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IRS Exempt Organizations Update

April, 2011 Banner
EO Update March 31, 2011

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Issue Number:    2011-5

Inside This Issue

  1. IRS Issues Notice and Requests Comments on Affordable Care Organizations
  2. Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage
  3. Webinar on Small Business Health Care Tax Credit
  4. Reporting Foreign Bank and Final Accounts (FBAR)
  5. PTIN Information for Exempt Organizations Tax Preparers
  6. Proposed Regulations on Disclosure to State Officials
  7. Administrative Exceptions to Electronic Filing Requirements
  8. Eight Tips for Deducting Charitable Contributions

  1.  IRS Issues Notice and Requests Comments on Accountable Care Organizations

The Affordable Care Act establishes a Medicare Shared Savings Program (MSSP) which encourages Accountable Care Organizations (ACOs) to facilitate cooperation among providers to improve the quality of care provided to Medicare beneficiaries and reduce unnecessary costs.

More information can be found in Notice 2011-20, which solicits written comments regarding what additional guidance, if any, is needed for tax-exempt organizations participating in the MSSP through an ACO. This guidance also requests comments regarding what, if any, additional guidance is needed addressing the participation of tax-exempt organizations in non-MSSP activities through ACOs.

Comments must be submitted by May 31, 2011. Additional information on the MSSP is available on the Department of Health and Human Services website

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  2.  Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage

The IRS announced the issuance of interim guidance  for employers on the informational reporting of the cost of employer-sponsored health insurance coverage on annual Forms W-2 furnished to employees.  This new reporting to employees is for their information only. 

The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2.  However, taxpayers are reminded that employer- provided health coverage continues to be excludable from an employee's income and is not taxable. 

Reporting the cost of health coverage on the 2011 Form W-2 (furnished to employees in 2012) is voluntary for all employers and will continue to be optional for small employers for 2012 (for 2012 Forms W-2) and until further guidance is issued.

The Notice provides guidance for those who are subject to the new requirement for 2012 as well as those who voluntarily choose to comply with the requirement for 2011 and 2012. Comments are requested as well.

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  3.  Webinar on Small Business Health Care Tax Credit

The Small Business Health Care Tax Credit, created as part of the Affordable Care Act, was designed to encourage eligible small employers, including tax-exempt organizations, to provide health insurance coverage to their employees.

If you missed the recent webinar on the Small Business Health Care Tax Credit (co-sponsored by the IRS Small Business/Self-Employed & Tax Exempt and Government Entities Divisions) or if you want to review what you learned, you can now view a recording of the event through the IRS Video portal.

You'll learn:

  • How to determine whether your small business or exempt organization may be eligible to claim the Small Business Health Care Tax Credit
  • What special rules and limitations apply
  • How to calculate and claim the credit
  • Where to find out more about the credit 

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  4.  Reporting Foreign Bank and Financial Accounts (FBAR)

Does your organization have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account?  If so, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). 

The Treasury Department Financial Crimes Enforcement Network (FINCen) recently published final regulations, effective March 28, 2011, amending the Bank Secrecy Act regulations relating to the Form TD F 90-22.1.  These regulations apply to FBARs required to be filed with respect to foreign financial accounts maintained in calendar year 2010 and to FBARs required to be filed with respect to all subsequent calendar years.

Notice 2011-31 provides instructions for persons answering questions relating to foreign financial accounts on 2010 federal income tax and information returns.

For additional FBAR information see

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  5.  PTIN Information for Exempt Organizations Tax Preparers

All tax return preparers who are paid to prepare or assist substantially in the preparation of any U.S. federal tax return, claim for refund or other tax form submitted to the IRS, except those forms specifically excluded by Notice 2011-6, need a PTIN.  Find specialized PTIN information for those who prepare exempt organizations tax forms on 

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  6.  Proposed Regulations on Disclosure to State Officials Regarding Exempt Organizations

The IRS and Department of Treasury have issued proposed regulations that amend existing regulations to reflect changes to section 6104(c) of the Internal Revenue Code made by the Pension Protection Act of 2006 (PPA). These rules provide guidance to states regarding the process by which they may obtain or inspect certain returns and return information (including information about final and proposed denials and revocations of tax-exempt status) for the purpose of administering state laws governing certain tax-exempt organizations and their

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  7.  Administrative Exceptions to Electronic Filing Requirement

Notice 2011-26 grants administrative exemptions to the specified tax return preparer electronic filing requirement under section 6011(e)(3) of the Code and the regulations. Because Form 990-T, Exempt Organizations Business Income Tax Return can not be filed electronically, preparers are granted an exemption from the electronic filing requirement with respect to that form.

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  8.  Eight Tips for Deducting Charitable Contributions

Contributors who wish to claim the charitable contribution deduction are encouraged to read these eight tips to help ensure your contributions pay off on your tax return. 

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