Nonprofits

The Office of Management and Budget (OMB) has recently revised the Uniform Guidance, a set of rules governing how federal financial assistance is managed. These updates, effective October 1, 2024, aim to clarify existing guidelines, reduce administrative burdens, and enhance the efficiency and security of managing federal funds. There are several changes that those with a reporting obligation should consider reviewing as the updates will soon become effective.

The Corporate Transparency Act was passed in 2021 and became effective on January 1, 2024. The legislation aims to increase financial transparency and counter illicit financial activities, including money laundering and terrorist financing. To comply with the new regulations, many business owners are required to report Beneficial Ownership Information (BOI) to the Federal Crimes Enforcement Network (FinCEN). This includes personally identifiable information (PII) of each business owner, including taxpayer identification number, amongst other data points. The information is required to be submitted electronically on the FINCEN website.

For most charities and organizations, fundraising is an essential function that ensures funding is available to continue existing programs, create new ones, and pay operating expenses. Without this money, it would be tough to maintain the ability to fulfill the core mission. This underscores the importance of a vibrant fundraising strategy that highlights successes, articulates how programs meet goals and provides a clear picture of how funds are used. Since donors want to feel they have contributed to a worthwhile cause, it’s vital to demonstrate the value provided. Attention will be focused on what an organization says about itself and what others are saying.

The IRS announced last week (in IR-2023-169) a moratorium on processing new ERTC claims through the end of 2023. The reason for the change is the increase in the number of ineligible claims that are being filed. It appears many of these are coming from businesses that have been pressured and scammed by aggressive promoters and marketing firms. The agency will continue processing claims received prior to September 14th but cautions it will now take longer due to increased fraud concerns.

What happens when you take established legislation, build on it, reconcile 3 bills into one, and then add more than 100 provisions? You get the SECURE Act 2.0, a bill that passed by a vote of 414-5 that was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act of 2023. The overall goal of SECURE 2.0 is to make enrolling in retirement plans and saving for retirement more accessible than ever. While most of the changes impact plan participants, there are several updates and changes that will impact plan sponsors this year alone.

The golden years are a time when the days of the daily grind of the working world are left behind and a new chapter begins. It often means spending more time pursuing hobbies, time with family, or traveling. As lovely as it sounds, this reality may simply be out of reach for many. Most workers do not have enough saved to be able to support themselves, even when coupled with anticipated Social Security payments. According to the U.S. Bureau of Labor and Statistics, only 55% of workers participate in an employer-sponsored retirement plan. This alarming statistic prompted Congress to take action resulting in the passage of the SECURE Act in 2019. The legislation made it easier to save, expanded plan eligibility to part-time employees, and more.

The Employee Retention Tax Credit (ERTC) is one of the remaining federal tax incentives left over from the pandemic era. Although the program is no longer in effect, taxpayers can continue to file retroactive claims. This is certainly good news for eligible businesses that previously did not claim the savings. At the same time, it has also opened the door to unscrupulous ERTC mills and others falsely promising huge tax savings to unsuspecting business owners. The result has been a sharp increase in the number of fraudulent ERTC claims. In fact, the IRS has already identified over 11,000 fraudulent returns

Soon, the IRS will allow 403(b) retirement plans to use the same approval process as other qualified plans. Depending on a plan sponsor’s employer identification number, this process can start as soon as June 1, 2023. Though there are some exceptions, most 403(b) plans will qualify in the new guidance outlined in Revenue Procedure 2022-40. A determination letter confirms a plan is operating by relevant rules and regulations.  This is welcome news for many Atlanta not-for-profit organizations which previously were not permitted to make a request.

Despite the return to “normal,” many companies are still experiencing residual effects from the pandemic. While Georgia’s economy grew by 10% in March of this year, continuing supply chain issues and rising interest rates have put a damper on the encouraging news. This does not even consider the effects of the Great Resignation, which triggered a 25% increase in the number of resignations. When coupled with the concern about a looming recession, organizations need to leverage every savings opportunity available.

Even when most people do the right thing and safeguard the information or assets they’re entrusted with, all it takes is one person to make the wrong decision, and trouble ensues. This is an unfortunate reality that both businesses and organizations alike face every day. It is one thing when a bad decision is made by accident, it is quite another when it was done as part of a fraud scheme. Fraud is an ever-present threat that Atlanta area nonprofits need to routinely address. The damage which can arise from such incidents can be devastating and more than just financially – think of brand trust and image.