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Newsbits

IRS mandates e-filing

Beginning in 2006 for the 2005 tax year, tax-exempt organizations with total assets of $100 million or more that use paid preparers will be required to file Form 990 electronically. This e-filing requirement will be expanded in 2007 to include tax-exempt organizations with at least S10 million in total assets and private foundations and charitable trusts, regardless of their asset sizes. This new rule affects organizations that prepare their own returns, only if they meet the asset requirement and file at least 250 annual IRS returns - such as income, excise, information and employment tax forms (including Form W-2).

eBay is giving more to nonprofits

Online auction site eBay has made several changes that will further benefit not-for-profits. The company now donates all fees when a seller donates 100% of an item's final sale price to a certified nonprofit and has made it easier to list goods for charity.

With improved integration of eBay Giving Works into its Sell Your Item form, sellers are able to donate some or all of an item's final sale price to a not-for-profit using the standard eBay listing process. Additionally, when nonprofits list goods on their own behalf to raise funds, eBay also donates the selling fees. All Giving Works items are distinguished on the auction site, and buyers have additional ways to search for and find listings that benefit a cause.

Since 2000, eBay listings have raised more than $40 million for not-for-profits.

Revised 1023 form now in effect

As of May 1, 2005, organizations applying for exempt status must use revised Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. Form 1023, which was revised last October, has major changes including:

• You can no longer submit Form SS-4, Application for Employer Identification Number (EN), with the application for exemption. You must have an EIN before filing the 1023 form.
• Limited liability companies are now eligible to apply for tax-exempt status under Section 501(c)(3) of the tax code.
• Questions about compensation and other financial arrangements with officers, directors, trustees, highly compensated employees and highly compensated independent contractors have been added to Part V.
• Applicants now have to affirm that their organizations have adopted a conflict-of-interest policy.

You can obtain Form 1023 by visiting www.irs.gov or calling (800) 829-3676.

What's the key to securing donations?

Relationships, according to a recent survey. More than half (58.4%) of the 1,751 U.S. consumers polled for the Kintera/Luth Nonprofit Trend Report indicated that a personal request from friend or family is the biggest motivating factor for making a financial donation, followed by a message via broadcast media (12.7%) and mail solicitation (9.8%).

The survey noted that the Internet is an effective tool for boosting donations because individuals can quickly and easily ask others to support a cause.

These publications are distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection to its use.