New Form 1099 Requirements

IRS issued Notice 2010-51 seeking comments on the new Form 1099 reporting requirements. T he new healthcare legislation requires all payments to be reported to IRS on Form 1099. If you feel strongly about such new regulatory burdens, the IRS wants to hear from you 9/30/2010. The Notice 2010-51 clearly applies the new Form 1099 to payments starting after 12/31/2011. So 2012 is the first year of the new requirements.

You say hotel, court says church

In New York, a retreat center won its property tax exemption in court. The group argued that its 46-acre facility was used for "days of recollection, retreat, pilgrimages, shrines, mass, and adoration benediction."

Matter of the Eternal Flame of Hope Ministries v. King,

Nonprofit organizations should review their property tax exemptions to assure that they do not lose it inadvertently. Further, non-use will automatically lose the tax exemption.

Religious discrimination in parachurches?

WorldVision recently won its right to discriminate on the basis of religion from the 9th Circuit Court of Appeals. WorldVision receives nearly $1 billion (not a typo) from government sources that it distributes food and supplies to the needy around the world. Two employees, claiming they no longer believed in traditional Christianity, sued WorldVision. They claimed that religion had no role in their job duties at WorldVision. Since they were dealing with government funds, they believed that WorldVision was secular and could not require them to be traditional Christians. WorldVision, who enjoys church status from the IRS, demonstrated that its primary motive for assisting the poor came from its religious beliefs.

Religious organizations should review their employee handbooks, articles of incorporation, bylaws and statement of faith to determine whether they can qualify as a religious organization that is exempt from the religious nondiscrimination requirements in Title VII. In other words, what evidence do you have to prove that your activities are inherently religious?

Founder's daughter sues because she claims she was wrongfully discharged by the Board in retaliation for reporting misdeeds to state Attorney General. The daughter of founder Larry Jones (Feed the Children) helped the Board fire her father over alleged wrongdoing. Retaliation for whistle blowing is a tough suit for everyone involved. But this type is suit is easily preventable. Every nonprofit organization should have a whistle blower policy in place to protect whistle blowers and avoid this type of mess. I will send a sample whistle blower policy to anyone who requests it at fsommerville@nonprofitattorney.com.

Today, DC Court of Appeals affirms that electronic or internet "church" does not meet the definition of a church for tax purposes. This affirms the IRS test that the organization must have regularly conducted worship services where the attendees are physically present at the same location. Basically, I am glad the court affirmed a position I have been taking for several years.

IRS released a newly revised Publication 1771, Charitable Contributions. This is a must read for nonprofit organizations that accept tax deductible contributions because I am still seeing organizations that fail to comply with the rules.

Background check abuses?

EEOC claims that employers are using background checks to unlawfully discriminate against minorities. Since 38% of the prison population is black (compared to 12% of the total population) and Latinos are 2.3 times more likely to go to prison than whites, the use of as criminal background check or credit report is discriminatory.

KEY: The EEOC says employers must consider the nature of the job, the seriousness of the offense and how long ago it occurred. For example, a drunk driving conviction is very important is the employee drives a vehicle for the employer, but probably irrelevant for an office worker.

For employers, an accurate job description is critical. If the employer can connect the criminal offenses in the report to a job description, then the employer is justified in using criminal background checks and/or credit reports.