Chisholm Law Provides Insights to Help Nonprofits Smoothly Navigate Year-End IRS Compliance Reporting
Chisholm Law offers nonprofits tips to navigate year-end IRS compliance, focusing on Form 990 filings, donor acknowledgments, and governance documentation. Founder Audrey Chisholm emphasizes proactive preparation to ensure accuracy and transparency, supporting nonprofits in maintaining tax-exempt status and focusing on their missions.
Orlando, FL, December 04, 2024 --(PR.com)-- As 2024 quickly draws to a close, nonprofits all over the country are preparing to meet IRS compliance requirements to maintain their tax-exempt status. Chisholm Law, Orlando’s premier nonprofit law firm serving the needs of charitable organizations in all 50 states, offers exclusive insights to help these orgs navigate the compliance season with confidence.
“Nonprofits work tirelessly to fulfill their missions, and compliance is a key element of that success,” said Audrey K. Chisholm, Founder and Managing Attorney at Chisholm Law. “We want to help make their work easier by helping them stay informed and proactive during year-end reporting. Our goal is to support nonprofits in understanding and meeting their obligations so they can stay focused on making a difference.”
Key Deadlines and Common Pitfalls
For nonprofits whose fiscal year aligns with the calendar year, December is the time for wrapping up annual reports, preparing for upcoming filings, and ensuring IRS compliance. This involves not only gathering the year’s financial and operational data but also thoroughly reviewing all activities to confirm they meet IRS standards for tax-exempt organizations.
Some areas to start with include:
Form 990 Filings: The IRS requires nonprofits to submit Form 990, 990-EZ, or 990-N depending on their size and revenue. This annual return provides a comprehensive report of your organization’s finances, governance practices, and programmatic activities. For nonprofits on a calendar year, the filing deadline is May 15 of the following year, but preparing your data in December ensures accurate reporting and avoids last-minute issues.
Donor Acknowledgments: To comply with IRS regulations, nonprofits must provide proper acknowledgment letters for donations of $250 or more. December is an ideal time to review and ensure all donor contributions for the year are documented accurately. These acknowledgments support both donor tax deductions and your organization’s transparency and integrity.
Board Meeting Minutes and Governance Documentation: Governance practices play a large role in nonprofit compliance, and the IRS places a strong emphasis on transparency and good governance. As part of Form 990, nonprofits are required to disclose board meeting minutes, decisions, and significant events. Finalizing these records in December ensures that all necessary documentation is complete and available for IRS review.
Financial Statements and Annual Reports: Many nonprofits also use December to finalize financial statements, which offer a complete look at their fiscal health and help verify data required for Form 990. Preparing an annual report detailing accomplishments, goals, and financials not only helps with compliance but also serves as a valuable tool for donor relations and transparency.
“We recommend starting your annual reporting process early in December to ensure you have enough time to verify data accuracy, fix discrepancies, and complete the information needed for Form 990 and other reports,” Chisholm said. “It’s also a good idea to reach out to a nonprofit attorney or accountant to review their compliance checklist and governance documents, identifying any gaps that may expose your organization to IRS scrutiny.”
Best Practices to Simplify Year-End Reporting
To simplify year-end reporting, nonprofits can adopt several best practices now and in the coming months to ensure accuracy, meet deadlines, and minimize stress.
Organize Your Records: Set up an organization system that tracks financial and programmatic data throughout the year. Consistent record-keeping reduces last-minute rushes and allows for thorough reviews and adjustments.
Establish a Compliance Calendar: Create a compliance calendar that highlights key reporting deadlines, such as Form 990 filing dates, state registration renewals, and grant reporting deadlines. Also create a checklist specifically for Form 990 that includes all required sections, such as financial summaries, program descriptions, and governance information.
Use a Centralized Record-Keeping System: Centralized, digital record-keeping systems make it easy to track financial data, donor information, and governance documents. Software solutions specifically designed for nonprofits can help organize this information and reduce errors, making it easier to retrieve necessary documents at the end of the year.
Reconcile Financial Data Regularly: Regularly reconcile financial records, including bank statements, grants, and other revenue sources, with the accounting system to ensure data accuracy and prevent last-minute errors.
Set a Timeline for Year-End Closeout: Create an internal timeline to complete year-end closeout tasks well before filing deadlines that includes finalizing financial records, preparing Form 990 data, and securing board approval for required documents, ensuring ample time for thorough review.
For more information about year-end compliance or to schedule a consultation, visit chisholmfirm.com or call (407) 536-5358.
About Chisholm Law
Chisholm Law is an Orlando-based law firm dedicated to supporting nonprofit organizations across the United States. With a focus on nonprofit formation, compliance, and governance, Chisholm Law provides comprehensive legal guidance tailored to the unique needs of tax-exempt organizations. Founded by attorney Audrey K. Chisholm, the firm is committed to helping nonprofits navigate complex legal requirements and maintain compliance with IRS regulations, empowering them to focus on their mission and impact. Chisholm Law is known for its knowledgeable and client-focused approach, offering strategic solutions that support organizations in every stage of their nonprofit journey. For more information, visit www.chisholmfirm.com.
“Nonprofits work tirelessly to fulfill their missions, and compliance is a key element of that success,” said Audrey K. Chisholm, Founder and Managing Attorney at Chisholm Law. “We want to help make their work easier by helping them stay informed and proactive during year-end reporting. Our goal is to support nonprofits in understanding and meeting their obligations so they can stay focused on making a difference.”
Key Deadlines and Common Pitfalls
For nonprofits whose fiscal year aligns with the calendar year, December is the time for wrapping up annual reports, preparing for upcoming filings, and ensuring IRS compliance. This involves not only gathering the year’s financial and operational data but also thoroughly reviewing all activities to confirm they meet IRS standards for tax-exempt organizations.
Some areas to start with include:
Form 990 Filings: The IRS requires nonprofits to submit Form 990, 990-EZ, or 990-N depending on their size and revenue. This annual return provides a comprehensive report of your organization’s finances, governance practices, and programmatic activities. For nonprofits on a calendar year, the filing deadline is May 15 of the following year, but preparing your data in December ensures accurate reporting and avoids last-minute issues.
Donor Acknowledgments: To comply with IRS regulations, nonprofits must provide proper acknowledgment letters for donations of $250 or more. December is an ideal time to review and ensure all donor contributions for the year are documented accurately. These acknowledgments support both donor tax deductions and your organization’s transparency and integrity.
Board Meeting Minutes and Governance Documentation: Governance practices play a large role in nonprofit compliance, and the IRS places a strong emphasis on transparency and good governance. As part of Form 990, nonprofits are required to disclose board meeting minutes, decisions, and significant events. Finalizing these records in December ensures that all necessary documentation is complete and available for IRS review.
Financial Statements and Annual Reports: Many nonprofits also use December to finalize financial statements, which offer a complete look at their fiscal health and help verify data required for Form 990. Preparing an annual report detailing accomplishments, goals, and financials not only helps with compliance but also serves as a valuable tool for donor relations and transparency.
“We recommend starting your annual reporting process early in December to ensure you have enough time to verify data accuracy, fix discrepancies, and complete the information needed for Form 990 and other reports,” Chisholm said. “It’s also a good idea to reach out to a nonprofit attorney or accountant to review their compliance checklist and governance documents, identifying any gaps that may expose your organization to IRS scrutiny.”
Best Practices to Simplify Year-End Reporting
To simplify year-end reporting, nonprofits can adopt several best practices now and in the coming months to ensure accuracy, meet deadlines, and minimize stress.
Organize Your Records: Set up an organization system that tracks financial and programmatic data throughout the year. Consistent record-keeping reduces last-minute rushes and allows for thorough reviews and adjustments.
Establish a Compliance Calendar: Create a compliance calendar that highlights key reporting deadlines, such as Form 990 filing dates, state registration renewals, and grant reporting deadlines. Also create a checklist specifically for Form 990 that includes all required sections, such as financial summaries, program descriptions, and governance information.
Use a Centralized Record-Keeping System: Centralized, digital record-keeping systems make it easy to track financial data, donor information, and governance documents. Software solutions specifically designed for nonprofits can help organize this information and reduce errors, making it easier to retrieve necessary documents at the end of the year.
Reconcile Financial Data Regularly: Regularly reconcile financial records, including bank statements, grants, and other revenue sources, with the accounting system to ensure data accuracy and prevent last-minute errors.
Set a Timeline for Year-End Closeout: Create an internal timeline to complete year-end closeout tasks well before filing deadlines that includes finalizing financial records, preparing Form 990 data, and securing board approval for required documents, ensuring ample time for thorough review.
For more information about year-end compliance or to schedule a consultation, visit chisholmfirm.com or call (407) 536-5358.
About Chisholm Law
Chisholm Law is an Orlando-based law firm dedicated to supporting nonprofit organizations across the United States. With a focus on nonprofit formation, compliance, and governance, Chisholm Law provides comprehensive legal guidance tailored to the unique needs of tax-exempt organizations. Founded by attorney Audrey K. Chisholm, the firm is committed to helping nonprofits navigate complex legal requirements and maintain compliance with IRS regulations, empowering them to focus on their mission and impact. Chisholm Law is known for its knowledgeable and client-focused approach, offering strategic solutions that support organizations in every stage of their nonprofit journey. For more information, visit www.chisholmfirm.com.
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Chisholm Law Firm
Jenna Rasche
(407) 536-5358
Jenna Rasche
(407) 536-5358
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