Charitable Organization Audit Charities Act Financial Report Registration Statement

Published: Feb 14, 2018
By: Brian C. Collins
Topics: Tax
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Governor Wolf signed two bills, Act 71 (“HB1420”) and Act 72 (“HB1421”), into law on December 22, 2017. Both Acts amend the Solicitation of Funds for Charitable Purposes Act (“Charities Act”) to affect several important Pennsylvania Department of State Bureau of Corporations and Charitable Organizations (“Bureau”) processes. Both Acts become effective 60 days from the date they are signed by the Governor, which is February 20, 2018.

HB 1420 amends the Charities Act to raise the thresholds for when an audit, review or compilation of the financial reports is required to be submitted by charitable organizations that are registered under the Charities Act. The following table summarizes the gross annual contributions thresholds for an audit, review or compilation of the financial reports

Type of financial statements required	Gross annual contributions under current Charities Act	Gross annual contributions under Act 71 effective February 20, 2018
Audit	$300,000 or more	$750,000 or more
Audit or review	$100,000 to less than $300,000	$250,000 to less than $750,000
Audit, review or compilation	$50,000 to less than $100,000	$100,000 to less than $250,000
Audit, review, compilation or internally prepared	Less than $50,000	Less than $100,000

HB 1421 clarifies that annual registration statements for charitable organizations must be renewed annually and the timely submission is based on the postmark date instead of the date received at the Bureau. This change will put the Bureau in line with the IRS, which goes by postmark date for timeliness in filing taxes. This change should help charitable organizations comply with registration deadlines and eliminate late filing fees.

Reference and resource links:
Act 71 (HB1420)
Act 72 (HB1420)
Charitable Organization Registration Statement - BCO-10 (rev. 8/2017)
BCO-10 Instructions

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Brian C. Collins

Brian Collins is a Director of outsourced finance and accounting, with more than 20 years of public accounting experience, specializing in assisting business owners with monthly accounting, financial analysis, and other various accountings services.

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