Macy Mark Morris, CPA

Non-profits must have an adequate accounting system to manage the organization and meet reporting requirements. Non-profits must report more detail to the IRS on its activities than a for-profit business . Non-profit tax returns are open for public inspection. Expenses have to be allocated to administration, program or fund raising. Many non-profits operate programs that need to be accounted for separately. If a non-profit operates a business even if all the income is used solely for the non-profits purpose, it is taxable income and an additional tax return is required. A single fund raising event may have to be accounted for separately. In addition to tax returns, reports must be submitted to the California Attorney General and contributors may require an accounting. 

 

The IRS will approve several types of non-profits, the most common is 501 3(c).