A major advantage nonprofit corporations have over other forms of charitable entities is if a nonprofit corporation is properly managed and operated, it can provide a greater degree of personal liability protection to its directors and officers. … Read the full article
Tips for Nonprofit Employers Outsourcing Payroll Duties
Many nonprofits outsource payroll processing as a cost effective way to handle their payroll compliance and human resource functions. We have seen several cases where unscrupulous payroll service organizations have taken advantage of nonprofits so the advice below is timely for our clients.… Read the full article
CLG is Proud to be a B!
We are often asked – what exactly is a B Corporation? B Corporations are a new kind of company that uses the power of business to solve social and environmental problems. You can think of a B Corporation certification as analogous to a Fair Trade or LEED certification, but for a business instead of a bag of coffee or a building.… Read the full article
Arizona Abolishes Solicitation Registration
Arizona House Bill 2457 repeals Arizona’s solicitation registration laws and does away with the need for Arizona charities to file annual Charitable Organization Registration/Renewal forms with the Arizona Secretary of State.… Read the full article
IRS Audits of Tax-exempt Entities
Although there are many reasons a nonprofit organization may be selected for an audit, several things heighten the chance of being selected. Things like irregularities on Form 990s, failure to file a Form 990, citizen complaints, having a relationship with another taxpayer currently being audited or receiving negative media attention can all increase your chance of being audited beyond the random internal IRS computer process.… Read the full article
Arizona Adopts the Benefit Corporation
Arizona recently passed benefit corporation legislation (SB 1238). Arizona joins fifteen other jurisdictions including California, New York and the District of Columbia that have already passed legislation. While the new law is not effective until December 31, 2014, the Arizona benefit corporation offers social entrepreneurs an important new option to consider when forming a new venture.… Read the full article
Risky Business – Using Unlicensed Images
A simple explanation of copyright law is that if you did not create it, get a license to use it, or purchase it, you are likely in violation of copyright law. Further, copyright infringement is a strict liability offense. If you use someone’s image without a license to use it, you infringe upon their copyright. This is so even if you paid a website designer or other third party and they posted the image without your knowledge.… Read the full article
Arizona Open Meeting Law Basics
We are often asked whether nonprofits must follow Arizona open meeting law (“OML”). Generally, nonprofits are not required to follow open meeting law; however, there are some exceptions – most notably charter schools. Charter schools are treated as public institutions for OML purposes because they are both funded with state tax dollars and are overseen by the state.… Read the full article
IRS Launches Compliance Check of 1300 Self-declared 501(c)(4),(5) and (6) Organizations
As the IRS Exempt Organizations division indicated in its 2013 work plan, it is conducting a compliance check of self-declared tax-exempt organizations. The IRS recently mailed over 1,300 questionnaires to self-declared Section 501(c)(4), 501(c)(5), and 501(c)(6) organizations. The project is part of the IRS’ plan to gather information about self-declared exempt organizations, determine whether self-declared exempt organizations are complying with applicable tax-exempt law, and increase voluntary compliance.… Read the full article
Top Ten Tips for Preventing Theft and Embezzlement
It seems like a new story breaks every week about a charity being exploited by an insider. Charities lose an estimate of 7%-13% percent of their annual profits to theft, embezzlement, or fraud, to the tune of approximately 40 billion dollars a year.… Read the full article
Obtaining Tax-exempt Status for Your Church
Religion is a charitable purpose and therefore many types of religious organizations qualify for tax-exempt status. However, a “church” is entitled to special privileges under the law.… Read the full article
IRS Unveils Temporary Expanded Worker Classification Settlement Program
t the end of 2012, the IRS introduced a voluntary classification settlement program (“Settlement Program”) to provide an incentive for employers with misclassified workers to comply.[1] The Settlement Program temporarily relaxes previous requirements and provides additional tax savings for those who qualify. … Read the full article
Better Safe than Sorry: Nonprofits’ use of Waivers, Releases and Disclaimers
Many nonprofits use some form of waiver or release in their programs. Typically, volunteers and participants are asked to assume the risk of participation and hold the organization harmless if they are injured. However, waivers and releases are not foolproof as many courts do not favor them. Still, they are often successful, and nonprofit organizations have nothing to lose in requiring them.… Read the full article
Charitable Solicitation Laws – Frequently Asked Questions
The major driving force behind becoming a tax-exempt nonprofit is the ability to solicit tax-deductible donations; yet, too many nonprofits planning to conduct any form of organized fundraising are unaware of their state’s registration laws. … Read the full article
Make it Your Business to Know if Your Corporation is “Doing Business”
An often overlooked aspect of corporate law is the concept of “doing business” in a particular jurisdiction. This determination comes into play when the corporation’s activities go beyond the borders of its home state or “domicile.”… Read the full article
Nonprofit Volunteers – Minimizing the Risks
Minimizing legal exposure is important because volunteers’ acts are generally imputed to the nonprofit organization. Specific, written volunteer policies and procedures are critical. Important components of a good volunteer program include clear and forward-thinking volunteer policies, thorough volunteer applications, screening, and management. … Read the full article
Best of CharityLawyer
Every year we like to take stock of our most popular posts to evaluate what our readers are finding most interesting and useful on the blog. What follows is a list of CharityLawyer’s top 10 posts for 2012 measured by page views:… Read the full article
403(b) Plans – Voluntary Correction Program Updated and Expanded
The IRS recently issued Rev. Proc. 2013-12 which updates its Employee Plans Compliance Resolution System. As anticipated, the new EPCRS allows plan sponsors to retroactively correct the failure to adopt a written plan document for a 403(b) plan by December 31, 2009.… Read the full article