The average CPA, attorney or tax preparer knows just enough about nonprofit tax compliance to be dangerous.
I should know, because much of the work I do involves fixing the messes created by ill-informed, but well-meaning
CPA's.
Where to start? Get yourself some good educational materials. These generally break down into the following
categories:
General books about tax-exempt organizations suitable for the non-professional (low cost).
Law Books (expensive, but worth it).
Technical Manuals (expensive, but essential)
Continuing Professional Education Courses for licensed professionals (great for breaking into new areas).
Self-study is great for topics you're already familiar with, but live courses are recommended for unfamiliar
topics.
Here's a list of resources that I use in my practice, many of which I consult on a weekly
basis:
The Law of Tax-Exempt Organizations (Wiley Nonprofit Authority) by
Bruce Hopkins is my main go-to guide when I need to answer a question of tax law that is not
covered in the basic IRS form instructions and publications. My copy is dog-eared and torn. It's
not cheap, but mine has paid for itself a thousand times over. One of the handiest uses is that it
directs me to court cases and IRS Revenue Rulings and is especially helpful when preparing Form
1023. This book should be the cornerstone of your nonprofit library.
Nonprofit Organizations, Cases and Materials, 4th (University Casebook Series) by
Fishman & Schwarz is a university textbook that covers nonprofit tax law using case law
studies. You get the historical and legal context of various laws and doctrines that are the basis
for qualifying as a nonprofit and for operating in a manner that continues to qualify. It's not
hard to read, and you can sometimes pick up a copy used on Amazon (but it will probably be fairly
well marked up with a highlighter).
How to Form a Nonprofit Corporation by
Anthony Mancuso. This NOLO Press guide explains the nuts and bolts of forming a nonprofit
corporation under state law. It is suitable for professionals, but can be understood by
non-professionals. Plenty of checklists, forms, definitions and other resources back
up a comprehensive text. Even if you aren't involve in the actual formation, this is stuff you
need to know.
Forming a California Nonprofit? Click here.
Private Foundations: Tax Law and Compliance (Wiley) By
Bruce Hopkins. If you do any work with private foundations that are not public charities, this
book is a must, since private foundations are subject to different and more onerous rules as well
as annual distribution requirements. If you buy this, be sure you purchase the most recent
Cumulative Supplement along with it so you'll have the most recent updates.
Wiley Not-for-Profit GAAP 2014 This reference deals with interpretation and
application of Generally Accepted Accounting Principles for nonprofits. Whether you're involved with
auditing nonprofits or just handling their tax matters, it's a good idea to be familiar with GAAP.
Be sure to get the most recent edition. It's updated every year.
Below are some excellent nonprofit books I recommend for non-professionals (as well as for professionals) who
need to learn about nonprofit tax compliance, fundraising, governance, and accounting with Quickbooks:
If you are a tax professional and prepare Form 990 and Form 990-EZ on a regular basis for client
organizations, you should have in your library a copy of Clark Nuber's Form 990 Compliance Guide. This is a professional desk reference that will
answer almost any question you will face when preparing even the most complicated returns and schedules. It does
NOT cover Form 990-PF which is filed by private foundations, nor does it cover Form 990-T.
Another excellent resource is from Thomson Reuters. It is the PPC Form 990 Deskbook, which covers Form 990, Form
990-EZ, Form 990-T, and Form 990-PF. It is available as a printed book in a large and heavy three-ring binder, or
is available on a DVD with an excellent search function. It is also available via web subscription. It is updated
annually. Many preparers do not need the annual updates since very little changes from year to year in most cases.
If you do not plan to purchase the updated volume each year, you should buy the printed manual. The web
subscription expires after one year. If you purchase the book on DVD and choose not to purchase the update after
the first year, Thomson Reuters can and will disable the DVD you purchased.
The nonprofit sector is a great niche to specialize in, but there are others. Becoming a specialist in a tax consulting niche is one of the best ways to
increase your profits because specialists provide more value to their clients.
