December 4, 2024
The following is a revised Regulatory Update that includes revisions to an earlier update sent on Thursday, November 21, 2024.
SUMMARY: The Illinois Attorney General Charitable Trust Bureau adopted Administrative Rules implementing Public Act 103-121, which increases the charity audit threshold from $300,000 to $500,000. The act and corresponding rules provide for a financial statement review for charities that raise $300,000 but no more than $500,000.
• Solicitation for Charity Act - (14 IAC 400; 48 Ill Reg 6330) effective 10/29/24 @ 48 Ill Reg 16061)
• Charitable Trust Act - (14 IAC 480; 48 Ill Reg 6390) effective 10/29/24 @ 48 Ill Reg 16115
BACKGROUND: Solicitation for Charity Act - The rulemaking changes the thresholds for annual reporting and audit/financial review requirements for organizations that conduct charitable fundraising. Organizations that received more than $300,000 but no more than $500,000 (previously, $150,000) in contributions during the organization’s fiscal year must file the Attorney General’s required reports, fees, and a financial statement review by a certified public accountant (CPA). Organizations that received more than $500,000 in contributions during the organization's fiscal year must file the Attorney General's required reports, fees, and audited financial statements. The audit threshold of $25,000 for charitable organizations who use the services of a paid professional fundraiser has not changed.
• Requests for 60-day extensions of time to file reports will be automatically granted to organizations in compliance with the Act if the Attorney General receives them by the organization’s due date.
• The rulemaking also replaces the written report forms contained in appendices to the part with links to electronic forms at the Attorney General’s website.
• Submission of financial statements is no longer required with the second extension request.
• A request to extend the Attorney General's deadline to match the federal extension deadline must be made in writing and state specifically that the extended due date is being requested, and that request must be accompanied by IRS Form 8868. The extension request does not need to include financial statements.
The Charitable Trust Act clarifies various aspects of charitable trust registration. The rulemaking replaces written financial report forms with links to electronic forms; automatically grants 60-day extensions upon written requests to trusts that are in compliance with the act and request more time to file their financial reports; and clarify who must sign financial reports. Changes since first notice remove a requirement to submit a schedule of assets and investments and a financial statement.
CONCLUSION: The Illinois CPA Society worked with a broad-based coalition, the Office of the Attorney General and the General Assembly, to pass Public Act 103-121. The ICPAS Non-Profit Committee provided extensive technical support to the General Assembly and the Attorney General’s Charitable Trust Bureau in the passage of legislation. The committee also provided technical comments to the Office of the Attorney General during the Administrative Rules comment period.
PRO TIP: CPAs and not-for-profit financial officers are encouraged to review the hyperlinked adopted agency rules for specificity and clarity. The Charitable Trust Bureau of the Illinois Attorney General also posted an updated summary on the agency website. “Reviewed Financial Statement” is defined in section 1(o) of the Solicitation for Charity Act.