the year would not be considered to meet the additional requirements threshold of $250. 

Did you know that small businesses that fail to file their annual retirement plan returns can face hefty fines of up to $15,000 per return? Our tax team has helped small businesses plan and prepare their annual plan returns. 

Fortunately, the Internal Revenue Service recognizes that some businesses may not even realize that this requirement applies to them. As a result, a tax penalty relief program allows them to pay $500 per return for late filings, up to a maximum of $1,500. The relief is aimed at small businesses whose plans cover a 100% owner or partners in a business partnership, and their spouses.

The U.S. Department of Labor also has a relief program for businesses that have employees. If you’re not sure whether the requirements—or the relief programs—apply to you, be sure to contact us. We can offer advice on how to remain in compliance with critical regulations and minimize your tax outlays. 

 Background--direct and indirect (60-day) rollovers

September 30 marks another key date on the calendar regarding action needed to properly manage your own or an inherited IRA.  

If a loved one has passed, the final determination of who the “designated beneficiaries” of a that individual's IRA are must be completed by September 30 of the year following that person's death.

Related read: Important Considerations for Non-Spouse Beneficiaries

This determination is required for purposes of calculating the Required Minimum Distributions ("RMD") from a decedent’s IRA. A “designated beneficiary,” (a term defined in the Internal Revenue Code) is one who is set to receive IRA assets when the account owner dies and to any trusts that may list specific requirements.
 

Confronting the latest scheme to target taxpayers, the IRS and its Security Summit partners warned (on September 22, 2016) that scammers have sent fake emails purportedly containing CP2000 notices, which are used in the IRS’s Automated Underreporter Program.

Read more about IRS Scams by Howard Kass

The IRS emphasized that it never sends these notices by email, and instead uses the U.S. Postal Service (IR-2016-123).