/
January 14, 2018 FEDERAL TAX AND INFORMATION REPORTING FOR TAX EXEMPT ORGANIZATIONS CONDUCTING January 14, 2018 FEDERAL TAX AND INFORMATION REPORTING FOR TAX EXEMPT ORGANIZATIONS CONDUCTING

January 14, 2018 FEDERAL TAX AND INFORMATION REPORTING FOR TAX EXEMPT ORGANIZATIONS CONDUCTING - PowerPoint Presentation

olivia-moreira
olivia-moreira . @olivia-moreira
Follow
353 views
Uploaded On 2018-09-18

January 14, 2018 FEDERAL TAX AND INFORMATION REPORTING FOR TAX EXEMPT ORGANIZATIONS CONDUCTING - PPT Presentation

November 1415 2012 2 GAMING EXEMPT ORGANIZATIONS TaxExempt Status What You Need to Know Impact of gaming on taxexempt status Gaming and unrelated business income Internal Controls amp Recordkeeping ID: 670119

gaming exempt tax organizations exempt gaming organizations tax amp income 501 gov irs purpose form bingo organization information 990

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "January 14, 2018 FEDERAL TAX AND INFORMA..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

January 14, 2018

FEDERAL TAX AND INFORMATION REPORTING FOR TAX EXEMPT ORGANIZATIONS CONDUCTING GAMING

November 14-15, 2012Slide2

2

GAMING | EXEMPT ORGANIZATIONS

Tax-Exempt Status

What You Need to Know :

Impact of gaming on tax-exempt status

Gaming and unrelated business income

Internal Controls & Recordkeeping

Workers conducting gaming

Reporting winnings & withholding

Gaming excise taxes

Read Pub. 3079Slide3

3

GAMING | EXEMPT ORGANIZATIONS

Organizations Participating in Gaming

Important to know the different rules that apply:

501(c)(3) organizations operated exclusively for charitable purposes

501(c)(4) social welfare organizations

501(c)(7) social clubs

501(c)(8) & (10) fraternal organizations

501(c)(19) veterans’ organizations

Slide4

4

GAMING | EXEMPT ORGANIZATIONS

501(c)(3) Organizations

Largest category of tax-exempt organizations

Common misconception: If proceeds are used for charitable purposes, gaming is charitable

Actual

conduct

of activity, not the proceeds must further and exempt purpose

Gaming does NOT further an exempt purpose

If gaming is substantial activity, may jeopardize exempt status

May not have a substantial non-exempt purposeSlide5

5

GAMING | EXEMPT ORGANIZATIONS

Bingo and “Pull Tabs” Example

Example:

Organization formed to give grants

to schools

Uses management company for operate Bingo/Pull tabs rather than volunteers

Bulk of profits goes to management company

Only a few small grants went to schools

Result: Jeopardizes exemption, possible revocation

Substantial non-exempt purpose

Possible Inurement and private benefitSlide6

6

GAMING | EXEMPT ORGANIZATIONS

Fraternal & Veterans Organizations

Exempt function includes providing social and recreational activities for members & guests

If restricted to regular members: it furthers an exempt purpose

If open to the general public, income earned from non-members will be UBI (Pub 3079, pg 12)

If a large enough percentage of the organization’s overall income is from non-member income, the organization may jeopardize its exempt status (Pub 3079, pg 7 & 12)Slide7

7

GAMING | EXEMPT ORGANIZATIONS

Unrelated Business Income

Exempt organizations (including churches) are liable for tax on income unrelated to exempt purpose: UBI

Must be:

Regularly carried on

Trade or business

Not substantially related to exempt purpose

File 990-T, Exempt Organization Business Income Tax Return if gross income from UBI

$1,000

Gaming may be UBI unless certain

exceptions applySlide8

8

GAMING | EXEMPT ORGANIZATIONS

Bingo & Volunteer Exceptions

Bingo exception

Must have wagers placed, winners determined, and prizes, etc. distributed in presence of all placing wagers

Pull tabs don’t qualify: winners not determined in presence of others placing wagers

Casino Nights

May not be subject to UBI if volunteer exception applies

State regulations may apply

Pub. 598, Tax on Unrelated Business Income of Exempt OrganizationsSlide9

9

GAMING | EXEMPT ORGANIZATIONS

Internal Controls & Recordkeeping

Oversight Responsibility

Supervise conduct of operation

Choosing location

Reviewing and approving leases

Officer involvement in conducting

gaming

operations

Separate and segregate workers’ duties to maximize internal controlsSlide10

10

GAMING | EXEMPT ORGANIZATIONS

Bingo Operations: Internal Controls

Game manager/operator has control, prepares “Daily Sheet”

Cashier receives cash, records serial numbers of games sold

Separate controllers

prepare inventory & paid out receipts

review daily sheets

Board review for consistency of reportsSlide11

11

GAMING | EXEMPT ORGANIZATIONS

Information Reporting Requirement

Form 990, Return of Organization Exempt from Income Tax – information return

Public inspection requirements

Adoption of form by state agencies

Form 990, 990-EZ, 990-N: Depends on size

and financial activity

High non-filer rate among veterans, fraternals

Coordination with state gaming regulators to

detect non-filers

Non-filers risk penalties, automatic revocation

for failure to file 3 consecutive years

Schedule G required if gross receipts from

gaming > $15,000Slide12

12

GAMING | EXEMPT ORGANIZATIONS

Employment Tax Responsibilities

Payment of employment taxes required if workers are employees

Employer responsibilities for employees

Form W-2 to employee and SSA

Form 941, Employer’s Quarterly

Federal Tax Return

File Form 940, Employer’s Annual Federal Unemployment (FUTA) --- except 501(c)(3)s

Employees v. Independent Contractors

1099- MISC for independent contractors

$600 threshold for calendar yearSlide13

13

GAMING | EXEMPT ORGANIZATIONS

Payments to Winners

Form W-2G, Certain Gambling Winnings

Requirement varies based on type of gaming activity and prize

Bingo: Prize

$1200

Pull-tabs: Prize

$600 and 300 times wager

Slots: Prize is

$1,200Slide14

14

GAMING | EXEMPT ORGANIZATIONS

Gaming Excise Taxes

Excise taxes on amount of wager

Occupational tax on persons engaged in receiving wagers

Properly operated 501(c)(3)s would generally not be subject to tax

Properly operated fraternal/veterans’ organization may be subject to taxSlide15

15

GAMING | EXEMPT ORGANIZATIONS

For More Information

Charities and Nonprofits page

For forms, publications, general information:

www.irs.gov/charities

Web-Based Training Program

For 501(c)(3) organizations:

StayExempt.irs.gov

Outreach Event Requests

tege.eo.ceo@irs.gov

General Questions

Account issues only:

1-877-829-5500 (toll free)Slide16

16

GAMING | EXEMPT ORGANIZATIONS

To reach our

Charities and Nonprofits

page, go to IRS.gov and click

“Information for…”

then select

Charities & Nonprofits.Slide17

17

GAMING | EXEMPT ORGANIZATIONS

Find publications, webinars, FAQs and much more on this page.Slide18

18

GAMING | EXEMPT ORGANIZATIONS

Educational activities are specially designed for the EO community. Slide19

19

GAMING | EXEMPT ORGANIZATIONS

IRS Video Portal

irsvideos.govSlide20

20

GAMING | EXEMPT ORGANIZATIONS

2012 EO Workshops/Live Events

Find a workshop in your area. Events go on year round

.

Specialized speaker request?

Send an email to

tege.eo.ceo@irs.gov

Minimum of 100 people or 75 organizations - if travel is required

Requests must come from a nonprofit entity or government entitySlide21

21

GAMING | EXEMPT ORGANIZATIONS

Register for the

EO UPDATE

!

It’s

FREE

and it keeps you up to date with what’s happening in EO.Slide22

22

GAMING | EXEMPT ORGANIZATIONS

Check out EO’s new on-line exempt org search tool

.

It’s updated monthly!Slide23

23

GAMING | EXEMPT ORGANIZATIONS

StayExempt.irs.gov

This is one of the best ways to learn what every exempt organization should know.Slide24

24

GAMING | EXEMPT ORGANIZATIONS

StayExempt.irs.gov

StayExempt includes 21 online courses.Slide25

25

GAMING | EXEMPT ORGANIZATIONS

EO’s Life Cycle website is important to all non-profit entities.Slide26

26

GAMING | EXEMPT ORGANIZATIONSSlide27

27

GAMING | EXEMPT ORGANIZATIONS

The A-Z Site Index is one of our most helpful pages