Jody Blazek - Tax Planning and Compliance for Tax-Exempt Organizations: Rules, Checklists, Procedures--2015 Cumulative Supplement

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Library of Congress Cataloging-in-Publication Data:

ISBN 978-0-470-90344-5 (main edition)

ISBN 978-1-119-20344-5 (supplement)

ISBN 978-1-119-20559-3 (ePdf)

ISBN 978-1-119-20126-7 (ePub)

Jody Blazek is a partner in Blazek & Vetterling, a Houston CPA firm focused on tax and financial planning for exempt organizations and the individuals who create, fund, and work with them. BV serves over 500 nonprofit organizations, providing financial reporting and tax compliance and planning services.

Jody began her professional career at KPMG, then Peat, Marwick, Mitchell & Co. Her concentration on exempt organizations began in 1969; she studied and advised clients in regard to the Tax Reform Act, which completely revamped the taxation of charities and created private foundations. From 1972 to 1981, she gained nonprofit management experience as treasurer of the Menil Interests, where she worked with John and Dominique de Menil to plan the Menil Collection, the Rothko Chapel, and other projects of the Menil Foundation. She reentered public practice in 1981 to found the firm she now serves.

She is the author of six books in the Wiley Nonprofit Series: Tax Planning and Compliance for Tax-Exempt Organizations, Fifth Edition (2012); Financial Planning for Nonprofit Organizations Made Easy (2008); Revised Form 990: A Line-by-Line Preparation Guide coauthored with Amanda Adams (2009); Form 1023 Preparation Guide (2005); and Private Foundations: Tax Law and Compliance, Fourth Edition (2014), and The Legal Answer Book for Private Foundations (2002), both coauthored with Bruce R. Hopkins.

Jody is a past chair of the AICPA Tax-Exempt Organizations Resource Panel and was on the Form 1023 and 990 Revision Task Forces for the American Institute of Certified Public Accountants. She is on the national editorial board of Tax Analysts' The Exempt Organization Tax Review and the Volunteer Service Committee of the Houston CPA Society. She is a founding director of Texas Accountants and Lawyers for the Arts and a member of the board of the Anchorage Foundation of Texas, Houston Artists Fund, and the River Pierce Foundation. She is a frequent speaker at nonprofit symposia, including the AICPA Not-for-Profit Industry Conference; University of Texas Law School Nonprofit Organizations Institute; Texas, New York, and Washington State CPA Societies' Nonprofit Conferences; Loyola Law/IRS Western Nonprofit Conference; Private Foundation Summit; and Texas State Bar Nonprofit Governance Conference, among others. Jody received her BBA from the University of Texas at Austin in 1964 and took selected taxation courses at South Texas School of Law. She and her husband, David Crossley, nurture two sons, Austin and Jay Blazek Crossley, and their families.

Those of us working with tax-exempt organizations breathed a sigh of relief in 2015 as the IRS Exempt Organizations group instituted new policies and procedures to address problems during 2013 and 2014. The process, however, is not complete due to pending regulations and reorganization steps not yet completed. It is useful to remember what caused the turmoil that racked the IRS.

Don't forget an organization's tax exemption is automatically revoked if the entity fails to file a required Form 990 for three consecutive years effective as of the filing due date of the third year. More than 500,000 organizations were initially revoked, a misleading number since many on the revocation list were already out of existence. The Cincinnati office that processes Applications for Exemption has been inundated with applications for reinstatement since 2010 as the number of applications significantly increased.

To compound the problem, that office enhanced their scrutiny of applicants for 501(c)(4) exemption to look for excessive participation in election of persons to public office. They developed a BOLO = be on the lookout list to identify applicants that could not satisfy the exclusively operated for social welfare purposes standard needed to qualify for exemption. The regulations (still) provide that activity aimed at influencing an election cannot be the entity's primary activity though there was no numerical definition of the word primary. Applicants with names that implied political involvement, including Tea Party or Democracy, were given enhanced scrutiny. As a result of pressure from Congress, the media, and the organizations themselves, the system was abandoned and some officials in the exempt organization division resigned or were relieved of their duties. Amendment to those regulations is still pending.