New due date for filings and renewal fees for charitable organizations operating in Wisconsin

On April 9, 2014, the Wisconsin Department of Financial Institutions (DFI) issued a letter highlighting some major changes to the regulation of charitable organizations. These changes affect the charitable organizations’ registration process and certain filing requirements. It is important that charitable organizations operating in Wisconsin understand and comply with these changes or face automatic revocation of the organization’s charitable solicitation license.

Annual online renewal registration and fees

Each year any organization registered to solicit charitable contributions within the State of Wisconsin must renew with the DFI by August 1 and pay an annual renewal fee of $54 regardless of the organization’s year-end. Charitable organizations are now required to renew their license via an online registration system located on the DFI website. The online registration system is expected to be up and running by June 1. Although currently-registered organizations should receive a yearly reminder postcard from the DFI it is ultimately the organization’s responsibility to register and make timely payment.

There is a late payment period which extends from August 2 to September 30 that requires a late fee of $25 in addition to the $54 renewal fee. However, once the late payment period expires the organization’s solicitation license will be revoked for lack of payment and the organization will be required to re-apply for its license.

Therefore, Baker Tilly recommends renewing annually with the DFI online and paying the annual renewal fee by August 1 or at the latest by September 30 (with the additional $25 late fee) regardless of the year-end of the organization.

New, nine-month, filing due date for Forms 1952, 308, and 1943

DFI is requiring charitable organizations to file returns within a new nine-month due date period or be subject to automatic revocation of the organization’s charitable solicitation license. If this occurs, charitable organizations will need to re-submit the entire application for a new charitable solicitation registration (Form 296 and attachments) as well as the payment of late renewal fees and late filing fees.

As a reminder, the five -page Wisconsin Form 1952 must have a completed Form 990/990EZ attached. The seven-page Wisconsin Form 308, however, does not require the attachment of a completed Form 990/990EZ and may be the only option available if the organization cannot complete the Form 990/990EZ within the time frame discussed above. Where required, copies of the reviewed or audited financial statements must also be attached to each form. Organizations with less than $200,000 of contributions have 12 months to file.

Keeping pace with change

As discussed in a previous Baker Tilly tax alert regarding the passage of Wisconsin Act 20, the oversight of charitable organizations operating in Wisconsin was transferred to the DFI from the Wisconsin Department of Safety and Professional Services (DSPS). The (DSPS did not issue penalties or revocations of charitable solicitation licenses for filing the Wisconsin Forms 1952, 308, or 1943 after their stated six-month deadline. Nor did DSPS issue penalties or revocations for lack of payment for the required annual renewal fees.

Therefore, Baker Tilly recommends that all Wisconsin Forms 1952 and 308 be submitted by the DFI mandated nine-month due date to avoid the potential license issues mentioned above.

These recent changes demonstrate that the DFI will not adhere to the prior policies of DSPS. Baker Tilly’s tax specialists will continue to monitor Wisconsin’s evolving world of charitable organization regulation and keep you apprised of how any new rules affect you.

For more information on this topic, or to learn how Baker Tilly tax specialists can help, contact our team.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely.  The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.