August NFP Updates
Completion of the Data Collection Form on the Federal Audit Clearinghouse (FAC) Internet Data Entry System (IDES) System
The FAC has noted that when auditees are preparing their data collection form submissions on the FAC IDES, they should not utilize Google Chrome. The FAC has noted that certain issues are encountered only when using Google Chrome. Another browser should be utilized when working with the IDES system.
The Grant Reporting Efficiency and Agreements Transparency (GREAT) Act was Issued
On Dec. 30, 2019, the president signed the GREAT Act into law. Its main purpose is to modernize federal grant reporting by standardizing the information recipients of federal grants and cooperative agreements submit to federal agencies. The effect on how audits are summarized and reported to the FAC by both auditees and auditors in the future remains to be seen. The act’s provisions are being incorporated into the proposed revisions to the Uniform Guidance.
Private Foundation Excise Tax Rate Change
The Taxpayer Certainty and Disaster Relief Act of 2019 (the 2019 Act) changed the long-standing two-tiered excise tax regime applicable to net investment income (NII) of certain private foundations. Prior to the change, private foundations paid excise tax on its NII either at 1% or 2%, depending in part on the amount of qualifying distributions that were made during a year. The 2019 Act fixes that rate at 1.39%. This change is expected to increase the tax paid by some private foundations and decrease the amount paid by others. However, the administrative burden of calculating the tax will likely be reduced by most affected private foundations. This change is effective for tax years beginning after Dec. 20, 2019.
Paper Forms 990-T & 4720
In 2020, the IRS will continue to accept paper forms. These include Form 990-T, Exempt Organization Business Income Tax Return and Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the IRC. The IRS plans to have these returns ready for e-filing in 2021 (reporting on tax year 2020).
Form 8872 – Tax-Exempt Political Organizations
The IRS will no longer accept paper Forms 8872 for tax periods after 2019. Form 8872, reporting information for periods starting on or after January 2020, will be due electronically by Section 527 organizations. These include political parties, political action committees and campaign committees of candidates for federal, state or local office.