Monthly Archives: August 2016

4 Simple Steps to State Registration Compliance

Welcome to Simple Charity Registration, a do-it-yourself, form-fill software developed by nonprofit and IT professionals to make it easy and affordable for charities to comply with state charitable solicitation registrations.

If you’re watching this, you likely know that most states require that charities register with them in order to be able to solicit funds in their state. This requires initial and annual filings that have different deadlines and requirements.

Our mission is to bring affordable automation of the state charity registration process to all US nonprofits so that they can refocus human and financial resources on accomplishing their missions.

What can Simple Charity Registration do for your organization?

We can save you hundreds of hours of work through 4 steps which streamlines the individual state registration process by answering core questions that are asked on every application and a handful of state specific questions all the while auto populating all the forms for you.

Simply 4 Steps

First our Compliance Wizard will help you determine which states that your organization is required to register in, which you many need to renew your registration and where your organization may be exempt.

Next, you will begin the questionnaire process which includes questions about your organization, its people and some of the people you do business with.

You continue the process by filling in any state specifics and some financial questions from your own Form 990.

Lastly you print and review your organizations forms and attachments, sign and send them to the state.

The end product is auto-filled forms with the required addenda, a checklist of attachments and filing instructions.

Simple Reminders

An added benefit of our software is you will receive email reminders with the state specific deadlines hopefully saving you from any nasty late fees and keeping your organization compliant.

Simple Resources

Along with the state forms we provide updated instructions and state resources pages with links to regulations and contact information.  We also offer an informative blog with industry news, information on upcoming conferences & webinars and anything else that we think you might find helpful to your organizations mission.

Simple Next Year

Finally, we make it even easier next year so that the only thing that you will need to do is review the prior year’s information, make necessary changes to your data, print and file.

We’ve been in your position with the confusion and frustration of filing state charitable solicitation registrations. So here is our answer to help your nonprofit remain transparent and in compliance so that you can continue your valuable work.

Simple Right?

Let’s Get Started!! Your first state is free and after that, you can choose to pay as you go with the individual state form packages for $50 each or purchase the “All States Package” for $900 which includes the forms for all 39 states. Both packages do contain the forms necessary for each individual state including forms for extensions, exemptions, registrations, renewals, annual filings and in some cases financial statements.

Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegstration.com.

 

Non-profit Charity Registration Renewal and Annual Reporting

Welcome to SimpleCharityRegistration.com.

One thing our customers ask is “What is the Difference Between Registration Renewal and Annual Reporting?”

There are many terms that are used seemingly interchangeably, but do have different meanings. Two of these terms are ‘Registration Renewal’ and ‘Annual Reporting’. What they have in common is that both have to do with maintaining a charitable organization’s solicitation filing with a particular state in the years following initial registration. What they mean for the amount of filing can be very different.

Almost every state that requires charitable solicitation registration requires some type of annual reporting. Essentially, this reporting is thought of in two elements: the updating, or renewal, of the information contained in solicitation registration and yearly financial reporting, or annual report. The distinction becomes important for organizations that file in more than one state because they have to organize which state is expecting what forms and when.

While most states require both types of submission, some, like Illinois, require only annual financial reporting with no registration renewal. Others can make a more complicated distinction, which often involves whether or not they offer deadline extensions. Since accurate financial documentation is subject to when an organization files with the IRS, some states will offer extensions on the annual report, while marking firm deadlines for the registration renewal. Maryland’s renewal due date is six months from the charity’s fiscal year end, but they allow extensions on annual reporting that coincide with the extensions offered on the 990 by the IRS.

Still yet, Tennessee and others make it a bit easier and offer extensions on the filing of both elements. It is important for non-profit organizations to understand the requirements of the individual states’ charitable solicitation processes. This is particularly true for nonprofits required to file in multiple states. Resources such as Simple Charity Registration can help your organization manage deadlines, access state requirements, and streamline the process. Sign in and get started today!!

As always, please contact us with any comments, questions or concerns at (800)780-6027 or email us at Support@SimpleCharityRegistration.com.

 

Non-profit Registration Compensation and Your Organizations Key Employees

Welcome to SimpleCharityregistration.com.

In 2008, the IRS expanded the reporting requirements for nonprofit compensation, particularly of key personnel. The new rules added a process by which executive compensation is determined, added reporting to include compensation that results from related organizations, and gives a monetary and responsibility threshold for defining “key employees.” Although this is not new information, it is still confusing for new and continuing organizations alike. For instance, you may be asking yourself, “What is a ‘key employee?’”

A “key employee” is one who fits all three of the following criteria:

$150,000 Test - The employee receives reportable compensation from the organization and all related organizations in excess of $150,000 for the calendar year ending with or within the organization’s tax year.

Responsibility Test- At any time during the calendar year ending with or within the organization’s tax year the employee must: Have responsibilities, powers, or influence over the organization as a whole that is similar to those of officers, directors, or trustees; Manage a discrete segment or activity of the organization that represents 10% or more of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole; or have or share authority to control or determine 10% or more of the organization’s capital expenditures, operating budget, or compensation for employees.

Top 20 Test- The employee is one of the 20 employees other than officers, directors, and trustees who satisfy the $150,000 Test and Responsibility Test with the highest reportable compensation from the organization and related organizations for the calendar year ending with or within the organization’s tax year.

For further reference, see Part VII of the IRS 990 Instructions. Also, Guidestar publishes many informative blogs on IRS reporting requirements. And, of course, Simple Charity Registration is also always here to help.

As always please contact us with any comments, questions or concerns at (800)780-6027 or Support@SimpleCharityRegistration.com.

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6 Facts About Minnesota’s New Charitable Solicitation Registration Forms

Important news for charities registered to do charitable solicitation in Minnesota! The Charities Division of the Minnesota Attorney General’s Office has just issued new charitable solicitation registration forms. Instead of the combined Registration and Annual Report form, they have separated the forms into two. Charities using the federal fiscal year who have received extensions will need to use the new Minnesota Annual Report forms due on August 15.

We talked with the Charities Division about some of the changes and pointers they would like to give charities registering in their state. First up are the changes.

  • Filing method: The Charities Division now offers email filing in addition to paper filing. Send your registration or annual report plus attachments to charity.registration@ag.state.mn.us in batches no larger than 25 MB and with your organization’s name as subject line. If you send more than 1 email in your batch, end the subject line with the number email of the total (e.g., 1 of 3).
  • Note: The Charities Division has no preference about whether filing is done by email or paper.
  • Payment can also be made online or by sending a check. Be sure to include your organization’s name and EIN with whatever method you choose.
    • Financial information: There are different criteria for adding your charity’s financial information in Section B of the forms. For Registration, if you file an IRS Form 990, 990-EZ, or 990-PF, you do not need to complete Section B as long as you attach your IRS Form. For Annual Reporting you can only skip Section B if you file and attach the IRS Form 990.
  • Compensation: The old form had categories of “Compensation,” “Benefits,” and “Other Compensation,” but the new forms have narrowed those to “Compensation” and “Other Compensation.” “Compensation” in this case is equal to the W-2 Form, Block 5, and anything outside of that would be “Other Compensation.”

Now, the Charities Division wants you to be careful about the following, as they are often overlooked.

    • Section B: IRS Form 990-EZ and 990-PF filers need to complete Section B on the Annual Report, including the Statement of Functional Expenses. See above for a summary of the requirements or read the form as to whether you need to complete Section B. The most common mistake organizations make is not completing it when they are required to.
      • In addition, on the Statement of Functional Expenses the Totals column A needs to match columns B+C+D, and line 25 should match Form 990-EZ line 17.
  • Two signatures and a Board Resolution are required.
  • Extensions are easy to get online.

You can find the new forms, make them into pdfs to mail along with all attachments at Simple Charity Registration, where our DIY form-fill software makes compliance with state charitable solicitation registration simple and affordable.

Need More Time?? File an Extension – IRS Form 8868

Welcome to SimpleCharityRegistration.com.

Many people do not know the difference between the First and Second IRS Form 8868 Extensions for Nonprofit Organizations. Today, we will explain them.

First Extension Request

The first extension request for the IRS Form 990, 990-EZ or the 990-PF is granted “automatically.” This means you don’t have to give a reason for needing the extension nor will it require a signature. If the Form 8868 Application for Extension of Time to File an Exempt Organization Return is completed properly and filed on time, which would be May 15th for the calendar year filer, the extension will automatically be granted and your Form 990 due date will automatically be extended to August 15th. This extension request, in many cases, can be forwarded along with the state charity registration extension requirements to the proper state charity registration office for an extension of time in submitting your renewal or annual financial requirements.

Second Extension Request

The second 3-month extension request is not “automatic” and your organization may only request a second 3- month extension if the first extension was properly filed and accepted by filing the Form 8868. When requesting an additional three month extension a detailed explanation is required and it must be signed by an authority. Also, your organization should file it well before the extended due date in the case your request for the extension of time is rejected by the IRS. If approved, the second extension will then be November 15th. No further extensions are allowed and if either of these dates falls on a weekend or federal holiday the due date will become the following day.

Sign in or create an account with SimpleCharityRegistration.com to see if any of these extensions apply to the state where your organization’s charity registration is due.

As always please contact us with any comments, questions or concerns at (800)780-6027 or Support@SimpleCharityRegistration.com.

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Time to Renew Your Non-profit Solicitation Registration – Be Prepared

Welcome to SimpleCharityRegistration.com.

If your organization is like most nonprofits, you are anxiously waiting to see whether you will have your IRS reporting ready on time or if you will be filing an extension from the IRS. This also means you are paying attention to all the different state charity registration deadlines to figure out how to get them done on time.

Here are a few things that you check on and update to avoid last-minute registration headaches:

  1. Lists of directors, officers, executives — did you have changes to personnel, title, salary, benefits, roles? Are all the state-specific questions answered? Remember, different parts of your organization may need to be involved in compiling info.
  2. Lists and registration of professional fundraisers — many states want you to document changes to fundraisers, compensation, states solicited in, the fundraisers’ registration, etc. You may need to confirm these things with the fundraisers.
  3. Organizational information such as changes to address, branches, tax exempt status, etc.
  4. Deadlines — keep track of when renewals are due to the various states.
  5. Anticipate extension needs/get extensions in, including extensions for your IRS filings.
  6. Related party/related organization info — find out if you have any new or amended relationships since you last filed in a state.
  7. Legal questions — you may need to poll your employees, directors, etc. for their personal answers to the many state-specific legal questions.

Simple Charity Registration can help you with all of that and help you to prepare extension requests and forms before your financials are done so that you are armed and ready once you have them.

As always please contact us with any comments, questions or concerns at (800)780-6027 or Support@SimpleCharityRegistration.com.

Thanks for watching!

Non-profit Corporate Registration and the Model Business Corporation Act

Welcome to Simple Charity Registration. com.

We frequently get questions regarding corporate or business registration in states by charities who find it confusing and frustrating that they might have another required form of state registration on top of the charitable solicitation registration our site services. We decided to provide an overview of the topic.

What are Corporate Registration and Qualification to do business?

Many people refer to registering a corporation in a state as corporate or business registration. That is the process which “domestic corporations,” or those originating in the state and operating within the laws of the state, need to go through. For foreign corporations, or those originating in another state, that sounds fairly unnecessary. The real term and purpose for foreign corporations, however, is “qualifying to do business” in a state. Very self-explanatory. It would seem reasonable that a state would need to know about a business making money from its residents. How do states define qualification to do business?

Generally, states have developed their business rules on the Model Business Corporation Act which differentiates between those domestic and foreign corporations we just discussed. Since business entities must follow the rules of the states in which they are created, domestic corporations have requirements to register their organizing documents, governing documents, and keep them updated annually along with financial reporting. As with most of these rules, this increases the accountability and transparency of businesses operating within the state.

Foreign corporations are subject to separate rules since they are already regulated by their home state. As such, states only want detailed reporting if the foreign corporation “transacts business” in their state. While no state gives an absolute definition of transacting business, the Model Business Corporation Act lists several examples of activities that are not included. Among these are third party business functions like:

  • banking or legal activity
  • interstate commerce (vs. intrastate commerce)
  • one-time transactions that are completed within 30 days and not reproduced by other similar transactions
  • sales where the oversight of the sale is done out of state

To be sure, an organization that performs services in a state, has an office or other presence in a state, or has employees in a state does come under the definition of transacting business in that state and would need to qualify.

What knowledge should you take from this video? All states have some sort of corporate registration and qualification to do business. Some are more stringent than others and all need to be taken seriously because there are large penalties for non-compliance. To stay in compliance, do your homework and consult attorneys if needed. It all matters.

In the coming days we will go deeper into some of the questions that result from these processes to give you some background as you look into whether you need to qualify to do business in states other than your own.

As always please contact us with any comments, questions or concerns at (800)780-6027 or Support@SimpleCharityRegistration.com.

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Non-profit or Tax Exempt??

Welcome to SimpleCharityRegistration.com.

What is the difference between a nonprofit and being tax exempt?

Tax exemption on the federal level is a designation given by the IRS that basically just says that “if you are providing a community service and not paying a profit to yourself or investors, then you shouldn’t have to pay taxes on the money that you have brought in.” Also, “After you provide the proper documentation the IRS will allow your donors the ability to take the monies that they give you as a deduction on their income taxes.” A nonprofit is how you are designating how your business will be structured on the state level which could include any of the following: Unincorporated Association, Nonprofit Corporation, Charitable Trust, or in some cases an LLC.

You may be asking,
“Why do I have to register my nonprofit if I am tax exempt?”

The simple answer is that you are letting the state know that you will be doing business within its boundaries and how you will be conducting that business. Registering your nonprofit with the correct state authorities can be a two step process. The first part is registering with the state that you will be conducting business either as a domestic or foreign entity and how it is structured.

Secondly, you must register with the proper agency where you will be asking their citizens for donations/contributions to fund your organization and what services you will be providing for those funds you will be collecting. These two processes also give the citizens of that state a trusted local authority to confirm if your organization and the money that you are asking them for is being used as you say it will be because the paperwork that you file with the state about your organization as a nonprofit will be available for them to review.

As always please contact us with any comments, questions or concerns at (800)780-6027 or Support@SimpleCharityRegistration.com.

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Non-profit Solicitation Registration and Renewal – Penalties

Welcome to SimpleCharityRegitration.com. A common question that our customers ask about state charitable solicitation registration is “What are the penalties for noncompliance?”

States have created charitable solicitation registration in order to provide their residents transparent information about the charities that solicit within their state. They take these rules seriously and expect compliance usually prior to solicitation or within 30 days of the start of solicitation. We picked 4 states for which we could find clear information about penalties to illustrate the types of penalties that exist. Generally, the penalties are steep fines with additional possible consequences for the organization.

Minnesota states that failure to comply may be a violation of Minnesota law and as such can result in “civil penalties, attorney’s fees, [and] costs.” Failure to file annual reports puts an organization in default in Minnesota so that they cannot solicit again until they are up to date on all filings, have paid a $50 fee, and file a new registration.

In New York, there are two overlapping categories of registration — one for soliciting from New York State residents (7-A), and the other for doing business in New York State (EPTL) — that are filed on the same forms. Monetary penalties for failing to register under 7-A are $1000 per violation and up to $100 per day of noncompliance. For EPTL it is up to $10 per day with a $1,000 max. Penalties are combined for those organizations subject to both rules.

Washington State code penalizes non-filers after five days’ notice by publishing a press release on internet and newspapers of a notice of the charity’s unregistered status. Knowingly giving false information in your filing is punishable as a misdemeanor under RCW Title 9A Chapter 20. In Pennsylvania, the registration instructions specify that registration is due within 30 days of the start of solicitation. Late fees are $25 per month or part of month and cannot be waived.

One issue that comes up is whether you are calling attention to your organization if you begin to register when you have not in the past and should have. Bear in mind that these are state regulations and that they carry that weight. Compliance is critical. States want you to comply. Pennsylvania adds in their description of late fees that “organizations electing to voluntarily register are not subject to late fees.” Regardless of penalties, you should file where required.

Penalties grow steeper for willful violations of the law. Also, when you file, your information must be accurate. The biggest penalties are reserved for those who knowingly file incorrect or incomplete information because accurate information protects states and their residents from fraud. The bottom line is that charities need to know what the state registration requirements are, how they apply to their organization, and how to follow them. There are consequences for not doing so.

Please note, this information is not intended as legal advice. We recommend you consult your nonprofit’s legal adviser if you have questions on how fundraising regulations affect your nonprofit.

Please contact us with any comments, questions or concerns on our support line or email us.

Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegstration.com.

 

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