So You Say Your Nonprofit’s in the Dog House?

Because you didn’t dot all of your I’s, and cross all of your T’s?

Not to worry – your friendly Revenooers are in your corner, and they have just released some new rules which will excuse your misbehavior.

That would be yours and the other 274,999 or so small orgs which lost their tax exempt status because of failure to comply with the required annual reporting for three consecutive years.  The user fees will be lower when you apply for “goodie two shoes” status going forward.

So what does Uncle expect in return?  Here’s what you have to provide:

  1. A written statement setting forth all of the facts that support your claim for reasonable cause for failing to file a required return in each of the three years you missed.
  2. A written statement describing the safeguards which you have put into place to ensure that you will not again fail to notify your rich Uncle of your activities.
  3. Evidence to substantiate all material aspects of the written statements described above.  (Translation:  You can’t just make up a bunch of excuses – you had better have some very good reasons and records!)
  4. Properly completed and executed paper annual info returns for all tax years during and after the consecutive three year period that your org was required, but failed to file an annual info return; and
  5. An original declaration, dated and signed under penalties of perjury by an officer, director, or trustee, or other official who is authorized to sign and make the appropriate declarations.

Bottom line:  get on the ball!!  And stay there going forward!!!

And if you’re selling Mary Jane in California, we sure hope you’re paying the

requisite sales tax!  That’s because the California Board of Equalization has consistently held that sales of “medical” marijuana are, indeed, subject to sales tax.  And that’s because medical marijuana dispensaries in California are not “licensed pharmacies.”  But if you get the stuff from a licensed pharmacist, you don’t have to pay Jerry Brown on the purchase.

Notwithstanding all of this, we hear the BOE Chairman has proposed legislation to regulate the distribution of hash from growers to retailers as a way of controlling illegal sales, and getting the tax shekels.  Under the proposed legislation, BOE would administer a statewide licensing program to cover every grower, importer, wholesaler and retailer.

What will they tax next?

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author if this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He can be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to review his other commentaries at http://blog.nolo.com/taxes/.