May 01, 2015
The term “nonprofit” is commonly misused when referring to an organization, as it assumes that nonprofits fail to actually turn a profit. So it is no surprise that some eyebrows were raised earlier this week when news broke that the National Football League (NFL) announced it would be giving up it nonprofit status.
What the NFL really did was made an election to forgo its tax-exempt status for the head office located in New York. Just like trade associations, professional sports organizations like the NFL have historically be granted a tax exempt status under code section 501(c)(6). The rationale behind this is that they merely work to promote the members of their leagues, and it is the individual teams themselves that make the profits and pay the taxes. Another example of a 501(c)(6) is the AICPA, which doesn’t have a profit motive itself, but promotes and supports its for-profit members. The NFL’s individual teams are not tax-exempt, and although all but one of the NFL teams receive don’t disclose financial information, it is assumed that they pay corporate income tax rates on their profits.
The reasoning for the league’s sudden change is unclear, but many believe it has to do with the disclosure of public information. Upon request, organizations that file Form 990 are required to disclose the information included on the form. Some of this information that is notable is the compensation of officers and key executive, and the money the NFL collected from fines and penalties. The NFL has run into its fair share of PR blunders in the past year and may want to keep as much information private as possible.
Remember, just because the NFL was a “nonprofit” doesn’t mean they weren’t making any money. The move to drop the tax-exempt status will cost them. By looking up the organization’s Form 990 it filed in 2013, one can see that revenues for the NFL accumulated to about $327 Million for that year. The Joint Committee on Taxation has estimated that the NFL will now have to pay approximately $10 million a year in taxes. In the end, the privacy the league gains may be worth the tax dollars in the minds of the NFL.
By: Anthony Mifsud, CPA
Mar 03, 2015
Outsourced accounting is changing the way organizations do business. Not only can it provide clarity to how costs are incurred, where revenues are earned and highlight areas for growth, it can also make organization’s stronger. However, some are reluctant to explore the option of cloud-based outsourced accounting based simply on common misconceptions. Here are the top 5 myths and the truth about outsourced accounting and its benefits.
Myth #1: Losing control of your organization Outsourced accounting actually enhances the control you have over your procedures and accounting data. Your financial processes will be standardized and established guidelines will be followed rigorously. You will have real-time data at your disposal providing you greater control of your cash flow and other performance indicators. Time and time again, our clients t feel they are no longer alone and have gained their own personal team of experienced accountants. Outsourcing has offered our clients the ability to work collaboratively and more efficiently to establish greater control over their financial well-being.
Myth #2: Outsourcing eliminates jobs Many organizations have limited resources and as a result they rely heavily on their employees to perform multiple functions. Often times, employees are acting in roles in which they do not have any formal training. Wearing too many hats can lead to inefficiencies. Not only does this hinder growth within the organization, but it also adds stress to the employee. Outsourcing your accounting function allows your staff to be refocused on efforts that are more suitable for their skill set. Furthermore, the organization can now direct its resources towards their mission, funding and grant writing.
Myth#3: It’s Not Secure Besides transforming how businesses function internally and externally, the growth of cloud computing also has a consequence on outsourcing data management. By partnering with WVC RubixCloud your security can and will be improved. Security is a top priority and we have partnered with the leading software company to ensure data is protected. Furthermore, as a result of the shared access of real-time data, transactions are visible from any source with an internet connection. If a transaction has been completed and you are not sure of its nature, you can instantaneously take action.
Myth #4: Outsourcers Don’t Understand My Business When you partner with a WVC RubixCloud, you will gain a well-rounded team of financial experts who have worked in a variety of industries both in public and private sectors.
Myth #5: Outsourcing is only viable for large organizations No matter the size of your organization, outsourced accounting options are flexible. One of the main advantages of outsourcing is the streamlining of processes to attain business efficiencies and actionable insights. Smaller organizations can benefit tremendously from the economies of scale offered through outsourcing. Frequently, the cost is considerably lower compared to having the work completed in-house.
In conclusion, don’t fall victim to the most common myths of cloud outsourced accounting. Take the time to research the facts. Check out WVC RubixCloud at www.wvcrubixcloud.com and learn how we can be the game changer for your organization!
By: Jennifer Kinzel, CPA, CMA, MBA