Discussion:QUESTION ON fORM 990
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Discussion Forum Index --> Tax Questions --> QUESTION ON fORM 990
| 11 January 2008 | |
| I am preparing a Form 990 for a labor union. The officers conduct many meetings in restaurants or order in food for meetings. Is this deducted as conference & meeting expense. Is there any 50% limit on the deduction? I don't think so but am not sure.
Also some of the officers are reimbursed for their breakfast or lunch when they travel locally to meetings. Is this deducted at 100%? I know these sound fairly basic but i am confused. Thanks. | |
| 11 January 2008 | |
| The lunches are considered meals and entertainment - even though business is discussed. This is considered only 50% deductible.
The one occasion where entertainment expenses are considered fully deductible is when there's an organization social event and all members/participants are invited to attend and it's for the benefit of all with no discrimination of attendees - such as a Christmas party. Regarding the reimbursing the officers - provided they submit documentation under an accountable plan, reimbursements to them are not taxable. However, to the union, the deduction is only 50%. If no accountable plan, the officers are considered to have taxable compensation reportable on a W-2, subject to withholding taxes (FICA, Medicare, FWT) and subject to unemployment insurance. | |
| 11 January 2008 | |
| I thought the exemption language in section 501 exempted these orgs from the taxation rules of Subtitle A. Seems to me they should tell IRS and contributors 100% of what they spend, not a meaningless 50% as applicable to taxable entities. | |
| 11 January 2008 | |
| The only place I'm aware of that a tax-exempt organization of this type would be subject to a 50 percent limit on meals expense would be on a 990-T. What is the authority for and purpose of such a limitation on Form 990? I've never heard of that, but I'm always ready to learn something new;-) | |
| 11 January 2008 | |
| I agree with txsrv and cpa david.
I do know that in NY, the unions have additional filing requirements where every single expense of this type is documented and it must be explained how the expense further the unions purpose. and not in total by expense, but individually, each and every check. glad i don't do unions anymore | |
| January 11, 2008 | |
| Nonprofit organizations are generally not concerned about "deductibility" except when it comes to UBI as mentioned by TxSrv. The main concerns with the 990 are disclosure of certain things like political/lobbying activities, amount of management and fundraising expenses as compared to program expenses and related-party transactions.
In my experience it is quite common to include meals in categories that would not normally be used in for-profit entities. Therefore, meetings/conferences seems like a logical place to report meals in this situation. Reimbursements of meals is also reportable in the same way. | |
| 11 January 2008 | |
| Okay - I stand corrected. Wasn't aware the rules were slightly different than for for-profit entities.
(I do non-profits - but no unions). | |
| 11 January 2008 | |
| Thanks for all the responses clarifying my confusion. Fsteincpa- what NYS additioanl filing requirements are you referring to? I am in NY and the only return that was ever filed for this union is the federal 990? | |
