Non Profit Organization Guide to IRS Audit Readiness

We know that navigating the world of taxes, compliance, and audits can be overwhelming for a nonprofit organization. That’s why we’re here to clear up some of the most common questions organizations like yours face. Our mission is to help you stay focused on what truly matters—your cause—while we handle the numbers. Here are the top five FAQs we encounter from nonprofit clients:

1. What is the Public Support Test, and why is it important?

The Public Support Test is crucial for maintaining your nonprofit’s status as a public charity. It ensures that a minimum of one-third of your funding is sourced from the public, rather than a small group of major donors. Meeting this requirement allows your organization to remain a public charity, which comes with tax advantages and fewer restrictions compared to private foundations.

2. What triggers an IRS audit for non profit organization?

IRS audits are often triggered by specific red flags, such as inaccuracies in your Form 990, an over-reliance on a couple of major donors, or inconsistencies in your public support calculations. Maintaining accurate, transparent records and ensuring compliance with IRS guidelines is the best way to avoid these triggers.

3. How can we avoid mistakes on our public support calculations?

Accuracy is key when calculating your public support percentage. At G&S Accountancy, we offer meticulous double-checking services for all donations, grants, and other contributions, ensuring your figures align perfectly with IRS requirements. Our expertise eliminates the guesswork, ensuring your organization remains compliant.

4. What should we do if we get audited?

If you receive an audit notice, remain calm. G&S Accountancy is here to guide you through every step of the process. We assist with gathering necessary documentation, interpreting IRS inquiries, and representing your organization throughout the audit. With us by your side, you’ll be fully prepared and supported.

5. How can G&S Accountancy help keep our nonprofit compliant year-round?

At G&S Accountancy, we go beyond simple tax preparation. We offer year-round support by handling your Form 990, maintaining accurate records, regularly reviewing your financials, and ensuring you meet all IRS requirements, including the Public Support Test. Our proactive approach means you stay compliant, and you have more time to focus on your mission.

Ready to ensure your nonprofit stays compliant and audit-ready?

Contact us today at G&S Accountancy, where we’re committed to helping your organization thrive. Let’s take the stress out of tax compliance so you can keep making a difference!