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CCST 2007

CCST 2007. The INs and OUTs of Filing for Exempt Status Presented by Julie Fry, CPA. Solution to 90/10 Challenges. Do you have nightmares about your 90/10 ratio? Are you consistently worried about passing the test? The solution to your problem may be just around the corner!!.

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CCST 2007

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  1. CCST 2007 The INs and OUTs of Filing for Exempt Status Presented by Julie Fry, CPA

  2. Solution to 90/10 Challenges • Do you have nightmares about your 90/10 ratio? • Are you consistently worried about passing the test? • The solution to your problem may be just around the corner!!

  3. Solution to 90/10 Challenges • Current proposed legislation before Congress • Allowance of institutional scholarships in total revenue calculation. • What does this mean for your organization? • Set up 501(c)3 entity • Provide scholarships to worthy candidates • Add scholarship dollars when calculating total revenue

  4. Solution to 90/10 Challenges • How would this actually work? Student loans $ 9,500 Student cash 500 Ratio = 95% Total revenue $10,000 Failed Student loans $ 7,000 Student cash 500 Ratio = 70% Scholarships 2,500 Passed Total revenue $10,000

  5. Non Profit’s - 101 • A brief history…… • Private foundation vs. public charity • Unrelated business income – 1950’s • Intermediate Sanctions – mid 90’s • IRC Section 4958 • Annual filing/reporting requirements • Form 990

  6. Filing for Exempt Status • The Process • Incorporate • Articles of Incorporation • Bylaws • Filing with State • SS-4

  7. Filing for Exempt Status • The Process • Form 1023 • Mission/vision statement • Scholarship program • Establish board of directors • Financial information/budgets

  8. Filing for Exempt Status • The Process • Form 1023 • Narrative description of activities • Form 2848 • Itinerary • Advanced ruling period

  9. Filing for Exempt Status • The Process • Form 1023 • Relationship/commoncontrol issues • Conflict of interest policy • Fundraising • Political influence

  10. Filing for Exempt Status • How should scholarships be awarded? • Non discriminatory fashion • Awarded upon need and/or merit • Available to an “open-ended” group, rather than “pre-selected” individuals • Well documented procedure

  11. Filing for Exempt Status • What are the costs involved in this process? • Attorney fees • Filing fees – State and Federal * • CPA fees • *standard fixed fees

  12. Filing for Exempt Status • In conclusion, what are the benefits to your school? • Can improve 90/10 ratio • Awards worthy students scholarships • Marketing tool when recruiting new students

  13. Filing for Exempt Status • Questions ? ? ?

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