Qtr 4 - Newsletter 2019
From the President
Dear Members and Friends of CMA,
For over 30 years now I have been a part of CMA, the last nine years serving as President and Chief Executive Officer. During that time, I have seen a lot of changes in the Association industry as a whole and CMA in particular.
Many of you are also long-time members of the Association as well so it probably won't come as too much of a surprise today when I announce a few changes to how we plan on serving you in the future here at CMA.
While many things will stay the same, for example, e-consulting, quarterly newsletters, special white papers on relevant issues (I have about 20 drafts that I prepared during the year that need final editing and formatting so they can be added to our bookstore), resourcing members via our website, e-mail & phone conversations, and referrals to other experts in law, risk management, human resource management, governance, tax, and compliance related issues will all continue to be available... a few major changes will occur. (read more about upcoming changes HERE!)  
Yours in His Service,
Steve Boersma, Ph.D.
Obtaining Copies of Exemption Determination Letter from IRS
Do you have questions about the exemption of your church or nonprofit organization? Wondering if your organization's exemption is still valid? Have you lost (or can no longer find) your federal income tax exemption
determination letter? Have you been able to confirm that your organization is, in fact, exempt from income tax but need a copy of the determination letter to prove it to contributors and grantors? (read more)
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Sales and Use Tax: Corporation's
Officer Personally
Liable for Its Unpaid Tax
A corporation's officer was personally liable for the  
unpaid California sales tax owed when the corporation ceased business because the taxpayer was responsible for tax  
compliance during the liability period.
Under California law, (R&TC section 6829) a corporation's officer can be held personally liable for the corporation's sales tax if:
  • the corporation's business is terminated;
  • the corporation collected but failed to remit sales tax;
(read more) 
DOL Releases Final
Overtime Rule Changes

In late September the United States Department of Labor (DOL) released its final rules for establishing the amounts required to be earned by an employee in a given calendar year for that employee to be considered "exempt" from the Fair Labor Standards Act (FLSA) overtime requirements.
Under the final rules, which go into effect January 1, 2020, the amounts required to be earned by an employee for that employee to be exempt from the FLSA overtime requirements will be:
  • $684 per week ($35,568 annually), and
  • $107,432 for a Highly Compensated Employee
(read more
Federal Court Dismisses Challenge
to Church Form 990 Exemption
A District of Columbia federal district court has ordered the dismissal of a legal challenge to the longstanding church exemption to the filing of IRS Form 990: Return of Organization Exempt from Income Tax filing, an informational return most nonprofits are required to file annually. (read more
Social Security Wage Base
for 2020 Announced
The Social Security Administration (SSA) recently announced that the 2020 Social Security wage base will be $137,700, which is an increase of $4,800 from $132,900 in 2019.
There is no limit to the wages subject to the Medicare tax; therefore, all covered wages are still subject to the 1.45% tax. As in 2019, wages paid in excess of $200,000 in 2020 will be subject to an extra 0.9% Medicare tax withholding that will only be withheld from employees' wages, as employers do not pay the extra tax.
The Federal Insurance Contributions Act (FICA) tax rate, which is the combined Social Security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2020 up to the Social Security wage base. The maximum Social Security tax employees and employers will each pay in 2020 is $8,537.40. This is an increase of $297.60 from $8,239.80 in 2019. (read more)
When is a Charitable
Contribution Deductible?
Are Churches Legally Required to Issue
Statements for Every Contribution?
What are the Rules for Receipting Year End Gifts?
Churches and other charities typically face questions about receipting gifts and/or the deductibility of certain gifts in January when donors are looking to receive their annual statements of donations. But they may also encounter it throughout the year.
No law (state or federal) requires a charity to issue the donor a receipt. The receipt is issued as a courtesy to the donor in order to allow them the potential ability to deduct the contribution on their annual tax returns. (read more
Employment Corner
null     Court of Appeals Affirms IRS Tax Court Denial of Charitable Contribution Deductions to Married Couple
The Court of Appeals affirmed the Tax Court's findings in a case where a married couple was denied deductions for charitable contributions of their residence, certain land improvement expenses and a tractor/mower made to a nonprofit religious organization.
The Court of Appeals recently affirmed the Tax Court's disallowance of the land-improvement expense deduction on the ground that the taxpayers were not entitled to take that deduction for one tax year because the expenses were incurred in other tax years. 
The taxpayers argued that they reasonably relied on the advice of their CPA and attorney that they could take the deduction on their tax return because they lacked accounting or tax experience. (read more)