There are 27 different types of non-profits in the Internal Revenue Service (IRS) code, but the most numerous categories are IRS 501(c)(3) corporations (charitable organizations) and IRS 501(c)(4) corporations (social welfare organizations).
When considering acquiring another nonprofit, there are two types of acquisitions that are typically considered – an asset purchase and a merger transaction. Several factors, including due diligence, payment of consideration, assumption of liability, assignment of contracts (including endowment agreements), existence of planned gifts, future operating goals and applicable state and federal laws, should be considered in determining the structure of the potential transaction.
Have you ever considered starting your own private family foundation? For those who have causes you are passionate about, creating a […]
Tax-exempt organizations must report changes to their name, address, changes to their articles and bylaws, and major operational changes to the IRS.
At the end of each year we like to review our most popular posts to see what our readers are most interested in.
All Boards make recruiting mistakes. They carefully vet and enthusiastically elect a new Board member. They hold an orientation, provide […]
An “unincorporated association” means a group of people who act together in a joint enterprise and for a common purpose.
Each year, the IRS Tax Exempt and Government Entities (TE/GE) division releases a letter outlining their work plan for the upcoming year. On October 3, 2018, the TE/GE issued their Fiscal 2019 Program Letter.
Familiarize yourself with the organization, its mission, and its effectiveness before giving. Always ask for information in writing – be wary if an organization will not provide information about charitable programs and finances upon request. Any legitimate organization will be happy to send you information. Check guidestar.org to review the organization’s financial data and learn more about its mission and finances. Understand that its common for scammers to set-up websites with confusing similar names to well-known charities to steal personal information from those trying to donate. Scammers are also known to set up fake GoFundMe accounts.
Increasingly, US NGOs seek to operate overseas. When a US nonprofit expands its activities across borders, whether by making grants or running programs, the compliance obligations of multiple countries can quickly become overwhelming.
In May 2018, the Arizona Corporation Commission released a major update to their website’s online services. Users can create an […]
The IRS has debuted a new and improved exempt organization search page. Previously, the public could use the IRS’ Select Check tool to lookup an organization by name or EIN. However, Select Check only permitted confirmation of an organization’s tax-exempt status and whether the organization was a public charity or private foundation.
A nonprofit’s board of directors is legally responsible for exercising the care an ordinarily prudent person in a like position would exercise in overseeing the organization’s operations. This includes the organization’s finances and legal compliance.
Fundraising to carry-out a nonprofit’s charitable purpose is necessary for the survival of the organization. However, holding a 501(c)(3) tax exemption does not give unlimited permission to fundraise. Many nonprofits are unaware of charitable solicitation laws within their own state much less other states where they may be asking for and/or receiving contributions.
The IRS has issued a new Form 1024-A, Application for Recognition of Exemption under Section 501(c)(4) of the Internal Revenue Code for an organization that chooses to apply for recognition of exempt status under Section 501(c)(4).
The IRS has revised Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions which went into effect January 10, 2018. The $275 1023-EZ user fee remains the same. The changes are designed to reduce filing errors and increase compliance with respect to those eligible to file Form 1023-EZ. Form 1023-EZ filers must now complete the following:
The IRS recently issued a favorable ruling for nonprofits looking to move their domicile from one state to another. Common reasons that nonprofits seek to change their state of incorporationinclude a change in physical location, increasing regulatory burdens, or a lack of meaningful connection to the original state of incorporation. In such cases,
he Tax Cuts and Jobs Act (HR 1 ) is on its way to the White House for President Trump’s expected signature before the weekend. The bill is set to bring about widespread changes to the US tax code for both businesses and individual Americans. However, it also impacts tax-exempt organizations.
Not every contribution to a charity qualifies for a charitable deduction. Charities that misunderstand the rules can lead donors astray when they offer tax receipts for non-deductible gifts inadvertently damaging donor relationships.
Nonprofits leaders often desire to move their nonprofit organization’s legal domicile from one state to another. Leadership may decide to move and wish to take the organization with them. In cases where the work is dispersed around the country, the organization may become frustrated with burdensome regulation in the state where it is domiciled and decide shop for a more favorable legal home.