Form 990 - Accounting for Non Profit Organizations

Form 990 related to non-profit accounting and non-profit organizations

Hinkle + Landers, PC, one of the leading Albuquerque CPAs and accounting firms, stays up to date on news that has an impact the accounting industry and our community.  The following is a blog by Steve Nolan, CPA, an Audit Manager of Hinkle + Landers, PC related to the tax form 990 related to non-profit accounting for non profit organizations.

My daughter is a program director for a non-profit organization that operates a small organic farm for the purpose of educating about healthy and responsible eating.  The program is funded by grants mostly from two mainline church denominations.  The program is not required to file any returns with the Internal Revenue Service such as a Form 990 information return.  She also volunteers for another organic farm that also promotes education concerning healthy food consumption.  This organization is a non-profit organization and is required to file a 990 information return.

Why would one non-profit organization be required to file a Form 990 and one non-profit organization not required to file?  I will answer this towards the end of the article.

Non-profit Accounting in Albuquerque spans a large spectrum of charities and health and welfare organizations with different purposes that meet non- profit criteria.

According to IRS regulations covering Non-profit Accounting in Albuquerque, and in general, requires non-profit organizations that have $50,000 or less in gross receipts to file a Form 990N through an e-Postcard.  An e-Postcard is simple to complete with eight questions required to be answered.  There is no penalty for late filing of an e-Postcard but organizations that does not file for three years risks losing their exempt status.  The non-profit organization may also file a regular Form 990 if it wishes.

Non-profit organizations with less than $200,000 in gross receipts or $500,000 in assets may file Form 990-EZ of a full Form 990.  The Form 990-EZ is shorter than the Form 990 but does require some expertise to complete.

Non-profit organizations that have at least $200,000 in gross revenue and $500,000 in assets are required to file a complete Form 990.  Form 990 has a number of schedules to be completed and requires a good working knowledge of preparing that information return for Non-profit Accounting in Albuquerque.

A Form 990-PF is required to be filed for a private foundation non-profit organizations.

Hinkle + Landers, CPAs, who are Albuquerque Accountants and have more than 40 years experience in filing Form 990s for Non-profit Accounting in Albuquerque can provide expert advice and services for any non-profit organization.

So why would two seemingly similar organizations mentioned above have different filing requirements.  It is because certain non-profit organizations are exempt from filing any type of Form 990.  These include churches and religious organizations, organizations included in a group return and organizations require filing another type of return.

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides audit, fraud and forensic accounting services as well as tax preparation, bookkeeping and elder care in Albuquerque New Mexico.

Business Consulting Service - Hinkle + Landers, PC

The importance of researching, who is in charge of investing your money

Here at Hinkle + Landers, PC, one of the Albuquerque accounting firms, as a part of our Business Consulting Service we stay up to date on news that has an impact on our community.  By keeping current on settlements and awards regarding fraud that affect members of our community, we are able to remain vigilant regarding potential risks to our clients. Investor risk is not only relevant to individuals, but also any size organization.  Many organizations rely on financial advisors, investment firms, or Foundations to manage their investments.  These investments usually make up a significant portion of the organizations assets.  As a result, due diligence regarding the person who is in charge of investing the organization’s money, can make all the difference.

Recently a hedge fund manager, Matthew Sample settled a federal lawsuit, where he was accused of defrauding five investors, two of whom were from New Mexico.  The lawsuit accused him of raising $1 million from the investors over a 3 year period.  Of that million about $500,000 was actually traded, and the remaining money was used for his personal use, or to pay other investors.  The New Mexico investors invested over $700,000 with Mr. Sample and when they requested to withdraw $500,000 from their funds, Mr. Sample gave multiple excuses as to why their money was not available. 

Although this news story relates to defrauded individuals, our business consulting service, pass this news and others like it on to our non-profit organization clients.  Since many of our clients are involved with financial advisors and Foundations, we cannot over emphasize the importance of researching who is in charge of investing their money once they outsource that responsibility. When one of our clients is deciding whether or not to change financial advisors or Foundations, we encourage them to reach out to us, and in turn we reach out to other Albuquerque accounting firms, and see if the potential advisor or Foundation is working with other non-profit organizations, and what their reputation is.  We strive to work with our clients in order to prevent any misuses of their money, and stay ahead of anyone trying to defraud them out of their hard earned assets.

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides fraud and forensic accounting services in Albuquerque New Mexico

Forensic Accounting Services and Fraud Prevention Services – Why Bother?

Hinkle + Landers, PC, one of the leading Albuquerque CPAs and accounting firms, stays up to date on news that has an impact the accounting industry and our community.  The following is an article of interested related to fraud and forensic accounting services.

Forensic Accounting Services and Fraud Prevention Services – Why Bother?

One only has to search the internet using the key words “fraud articles” to see the plethora of examples of fraud.  From corporate fraud to medical fraud, from large organizations to “Mom & Pop” organizations, from highly-skilled fraud to easy-as-pie fraud, no organization or person is fully protected or out of the reach of the arms of fraud.

Identity theft scams abound with direct contact schemes using email or cold-calling, credit card fraud such as hacking or un-authorized use, and alliance scams which rely on familiarity such as a caregiver or a relative, trusted or not.  Medical fraud is also flourishing from a variety of billing schemes.  Churches and social groups are popular targets from the outside and the inside, from financial advisors to clergy.  Corporate fraud is more diverse than the organizations that are its targets.  Simply put, the old English proverb of “Where there’s a will, there’s a way” is the rule of thumb.

There are some common denominators to all frauds and one of the most pervasive is the lack of sufficient internal controls.  Internal controls are their relative importance are deeply imbedded in the foundation of generally accepted accounting principles, both state-side and abroad.  So how do we protect ourselves from fraud?  Proactive is almost always better than reactive.  

Fraud Prevention Services are an effective proactive approach.  An expert assessment of risk and internal controls is a must, and arguably is as paramount of an input into the services or products that are sold as the raw ingredients. 

Forensic Accounting Services that are reactive in nature or after-the-fact such as services for damages calculations related to various litigation scenarios or procedures designed to detect irregularities or reconstruct records.  There are also forensic accounting services such as those related to bankruptcy or valuations either for business purposes or related to family law areas such as divorce, spousal support or custodial support determination.

The benefit of expert Fraud Prevention Services and/or Forensic Accounting Services performed by a reputable CPA firm cannot and should not be underestimated.  The high costs of fraud and its increasing prevalence in the marketplace are sufficient reasons to engage in asset protection tactics.  There are no guarantees but it is logical to conclude that using sunscreen in the Mohave desert in mid-day August is better than going without.    

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides fraud and forensic accounting services in Albuquerque New Mexico - Call Us: (505) 883-8788

Find Accounting Software

Hinkle + Landers, PC, an Albuquerque New Mexico CPA firm recommends this article by Luke Wagner

Project Specialist at Find Accounting Software

Understand your current setups positives and negatives

The first thing to do when considering a switch to new accounting software is to look at your current setup. Does it make sense to replace your current way of accounting? Let’s take a look at a few of the different options:

1. Continue with an off the shelf bookkeeping program. It is likely that, like most small businesses, you are currently using some sort of small business accounting program that was purchased off-the-shelf or online. You set up the software yourself and trained yourself how to use it. What’s nice about this software is it was very cost effective and handled the basic needs of the business. These relatively easy to use, intuitive systems are good for many companies as they start but are not industry specific and have other performance limitations.
2. Manual accounting. Perhaps you are currently doing everything manually. Using a paper chart of accounts or checkbook, handwriting sales orders, and tracking inventory on a notepad or through Excel spreadsheets. When sales volumes and outgoing expenses are low, this can be the easiest and most effective approach. As transactions increase and business picks up, this setup very quickly can become both prone to errors and inefficient.
3. Outsourcing accounting to a provider. Outsourcing can be attractive because it allows you to focus on your business and pass the duties to an accounting/bookkeeping firm. What better way to do accounting than have an actual accounting or bookkeeping firm do the accounting for you? Outsourcing the bookkeeping allows you to focus on your customers rather than worry about your books. However, the data you are receiving from the accountant is not real time. Plus, you are not free from all of your responsibilities. You still need to track your inventory, your job costs, your daily sales and provide that data to the accountant. As your business picks up, outsourcing accounting can become increasingly more expensive and prevent you from exercising a stronger measure of control on your company’s financial performance.

Keeping informed on anti-hacking and anti-virus technology

Hinkle + Landers, PC an Albuquerque CPA firm prides itself on remaining at the forefront of cyber-security and efficiency. Keeping informed on the latest anti-hacking and anti-virus technology is one of our top priorities. Client confidentiality and data security are crucial to any high-functioning CPA firm.  This must-read article was posted on www.AccountingToday.com  and explains the basics of smart WiFi protection:

Protect Your Firm’s WiFi Network

Los Angeles (June 4, 2014)

By Daniel Hood

“Is your WiFi network just low-hanging fruit for bad guys?” asked security expert Rolfe Pope, in a session titled ““Locking Down Your WiFi Network Security” at the California Accounting and Business Show this week -- and then proceeded to detail exactly how vulnerable WiFi networks can be.

Using four different scanning programs that are available free on the Web, Pope, a consultant and advisor with over 30 years experience managing and advising on network security, including work at the Department of Defense, described how he was able to scan WiFi networks at an airport gate, a coffee shop, and a hotel, and to find identifying information and even login names for a wide range of attached devices, from traveler’s iPhones and laptops to local printers and even cash registers. With similar information from your firm’s WiFi network, hackers can hijack your network, steal or change client data, or use your network to attack others.

“It’s true that hackers can break into your security, but if you do some simple things, it makes it much harder for them,” Pope said.

• Hide your network. The Service Set Identifier or SSID for most networks is broadcast -- it’s the name you see when you go looking for WiFi networks -- but you can set your router to not broadcast the name, so that the only people who can access your network are those to whom you’ve told its name.
• Camouflage your network. Pope actually recommends this over hiding your network, since there are ways to find even hidden networks, and hackers assume something that’s hidden must be valuable. Instead, give it a meaningless name, a random string of letters and numbers, rather than “XYZFirmNetwork.”
• Set up two networks. Stern, a CPA, CFF and a partner at Clumeck Stern Schenkelberg & Getzoff, said that his firm has established both an inside network and an outside or guest network on its router. The guest network -- set up outside the firm’s firewall, forestalls hackers, and also prevents guests from inadvertently infecting the firm’s internal system with viruses.
• Upgrade your security. “Usually you want to disable the built-in WiFi network security, since it’s relatively easy to hack,” Pope said. Set your encryption levels to the WPA2 standard -- currently the strongest.
• Get a good router. While you can buy cheap routers, Stern said that their security is often weak or unreliable. A good router can run anywhere from $500 to $1,500, he suggested, and is worth the price for the protection it can offer.

Hinkle + Landers is an experienced Forensic Accounting firm.