COMPENSATION UPDATE BY LAWRENCE ASSOCIATES

IRS Institutes 403(b) Compliance Project for Higher Education

Rick Lucash - Lindalee Lawrence — Thu, 23 Jun 2011 15:22:43 +0000

The IRS has announced a 403(b) compliance project for institutions of higher education, checking on whether the plans the Universal Availability non-discrimination plans. As described in the IRS notice, the purpose of the project is to identify noncompliant plans and assist the institutions in bringng their plans into compliance. The full IRS notice is here.

IRS Issues Ruling and Guidance on Terminating 403(b) Tax-Sheltered Annuities

Rick Lucash - Lindalee Lawrence — Sun, 17 Apr 2011 13:19:11 +0000

See Revenue Ruling 2011-7 and the Employee Plans News article.

Mass AG Seeks Control over Nonprofit Directors’ Compensation

Rick Lucash - Lindalee Lawrence — Thu, 14 Apr 2011 22:15:14 +0000

In a press release today, Martha Coakley, the Massachusetts attorney general, announced the issuance of a report rejecting the justification for directors’ compensation offered by the state’s four major not for profit health insurers. Of greater significance for the nonprofit world, the AG’s office announced it will seek legislation requiring its pre-approval of compensation for the directors of any public charity, coupled with the power to rescind the approval if the office later determines it is more than “reasonably necessary.”

NH to Examine CEO Salaries at Non-Profit Hospitals

Rick Lucash - Lindalee Lawrence — Wed, 16 Mar 2011 19:02:09 +0000

The Union Leader reports that the New Hampshire Attorney General is examining CEO compensation for the state’s 24 non-profit hospitals. See the article here.

IRS Expands Scope of Nonprofit Examination to Associations

Rick Lucash - Lindalee Lawrence — Tue, 01 Feb 2011 19:48:15 +0000

In its FY 2011 Annual Report and Workplan, the IRS states “In recent years, our examination program has concentrated on section 501(c)(3) organizations. Beginning in FY 2011, we are increasing our focus on section 501(c)(4), (5) and (6) organizations. With the additional information available on the new Form 990, we will look at issues including political activity, inurement and the extent of compliance with the requirements for tax exemption by organizations that self-identified themselves as a section 501(c)(4), (5) or (6) organization.”

Senator Questions Tax and Form 990 Exemptions of Religious Organizations

Rick Lucash - Lindalee Lawrence — Mon, 31 Jan 2011 21:51:26 +0000

The Economist reports that Senator Charles Grassley (R-Iowa) is calling for a reconsideration of religious organizations’ long-standing exemption from taxes and Form 990 filing requirements. According to the article Grassley is seeking to negotiate greater “transparency” instead of pressing to end the exemptions, which he states are not required by the Constitution.

Trends Predicted for Hospital CEO Compensation

Rick Lucash - Lindalee Lawrence — Tue, 28 Dec 2010 15:59:52 +0000

Here is an interesting post at Becker Hospital Review quoting Kathy Nolan of the consulting firm B.E. Smith on 5 trends in hospital CEO compensation for the coming year.

Berkshire Taconic Community Foundation Releases Nonprofit Compensation Survey

Rick Lucash - Lindalee Lawrence — Tue, 28 Dec 2010 15:53:50 +0000

The Berkshire Taconic Community Foundation (Massachusetts) has released a compensation survey for small and medium-size nonprofit organizations in Massachusetts and adjoining communities. Among the highlights noted are higher compensation, “on average”, for male executive directors/CEOs, and the fact that over half the organizations did not have salary increases budgeted for their current fiscal year. A link to the report, prepared by Third Sector New England, is at the Foundation’s website.

IRS Issues FY 2011 Implementing Guidelines

Rick Lucash - Lindalee Lawrence — Wed, 15 Dec 2010 23:23:52 +0000

The Exempt Organizations (EO) section of the IRS has issued its FY 2011 Implementing Guidelines, which include an annual report 2010 and a “Workplan” for 2011. On the compensation front, the annual report summarizes issues identified in the EO’s Loans Project under its Executive Compliance Initiative begun in 2004 and notes among other things that of 169 organizations singled out for “single issue” examinations, 23% of the examinations resulted in changed returns or obtaining delinquent returns, and 11% resulted in proposed revocation or termination of non-profit status.

The Workplan for FY 2011 includes a “Charitable Spending Initiative” which will among other things examine organizations previously identified as having high ratios of officer compensation in comparison to program service expenditures. Continuing a program on colleges and universities begun in 2008, over 30 entities are undergoing examinations that focus on “unrelated business income and compensation practices.”

IRS Issues Priority Guidance Plan for 2010-2011

Rick Lucash - Lindalee Lawrence — Wed, 15 Dec 2010 23:09:28 +0000

The IRS has issued its Priority Guidance Plan for the remainder of 2010, and 2011. On the compensation front, the Plan announces the IRS’ intent to issue final regulations implementing the new Form 990. (The regulations issued September 9, 2008 to implement the new form were mostly “temporary.”) The IRS’s summary of items in the Plan of interest to nonprofits is here.