The One, Big, Beautiful Bill (OBBB) enacted in 2025 significantly expanded the application of the excise tax on excess compensation paid by tax-exempt organizations. On June 5, 2026, the Department of the Treasury and the Internal Revenue Service issued Notice 2026-36 announcing intent to issue proposed regulations addressing this expanded tax . For nonprofit organizations in Virginia and across the country, understanding these changes is essential for compliance and governance. What Has Changed Previously, the excise tax on excess compensation applied only to the five highest-compensated employees of an applicable tax-exempt organization (ATEO) for the tax year . Under the OBBB, the tax may now apply to any employee with compensation exceeding $1 million in a tax year or receiving an excess parachute payment . Expanded Definition of Covered Employee Notice 2026-36 clarifies that the amended definition of covered employee, which will be addressed in forthcoming proposed regulations, includes two categories : Any individual who was an employee of an ATEO in any tax year beginning after December 31, 2016, and on or before December 31, 2025, if the individual was a covered employee for the tax year under prior law; and Any individual who is an employee of an ATEO in any tax year beginning after December 31, 2025 (unless a covered employee exception applies). Important Exceptions The notice also sets out important exceptions for individuals who provide volunteer services to tax-exempt organizations that could otherwise be impacted by the OBBB changes . Specifically, it allows ATEOs and their related organizations to rely on the limited hours and nonexempt funds exceptions to the post-OBBB definition of covered employee until further guidance is issued . What Nonprofits Should Do Now Treasury and the IRS anticipate that forthcoming proposed regulations will include covered employee exceptions for limited hours and nonexempt funds . The proposed regulations are not expected to apply to tax years beginning before the issuance of final regulations. Organizations should review their compensation practices and identify any employees who may be affected by the expanded definition. Comments on all aspects of Notice 2026-36 and any other issues that should be addressed in the forthcoming proposed regulations are due by August 4, 2026 . IRS Chief Executive Officer Frank J. Bisignano stated: “The new law strengthens the accountability of tax-exempt organizations by expanding tax compliance requirements for certain organizations paying excessive compensation and excess parachute payments to their executives” . For more information, see the IRS One, Big, Beautiful Bill Provisions . At Nova Tax & Accounting Services , our Form 990 preparation and nonprofit compliance services help organizations navigate these new requirements. Schedule your free consultation to discuss how these changes affect your organization.

A financial audit provides independent, objective assurance that an organization’s financial statements are accurate and comply with Generally Accepted Accounting Principles (GAAP). For nonprofits in Ashburn and across Northern Virginia, regular audits build donor confidence, satisfy grant requirements, and demonstrate accountability to stakeholders. Why Nonprofits Need Financial Audits Many nonprofits are required to have financial audits based on their size, funding sources, or governance requirements. Audits provide: Credibility with donors and grantors – Major donors and foundations often request audited financial statements before making significant gifts Compliance with grant requirements – Federal grants often require Single Audits (Uniform Guidance) for organizations expending $1 million or more in federal awards Board oversight – Independent audits help boards fulfill their fiduciary responsibilities Fraud detection – Audits examine internal controls and can identify weaknesses or irregularities The Audit Process A financial audit involves an independent CPA examining an organization’s financial records, internal controls, and compliance with applicable laws and regulations. The auditor issues an opinion on whether the financial statements are presented fairly, in all material respects, in conformity with GAAP. The audit opinion can be: Unmodified (clean) – The financial statements are presented fairly Qualified – Except for specific issues, the financial statements are presented fairly Adverse – The financial statements are NOT presented fairly Disclaimer – The auditor could not complete the audit Single Audits for Federal Grant Recipients Nonprofits that expend $1 million or more in federal awards during a fiscal year are required to undergo a Single Audit (also called a Uniform Guidance audit). This examines internal controls over federal programs and tests compliance with specific grant requirements. Preparing for a Financial Audit Organizations can prepare for their audit by: Maintaining clean, up-to-date books throughout the year Documenting all internal controls and policies Reconciling all bank and investment accounts monthly Retaining supporting documentation for all transactions Conducting a pre-audit self-assessment Choosing an Audit Firm When selecting a CPA firm to conduct your nonprofit audit, consider: Experience with nonprofits – Nonprofit accounting has unique requirements (fund accounting, restricted net assets) Familiarity with your size – Small and large nonprofits have different audit needs Understanding of grant compliance – If you receive federal funds, ensure the firm has Single Audit experience At Nova Tax & Accounting Services , our audit and assurance services are tailored specifically for nonprofit organizations. We help you prepare for audits and maintain financial transparency. Schedule your free consultation to discuss your audit needs.

Understanding Virginia tax deadlines is essential for residents and businesses in Ashburn and across the Commonwealth. Virginia has unique filing dates that differ from federal deadlines, and missing them can result in penalties and interest. Individual Income Tax Deadline According to the Virginia Department of Taxation , most individuals must file their tax return by May 1 . This is a unique two-week buffer after the federal April 15 deadline. For fiscal year filers, returns are due the 15th day of the 4th month after the close of your fiscal year . If the due date falls on a Saturday, Sunday, or holiday, you have until the next business day to file with no penalty . Automatic Extension Virginia allows an automatic 6-month extension to file your return (November 1 for most people) . No application is required. However, you still need to pay any taxes owed on time to avoid additional penalties and interest . Estimated Tax Deadlines If you need to pay estimated taxes, deadlines are available on the Individual Estimated Tax Payments page of the Virginia Tax website . Federal Tax Deadlines For the 2025 tax year, most individual taxpayers must file federal returns by April 15, 2026. The IRS provides toll-free telephone assistance and has local Taxpayer Assistance Centers . Before going to a taxpayer assistance center, you should call and schedule an appointment . Where to Mail Virginia Tax Returns The Virginia Department of Taxation provides specific mailing addresses: Tax Payments: Virginia Department of Taxation, Processing Services Division, P.O. Box 760, Richmond, VA 23218-0760 Tax Refunds: Virginia Department of Taxation, Processing Services Division, P. O. Box 1498, Richmond, VA 23218-1498 Virginia Estimated Payments: Virginia Department of Taxation, Processing Services Division, P. O. Box 1478, Richmond, VA 23218-1478  Make checks or money orders payable to the Virginia Department of Taxation. To pay by credit card, go to the Virginia Department of Taxation website . Special Virginia Filing Situations Nonresidents with Virginia income – If you live in another state but have rental property and/or business income from Virginia, file Virginia Form 763, a nonresident tax return . Part-year residents – If you moved into or out of Virginia during the year, file Virginia Form 760PY, a Virginia part-year resident return . Retirees – If you’re retired and don’t have Virginia withholdings taken out of your retirement income and want the income covered for Virginia taxes, file Virginia Form 760ES (estimated tax form) or contact the Virginia Department of Taxation at 804-367-8031 . Business Tax Deadlines The Virginia Department of Taxation offers electronic filing options for businesses through its Web Upload system, available 24/7 . Businesses can file Sales/Use Tax, Withholding Tax, and Forms W-2, 1099-R, 1099-MISC, and VK-1 through this system . Taxpayer Rights The Taxpayer Bill of Rights is available on the IRS’s website . The IRS also provides a Taxpayer Advocate Service with problem resolution personnel to address taxpayer complaints that cannot be resolved through regular channels . At Nova Tax & Accounting Services , our expert tax solutions team helps Virginia taxpayers meet all filing deadlines. Schedule your free consultation to ensure you stay compliant.