Technical Requirements

For

Non-profits

1) No private enrichment

· The government is looking for conflicts-of-interests in transactions.

· If you have transactions between the Non-profit and an officer, director or key-employee make sure to carefully document the transaction.

2) Document salary levels

· The IRS is very concerned with the amount of salary that is paid.

· They have expanded the Non-profits that have to report the compensation for the 5 highest paid employees.

· They want to know the total cash and non-cash compensation.

· You must document your determination of salary.

3) Expense reimbursement policy

· There are 2 main requirements for the plan; you should have an accountable plan and maintain adequate records.

· An accountable plan requires that you substantiate the expense and that any amount paid in excess of the expense is treated as income to the recipient.

· Adequate records require account books, a diary, log or statement and that your records are prepared on a timely basis.