First, the Bad News Recent reductions in the Arizona Corporation Commission’s budget are impacting nonprofit corporations doing business in Arizona in the following ways:
Increased Turn-around Time. The turn-around time for filings will likely increase over the next six to twelve months, with regular filings taking as much as 250 days to be processed and expedited filings [...]
Daily Dose of Nonprofit Law
Monthly Archives: October 2009
Arizona Corporation Commission Changes Impacting Nonprofit Corporations – Good News and Bad News
Nonprofit Law Jargon Buster – Public Support Test
Today’s Nonprofit Law Jargon Buster is a doozy so keep your hat on.
In the last Nonprofit Law Jargon Buster, we looked at the difference between a private foundation and a public charity. The default rule is that all 501(c)(3) organizations are private foundations unless they qualify as public charities. Private foundations are subject to [...]
Top 10 Smart Moves Great Nonprofit CEOs Make (From a Lawyer’s Perspective)
In addition to the governance and tax issues we deal with on a daily basis, there are a number of governance and legal distractions we tend to see repeated over and over again in the nonprofit community. The following list of smart moves are traits that CEOs of clients who successfully avoid these distractions tend [...]
Nonprofit Law Jargon Buster: Private Foundation v. Public Charity
Generally, ever since 1968, Section 501(c)(3) organizations have beendivided into two categories for tax purposes: public charities andprivate foundations.
Public Charities.Public charities generally depend on outside funding. Someorganizations, including churches, schools, and hospitals, are, bytheir very nature, considered “publicly supported.” Other organizationsmust pass one of two mathematical public support tests to qualify as apublic charity. [...]
IRS Releases New Video Series to Help Exempt Organizations Understand Redesigned Form 990 Requirements
The Internal Revenue Service has launched a new case study and video series to help exempt organizations and their tax preparers better understand the newly revised Form 990 series which must be filed for the 2008 tax year.
Nonprofit and Charity Law Jargon Buster – Non-profit vs. Tax-exempt.
When you visit your lawyer or C.P.A, do you feel like you have entered a foreign land where people speak in ambiguous terms and obscure numerical references? If so, you have experienced the mind numbing qualities of non-profit and charity law jargon. Those of us who practice non-profit law are all guilty of it. To [...]
Charity Raffles – Tread Carefully
As the recession deepens, we get more and more creative ideas from people wanting to conduct complex raffles. In Arizona, the most popular questions this year involve raffles of real estate. While raffles can be great revenue generators for charitable organizations, many charities do not realize that in most states, including Arizona, raffles are illegal gambling. Cautionary tales abound. Most states have specific exceptions for charitable raffles but require the charity and the raffle to meet specific criteria to qualify.
Top 15 Non-profit Board Governance Mistakes (From a Legal Perspective)
This list was started as the inaugural post to CharityLawyer Blog. The post struck a nerve, was mentioned by the Chronicle of Philanthropy, the Nonprofit Quarterly, and numerous bloggers and twitter users. San Francisco tax-exempt organizations lawyer and publisher of the Nonprofit Law Blog, Gene Takagi, reviewed the list and added five more governance mistakes [...]
Part III: Starting a Nonprofit in Arizona – Applying for Tax-Exempt Status
Forming a nonprofit corporation is not the same as being tax-exempt. To obtain 501(c)(3) status, newly formed entities must apply to the IRS for a formal determination of exemption. Entities seeking 501(c)(3) status apply by filing Form 1023. (Entities seeking exemption under other sections of 501(c) file Form 1024.)
Newly formed organizations applying for exemption face a chicken and egg dilemma. Form 1023 requests considerable detail regarding the charity’s planned programs and activities. The attitude of the IRS is that requiring applicants to articulate detailed plans is a small price to pay for the significant tax benefits associated with 501(c)(3) status.
