Nonprofit Tax Help

David McRee, CPA

Become a Nonprofit Expert

The average CPA, attorney or tax preparer knows just enough about nonprofit tax compliance to be dangerous. I should know, because much of the work I do involves fixing the messes created by ill-informed, but well-meaning CPA's.

Where to start? Get yourself some good educational materials. These generally break down into the following categories:

  • IRS form instructions and publications (FREE).
  • IRS Stay Exempt web site (FREE).
  • General books about tax-exempt organizations suitable for the non-professional (low cost).
  • Law Books (expensive, but worth it).
  • Technical Manuals (expensive, but essential)
  • Continuing Professional Education Courses for licensed professionals (great for breaking into new areas). Self-study is great for topics you're already familiar with, but live courses are recommended for unfamiliar topics.

Here's a list of resources that I use in my practice, many of which I consult on a weekly basis: 

The Law of Tax-Exempt Organizations (Wiley Nonprofit Authority) by Bruce Hopkins is my main go-to guide when I need to answer a question of tax law that is not covered in the basic IRS form instructions and publications. My copy is dog-eared and torn. It's not cheap, but mine has paid for itself a thousand times over. One of the handiest uses is that it directs me to court cases and IRS Revenue Rulings and is especially helpful when preparing Form 1023. This book should be the cornerstone of your nonprofit library.
Nonprofit Organizations, Cases and Materials, 4th (University Casebook Series) by Fishman & Schwarz is a university textbook that covers nonprofit tax law using case law studies. You get the historical and legal context of various laws and doctrines that are the basis for qualifying as a nonprofit and for operating in a manner that continues to qualify. It's not hard to read, and you can sometimes pick up a copy used on Amazon (but it will probably be fairly well marked up with a highlighter).

How to Form a Nonprofit Corporation by Anthony Mancuso. This NOLO Press guide explains the nuts and bolts of forming a nonprofit corporation under state law. It is suitable for professionals, but can be understood by non-professionals. Plenty of checklists, forms, definitions and other resources back up a comprehensive text. Even if you aren't involve in the actual formation, this is stuff you need to know. Forming a California Nonprofit? Click here.

Private Foundations: Tax Law and Compliance (Wiley) By Bruce Hopkins. If you do any work with private foundations that are not public charities, this book is a must, since private foundations are subject to different and more onerous rules as well as annual distribution requirements. If you buy this, be sure you purchase the most recent Cumulative Supplement along with it so you'll have the most recent updates.
Wiley Not-for-Profit GAAP 2014 This reference deals with interpretation and application of Generally Accepted Accounting Principles for nonprofits. Whether you're involved with auditing nonprofits or just handling their tax matters, it's a good idea to be familiar with GAAP. Be sure to get the most recent edition. It's updated every year.

Below are some excellent nonprofit books I recommend for non-professionals (as well as for professionals) who need to learn about nonprofit tax compliance, fundraising, governance, and accounting with Quickbooks:


If you are a tax professional and prepare Form 990 and Form 990-EZ on a regular basis for client organizations, you should have in your library a copy of Clark Nuber's Form 990 Compliance Guide. This is a professional desk reference that will answer almost any question you will face when preparing even the most complicated returns and schedules. It does NOT cover Form 990-PF which is filed by private foundations, nor does it cover Form 990-T.

Another excellent resource is from Thomson Reuters. It is the PPC Form 990 Deskbook, which covers Form 990, Form 990-EZ, Form 990-T, and Form 990-PF. It is available as a printed book in a large and heavy three-ring binder, or is available on a DVD with an excellent search function. It is also available via web subscription. It is updated annually. Many preparers do not need the annual updates since very little changes from year to year in most cases. If you do not plan to purchase the updated volume each year, you should buy the printed manual. The  web subscription expires after one year. If you purchase the book on DVD and choose not to purchase the update after the first year, Thomson Reuters can and will disable the DVD you purchased.

The nonprofit sector is a great niche to specialize in, but there are others. Becoming a specialist in a tax consulting niche is one of the best ways to increase your profits because specialists provide more value to their clients.