As 2025 draws to a close, calendar-year nonprofit organizations face a critical window for strategic planning, financial review, and regulatory compliance. For accounting professionals and their nonprofit clients, this season offers an opportunity to ensure fiscal health and prepare for the year ahead. Here are some essential considerations to keep in mind:

Financial Reporting and Budgeting

• Review Year-to-Date Financials: Ensure all income and expenses are accurately recorded. Reconcile accounts and verify that restricted funds are properly tracked.
• Prepare Next Year’s Budget: Use historical data and projected funding to build a realistic budget. Factor in inflation, program expansions, and staffing changes.
• Assess Cash Flow: Evaluate liquidity and plan for any seasonal fluctuations in revenue or expenses.

Compliance and Threshold Triggers

One often-overlooked area is the impact of large bequests or year-end donations on regulatory thresholds. In particular:

• $2 Million Threshold for Audit Requirements: In many states, including California, charitable nonprofits that receive $2 million or more in gross revenue during the fiscal year may be required to undergo an independent audit. This includes bequests, even if they are one-time gifts.
• Planning Tip: If your organization is close to the threshold, consider timing of revenue recognition, donor communication, and whether the bequest is restricted or unrestricted. As your trusted accounting and business advisors, we can help you determine if the audit requirement will be triggered and what documentation will be needed.

Donor Stewardship and Gift Acknowledgment

• Send Year-End Acknowledgments: Timely and personalized thank-you letters help retain donors and fulfill IRS requirements for gifts over $250.
• Highlight Impact: Use newsletters or social media to show how donations have supported your mission this year.

Operational and Strategic Planning

• Review Governance Policies: Update bylaws, conflict of interest policies, and board resolutions as needed.
• Evaluate Program Effectiveness: Use metrics and feedback to assess which initiatives delivered the most impact.

Tax and Accounting Considerations

• Review Unrelated Business Income (UBI): Ensure any UBI is properly reported and taxed.
• Consider Year-End Purchases or Investments: If surplus funds exist, evaluate whether to invest in infrastructure, technology, or staff development before year-end.

As your trusted accounting advisors, we’re here to help you navigate these complexities and position your organization for success in 2026. If your charitable nonprofit is approaching the $2 million revenue mark or has received a significant bequest, let’s talk now to ensure compliance and avoid surprises.

If you’ve received a letter from the IRS or California’s Franchise Tax Board (FTB, for short), don’t panic—but don’t ignore it either. Two of the most common notices we see—IRS CP5071 and FTB 3912—are all about protecting your tax account. These notices are designed to protect you from tax fraud, and responding promptly can keep your refund on track and your records secure. Let’s break down what they mean and what to do next.

IRS Notice CP5071: Identity Verification Required

Why you received it: The IRS sends CP5071 (or its variants CP5071C or CP5071F) when a federal tax return has been filed using your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), and they need to verify that you actually filed it. This is often triggered by potential identity theft, but the IRS also conducts random checks to ensure the security of the tax-filing system.

What to do:

• If you filed the return: You must verify your identity so the IRS can continue processing it.
• If you didn’t file the return: Contact the IRS immediately—someone may be using your identity fraudulently.

How to respond:

• Visit the IRS Identity Verification Service at idverify.irs.gov and follow the instructions.
• Alternatively, call the number listed on your notice. Be prepared with:
  • The tax return in question
  • A prior year’s return (if available)
  • Your current mailing address

Why it matters: Failure to respond can delay your refund or prevent the IRS from processing your return altogether.

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FTB Notice 3912: Confirming Your Authorized Representative

Why you received it: FTB 3912 is a new letter issued by the California Franchise Tax Board to confirm whether a tax professional or other representative listed on your account is still authorized to act on your behalf. This notice is part of FTB’s effort to maintain accurate records and prevent unauthorized access to taxpayer information.

What to do:

• Review the representative(s) listed in the notice.
• If the authorization is still valid, no action is required.
• If the representative is no longer active or authorized, follow the instructions in the notice to revoke or update the authorization.

How to respond:

• Log in to your online MyFTB account to view, edit, or revoke your POA Declaration(s).
• Call the FTB at 1-800-852-5711 and reference the associated Declaration ID number.
• Send the FTB a completed FTB 3520 RVK, Power of Attorney Declaration Revocation.

Why it matters: Keeping your authorized representative list current helps protect your tax data and ensures that only authorized individuals can communicate with the FTB on your behalf.

Losing someone close is never easy. Amid the emotional toll, there are also practical matters that must be addressed—many of which involve financial and legal responsibilities. As your trusted tax and accounting advisors, we want to help ease this burden by outlining key steps to take after a death, especially when it comes to managing bank accounts and accessing funds.

First Steps: Legal and Administrative Essentials

Before you can act on behalf of the deceased, certain documents and procedures are required:

• Obtain multiple copies of the death certificate. You’ll need these for banks, insurance companies, government agencies, and more. Most of these entities will make a copy and return the original to you, so you may need five or fewer certified copies of the death certificate.
• Locate the will (if one exists) and/or the trust documents, if applicable. These documents will name the executor or fiduciary—the person(s) legally authorized to manage the estate.
• File for probate if necessary. Probate is the legal process of validating the will and granting the executor authority to act. Some assets may pass outside probate, such as jointly held accounts or those with named beneficiaries.

Bank Accounts: What Happens and What You’ll Need

Bank accounts are typically frozen upon notification of the account holder’s death. Here’s what to expect:

Individual Accounts

• Frozen immediately once the bank is notified.
• Access requires legal authority, usually through probate.
• The executor or fiduciary must present:
  • A certified death certificate
  • Proof of identity
  • Court-issued Letters Testamentary (or Letters of Administration if there is no will)

Joint Accounts

• Often remain accessible to the surviving account holder.
• The bank may still require a death certificate to update records.

Payable-on-Death (POD) or Transfer-on-Death (TOD) Accounts

• Bypass probate and go directly to the named beneficiary.
• Beneficiary must provide:
  • Death certificate
  • Valid ID
  • Possibly a claim form, depending on the institution

Other Financial Considerations

• Notify Social Security to stop benefits and inquire about survivor benefits.
• Contact insurance companies to file claims.
• Review outstanding debts and notify creditors.
• Secure digital assets, including online banking and investment accounts.
• Meet with a tax advisor to discuss final income tax returns and potential estate tax filings. Settling the decedent’s financial affairs may require additional filings, and a tax professional can provide valuable assistance.

We’re Here to Help

Navigating the financial aftermath of a loved one’s death can be overwhelming. Our compassionate and highly experienced team is available to guide you through estate administration, tax filings, and financial planning for the future. If you’ve recently lost a loved one or are simply planning ahead, professional support matters.  Call us to book a consultation.  

Big changes for 2025 tax planning and beyond!

While you have probably heard a lot about the new tax law, the One Big Beautiful Bill Act (OBBBA) whether you consider it to be a good thing or a bad thing, it is time to concentrate on figuring out how it is going to affect you.  Even if you have never considered tax planning before, now you should probably consider it.

The new tax law has been talked about as having “extended the tax rules in the TCJA of 2017,” which is largely true, but there are quite a few new provisions which may affect your taxes going forward and could influence your decision-making.

One new provision you should be aware of is the new itemized deduction reduction for high-net-income taxpayers.  If you and your spouse earn more than $1 million in taxable income, a new rule could reduce the amount you’re allowed to deduct on your tax return. The IRS will reduce your itemized deductions by whichever is smaller:

• About 5.4% of your total deductions before the rule kicks in, or
• About 5.4% of your taxable income before the rule applies.

The tricky part? The calculation seems to loop back on itself, which might make it harder to figure out exactly how much you’ll lose in deductions. We’ll have to see how the IRS implements this new provision.

Another new provision now limits how much you can deduct for charitable contributions if you itemize your deductions. Specifically, the IRS will subtract 0.5% of your income from the total amount you claim for charitable contributions on Schedule A of your tax return—similar to how medical expense deductions work.

But there are exceptions:

• Donations made directly from your IRA aren’t affected by this rule.
• If you don’t itemize and instead take the standard deduction, you can still claim up to $1,000 ($2,000 for married couples) in charitable contributions without this limitation.

This change could make tax planning more complicated. For example, giving directly from your IRA (up to $108,000 allowed) lowers your adjusted gross income (AGI), which in turn reduces the threshold—or “floor”—used to calculate both your charitable and medical expense deductions.

The news isn’t all bad, though.  The state and local tax (SALT) deduction  limit was raised from $10,000 to $40,000, but the increase from $10,000 to $40,000 phases out between $505,000 and $606,333 of Adjusted Gross Income, and the amount which is deductible for taxpayers reporting AGI over $606,333 is limited to $10,000, the SALT limit since 2017.  The ability to pay state taxes on “pass-through income” has been retained under the new law. This significantly reduces taxes for anyone who receives income from partnerships and S-Corporations (even if through trusts), which elect to pay your state taxes through the entity. This applies even for those with Adjusted Gross Income higher than $500,000. 

In addition, the new tax law retains the lower income tax rate structure put in place in 2017. The exemption amount for transfers as gifts or through estates has been permanently increased to $15,000,000 ($30,000, 000 for married couples), with additional increases linked to annual CPI increases.  What makes it “permanent” is that unlike the increase in the 2017 tax act, the increased exempt amount does not “sunset” = automatically disappear at some point in the future. In addition, Social Security recipients are now allowed to deduct $6,000 from the reportable amount.

Changes unrelated to the new tax law now affect when and how you must handle accumulated retirement plan assets, which can significantly impact your tax planning strategies.

Let’s talk about how these tax changes could impact your planning strategies—and how to make the most of them moving forward.  Call today to book a session with one of our expert tax advisors.

Safeguard Your Finances During the Season of Spending

The holiday season brings joy, generosity—and unfortunately, a surge in fraud. With online shopping at an all-time high and year-end spending in full swing, cybercriminals are more active than ever. For individuals and businesses alike, vigilance is essential to avoid falling victim to scams that can lead to financial loss, reputational damage, and regulatory headaches.

Why Fraud Spikes During the Holidays

• Increased Transaction Volume The sheer number of purchases creates more opportunities for fraudsters to slip through unnoticed.
• Urgency & Distraction Shoppers are rushed, distracted, and less likely to scrutinize suspicious emails or websites.
• Targeted Scams Fraudsters exploit seasonal trends with fake promotions, counterfeit gift cards, and phishing emails disguised as shipping updates or holiday deals.
• AI-Driven Threats Synthetic identity fraud and deepfake scams are on the rise, with criminals using advanced technology to mimic legitimate businesses.

Fraud Prevention Tips for Individuals

• Shop Only on Trusted Sites Stick to well-known retailers and verify URLs before entering payment information.
• Avoid Public Wi-Fi for Transactions Use secure, private networks when shopping or accessing financial accounts.
• Watch for Phishing Emails Be cautious of messages claiming to be from delivery services or retailers. Look for misspellings, urgent language, and suspicious links.
• Monitor Your Accounts Check bank and credit card statements regularly for unauthorized charges. Even a small charge you don’t recognize may indicate a compromised account.  Fraudsters will ‘test the waters’ by charging a small amount.  If the cardholder doesn’t notice or flag it, the fraudster will try a much larger charge.  If you don’t recognize a charge, contact your bank or credit card provider for assistance.
• Use Credit Over Debit Credit cards offer stronger fraud protection and easier dispute resolution.

Fraud Prevention Tips for Businesses

• Train Employees Educate staff on recognizing phishing attempts, fake invoices, and social engineering tactics.
• Secure Your E-commerce Platform Implement multi-factor authentication, real-time fraud detection tools, and SSL encryption.
• Vet Third-Party Vendors Ensure partners follow cybersecurity best practices—63% of breaches are linked to third-party vulnerabilities.
• Patch Software Promptly 82% of breaches involve known vulnerabilities that were left unpatched.
• Prepare an Incident Response Plan Having a plan in place can reduce recovery time and minimize damage if a breach occurs.

Holiday fraud is more than a seasonal nuisance—it’s a serious financial threat. Whether you’re shopping for gifts or closing out your business year, taking proactive steps to secure your data and finances is essential.

Maximize Retirement Contributions, Fulfill RMDs & Optimize Your Tax Position

As the year draws to a close, now is the time to take proactive steps to reduce your tax liability and strengthen your financial position. Whether you’re an individual investor, a business owner, or nearing retirement, year-end planning can make a meaningful difference. Below is a checklist of essential tasks to complete before December 31.

Required Minimum Distributions (RMDs)

If you’re age 73 or older (or inherited a retirement account), you’re required to take RMDs from:

• Traditional IRAs
• SEP IRAs and SIMPLE IRAs
• Employer-sponsored plans like 401(k)s

Key Points:

• RMDs must be taken by December 31, unless it’s your first year (then you may defer until April 1 of the following year).
• Failing to take your RMD can result in a 50% penalty on the amount not withdrawn.
• Consider Qualified Charitable Distributions (QCDs) if you’re 70½ or older—up to $100,000 can be donated directly to charity tax-free and count toward your RMD.

Maximize IRA & 401(k) Contributions

Traditional & Roth IRAs:

• 2025 contribution limit: $6,500 (or $7,500 if age 50+)
• Deadline: April 15, 2026, but contributing before year-end may help with planning and compounding

401(k), 403(b), and 457 Plans:

• 2025 contribution limit: $23,000 (or $30,500 if age 50+)
• Contributions must be made by December 31 to count for the current tax year

Planning Tip: Maxing out retirement contributions not only builds long-term wealth but also reduces taxable income if contributing to traditional accounts.

Other Year-End Tax Planning Tasks

1. Review Capital Gains & Losses

• Harvest losses to offset gains and reduce taxable income
• Be mindful of the wash-sale rule when repurchasing securities

2. Consider Roth Conversions

• Converting traditional IRA funds to a Roth IRA can lock in current tax rates
• Ideal for clients in lower-income years or expecting future tax increases

3. Evaluate Flexible Spending Accounts (FSAs)

• Use remaining balances before year-end or risk forfeiture
• Some plans offer a grace period or carryover—check with your employer

4. Make Charitable Contributions

• Donations must be made by December 31 to qualify for 2025 deductions
• Consider donating appreciated assets for additional tax benefits

5. Review Estimated Tax Payments

• Ensure sufficient payments to avoid penalties
• Consider making a fourth-quarter payment by January 15, 2026

Final Thoughts

Year-end tax planning is about more than compliance—it’s about strategy. Whether you’re optimizing retirement savings, managing distributions, or leveraging charitable giving, these actions can have a lasting impact on your financial health.

Need assistance? Our team is here to assist with personalized guidance to help ensure you’re making the most of every opportunity before the calendar turns.

“Debunking IRS Myths: What You Really Need to Know”

We’re excited to present the second of two free webinars led by our Tax Dispute Resolution Manager, Lori Rodrigues. With over a decade at the IRS as a Revenue Agent and Appeals Officer, plus years as a CPA helping clients resolve tax issues, Lori brings insider knowledge and practical expertise to taxpayers and business owners alike.

For Individuals: “Debunking IRS Myths: What You Really Need to Know” 

Think the IRS is out to get you? That you can’t negotiate your tax debt? Or that once you get a notice, it’s game over? Let’s set the record straight.

Join us at 11:30am on Oct. 29, 2025 for a myth-busting, eye-opening hourlong webinar designed to help individuals understand their rights, options, and the truth behind common IRS misconceptions.

What We’ll Cover:

• Top 10 myths about the IRS—and the facts that debunk them
• What really happens when you owe back taxes
• How to respond to IRS notices without panic
• Resolution strategies that actually work (and who qualifies)

Reserve your spot today by clicking the link below:
Debunking IRS Myths – What You Really Need to Know,
Wednesday, 10/29/2025, 11:30AM – 12:30PM

As the holidays approach, many of us start thinking about giving back. Whether it’s supporting your favorite local nonprofit, donating to your place of worship, or helping a cause you care deeply about, charitable giving is a tradition that feels good. But it can also make a meaningful difference on your tax return—if you plan it the right way.  Use the following guidelines to manage your charitable gifts during this season of giving. 

To be deductible on a federal return, charitable contributions must meet IRS criteria:

Qualified Recipients

• IRS-recognized 501(c)(3) organizations.  You can check eligibility by visiting IRS Tax Exempt Organization Search Tool:
  https://www.irs.gov/charities-non-profits/tax-exempt-organization-search
• Government entities, such as schools (if used for public purposes)
• Certain international organizations (under specific treaties)

Political groups and social clubs are generally not qualified charitable organizations.  If you’re giving through a crowd-funding platform such as GoFundMe, your donation would only be deductible if the recipient is a registered 501(c)(3) organization.

Eligible Donation Types

• Cash contributions (check, credit card)
• Non-cash assets (securities, digital currencies, real estate, vehicles)
• Volunteer-related expenses (mileage, supplies)
  Note: Time or services are not deductible.

Documentation Requirements

• Under $250: Bank record or receipt
• $250 or more: Written acknowledgment from the charity
• Over $500 (non-cash): IRS Form 8283
• Over $5,000 (property): Qualified appraisal required

Timing matters, as well: only contributions made before December 31st count for this year’s tax return. That means gifts made in January 2026 will apply to next year, not this one. If you’re thinking of donating, doing it now ensures your generosity works to your tax advantage this year.  

“Bunching” donations can help maximize current-year deductions. Since the standard deduction is fairly high, some taxpayers find it difficult to itemize and benefit from their giving each year. By combining multiple years’ worth of contributions into a single tax year, you may cross the threshold that allows you to itemize—and maximize your deduction. For example, if you’re already planning to donate to a particular charity in 2026, you can make the gift before the end of this year to boost your total 2025 giving.

Another strategy is to think beyond cash. Donating appreciated stock or other assets can give you a double benefit: you avoid paying capital gains tax on the appreciation, and you get a charitable deduction for the fair market value of the gift. That’s a win-win from both a tax and charitable giving perspective

Donor Advised Funds (DAFs) are another strategic and tax-efficient tool for charitable giving that can complement a client’s overall financial and estate planning. By contributing to a DAF, donors receive an immediate tax deduction while retaining the flexibility to recommend grants to their favorite charities over time. This allows clients to separate the timing of their tax deduction from their philanthropic decisions, making DAFs especially useful in high-income years or during liquidity events. DAFs offer a streamlined way to manage charitable contributions, reduce taxable income, and build a lasting legacy of giving—all while simplifying recordkeeping and compliance.

Charitable giving should always start with the heart—but when you add a little strategy, it can also be a powerful tax-saving tool.

If you’d like to review your options and make sure your generosity is working as hard for your taxes as it does for your favorite causes, let’s schedule a quick call. With the right plan, you can maximize both the impact of your gift and the benefit on your tax return. Here’s to giving in ways that matter—both now and for the future!

Your Q3 estimated taxes are due soon. And yes, we could remind you of the due date and tell you to double-check your numbers. But honestly? That’s not the conversation we should be having right now.

While everyone else is focused on paying their quarterly taxes, smart business owners are looking ahead—specifically at Q4.

September is more than just a deadline. It’s a pivot point.

You’ve got nine months of income, expenses, payroll, and cash flow behind you. And you’ve got just enough time left in the year to make strategic moves that could lower your tax bill, boost your profitability, or set you up for a stronger January.

This is the month to zoom out for a look at the big picture. Instead of just asking, “Did I pay enough in estimated taxes?” ask:

• Am I on track with income goals—or did I quietly blow past them in Q2?
• Are there planned purchases or investments I can make before year-end to lock in deductions?
• Have I reviewed my payroll strategy to see if I need to adjust owner compensation or bonuses before December?
• Am I properly documenting everything I want to deduct—or will I be stuck guessing at tax time?
• And maybe most important of all: have I set myself up to keep more of what I earn?

Quarterly taxes are just a small part of the larger picture. They reflect how your business is performing—but they don’t help you control the outcome. That’s where planning comes in.

Too often, we see business owners get blindsided in January. They assumed everything was fine because they paid their quarterly estimates. But when we finally dig into the books, we discover missed opportunities. Missed write-offs. Missed timing strategies. And in some cases? A much larger tax bill than expected—because no one sat down to do a real projection before the year ended.

Let’s not do that this year.

If you’re already paying estimated taxes, you’re ahead of the game. But let’s not stop there. Let’s use this moment to shape what your Q4 looks like—not just file reports about what happened after the fact.

September and October are great times to look at the big picture and make sure you’re on track with your end-of-year tax strategy.  As, your trusted advisor, Dillwood Burkel & Millar can help – call today to schedule a year-end tax-planning consultation.

As your trusted accounting advisors, we’re not just here to help you file taxes and balance books—we’re here to protect your financial well-being. Fraudsters are becoming more sophisticated, targeting individuals and small businesses alike with schemes that can jeopardize your hard-earned money and sensitive data.

Here’s what you need to know to stay one step ahead.

The Most Common Scams Affecting Our Community

1. Tax Scams

Scammers impersonate IRS agents or tax professionals, threatening audits or demanding payment.

• What to Watch For: Calls or emails demanding immediate payment, threats of arrest, or requests for personal info.
• Our Advice: The IRS will never call or email you to demand payment. Always verify with us before responding.

2. Business Email Compromise (BEC)

Hackers pose as vendors, executives, or employees to redirect payments or steal data.

• What to Watch For: Sudden changes in payment instructions, unfamiliar email addresses, urgent requests.
• Our Advice: Confirm payment changes by phone. Use multi-factor authentication and secure email practices.

3. Phishing & Identity Theft

Emails or texts mimic banks, payroll providers, or even accounting firms to steal login credentials.

• What to Watch For: Misspelled URLs, unexpected attachments, or requests for login info.
• Our Advice: Never click suspicious links. Contact us directly if you’re unsure about a message.

4. Investment and Retirement Scams

Fraudsters offer “guaranteed” returns or push unregistered investment opportunities.

• What to Watch For: Pressure to act fast, secrecy, or too-good-to-be-true promises.
• Our Advice: Consult with us before making any major financial moves. We’ll help vet opportunities.

5. Payroll and Employee Fraud

Scammers target payroll systems or impersonate employees to reroute direct deposits.

• What to Watch For: Requests to change bank info via email, unusual login activity.
• Our Advice: Use secure HR platforms and verify changes with a phone call or in-person confirmation.

Smart Habits for Financial Safety

• Keep Software Updated: Outdated systems are vulnerable to breaches.
• Use Strong Passwords: And change them regularly—especially for financial accounts.
• Review Statements Regularly: Spotting fraud early is key to minimizing damage.
• Lean on Us: If something feels off, reach out. We’re here to help you assess and respond.

Final Thoughts

Fraud prevention isn’t just about caution—it’s about confidence. With our team as your partner, you can navigate financial decisions with clarity and peace of mind. Let’s keep your finances secure, your data protected, and your future fraud-free.

If you’d like a personalized fraud risk review or want to learn more about secure financial practices, contact us today.