Steve Boersma, Ph.D., CFO
Every Organization, including churches and other faith-based entities, are generally incorporated within their state and have received special exemptions from the Internal Revenue Service (IRS) and their state that allow them to operate without having to pay income tax on their annual earnings. Being recognized as a tax exempt organization however, is a special privilege that has been granted to charities by law. Consequently, it is one that can be taken away if the responsibilities that go along with that privilege are not fulfilled or the organization otherwise violates the rules of accountability that govern their operation.
Ensuring compliance is the responsibility of all who serve at the organization. This is especially true of the members of the organization's board of directors and corporate officers, as they are the ones who will be held accountable by the IRS and others if failure occur. And they generally set the tone within the organization for how things will operate. So setting an example and ensuring that others with the organization are conducting themselves appropriately is an important responsibility.
Fundamentally the compliance obligations of a nonprofit can be condensed into the following four components:...Read More