2.  Private benefit/inurement  Lobbying  Political Activity  Excessive unrelated business income

3.  Money coming in  Money going out  Employment tax records  Asset records

4.  Gross receipts less than 50,000 can file a 990-N (which is an E- Postcard filed to the IRS)  Gross receipts less than 200,000 and total assets less than 500,000 can file a 990-EZ or a 990  Gross receipts greater than 200,000 and total assets greater than 500,000 must file a 990  See the attached sample forms at the end of the packet. The highlighted areas of the Form 990 are the IRS’ hotspots.  Calendar year end entities - Return is due May 15 th. An extension is available if needed.

5.  Correspondence examinations  Office examinations  Field examinations

6.  An organization should be prepared to adopt and enforce a series of basic governance policies and practices as a minimum for best practices ◦ Code of Ethics ◦ Conflict of Interest (see attached) ◦ Donor Gift/Acceptance Policy (see attached) ◦ Executive Compensation ◦ Expense Reimbursement (see attached) ◦ Joint Ventures (see attached) ◦ Political Activities (see attached) ◦ Record Retention/Destruction (see attached) ◦ Whistleblower (see attached) ◦ Grant Guidelines ◦ Transactions with Interested persons ◦ Investments ◦ Chapter Branches and Affiliates ◦ Fundraising Policies

7.  www.guidestar.org www.guidestar.org ◦ Guidestar provides information about all non-profit organizations. ◦ Ability to update your profile with information about your organization

8.  Unrelated Business Income (UBI) – For example, you run a shelter, but create a new dog grooming service within the shelter. If you charge a fee for the grooming, that income is considered Unrelated Business Income. It is not the original intent of the organization and is “Unrelated” to the organizations mission.  Excess Officer/Employee salaries (>$100,000)  Excess contractor payments (>$100,000)  Party in interest transactions  Lack of Governance Policies

9. Shoebox of receipts vs. Financial Statement  The more organized your material is, the less your accountant/CPA will charge you.  Mandatory separation of personal funds and business funds  Excel format vs. Software (QuickBooks, Peachtree, etc)  Set up of computer software file is crucial.  See attached example of Audited financial statements