Items to Watch...

1099 Provision in Health Care Bill – The Patient Protection and Affordable Care Act included Section 9006 which would amend Section 6041 of the Internal Revenue Code by requiring all organizations to begin reporting payments to corporations and payments for merchandise on Form 1099 beginning in 2012. Both the Senate and the House have passed bills to repeal the 1099 provision and this initiative has the support of the President. However, the parties cannot agree on how to approach the revenue loss that this repeal would create, so this issue remains a topic of debate. We will have to wait and see what the final outcome is and the potential effect this will have.

GuideStar Form 990 Issues – GuideStar has been informed by the IRS that processing errors occurred on some Form 990s that were electronically filed with the IRS between January 1, 2009 and December 3, 2010 for form year 2008. As a result of these errors, inaccurate data appears on the pdf file of the tax return filed with the IRS and subsequently posted on GuideStar. GuideStar is working with the IRS to obtain an accurate return and post to their site. An organization can post its own copy of Form 990 on the GuideStar website to supplement the form supplied by the IRS. GuideStar has posted a notice on the impacted Form 990s on their website so that a user will be notified of the issue if they select this return to view. For more information, visit GuideStar’s website at www.GuideStar.org.

IRS to Share Information with State Tax Agencies – The IRS issued guidance that will permit them to disclose whether they are going to revoke the exemption of a charity or private foundation to the appropriate state officer even if this has not been communicated by the IRS to the organization yet. This communication is permitted under REG-1401-8-08 included in amendments to the Pension Protection Act. In addition, the IRS can disclose information about whether an organization has applied for charitable exemption and whether the IRS plans to deny the request or whether the organization has withdrawn the request.

OMB 2011 Compliance Supplement – The Office of Management & Budget (OMB) plans to issue their compliance supplement in a more timely fashion than in the prior year. They have provided the American Institute of Certified Public Accountants’ Government Audit Quality Center (GAQC) a draft copy of the compliance supplement. The GAQC has prepared a summary of the major changes in the Supplement that can be accessed at http://www.aicpa.org/InterestAr-eas/GovernmentalAuditQuality/Resources/OMBCircularA133/DownloadableDocu-ments/Summary2011ProposedChangesto-theComplianceSupplementFinal.doc.