Remember that unpaid internship you were so lucky to snag in college? Well, according to both a federal judge in Manhattan and the US Department of Labor (“DOL”) that coffee-delivering-foot-in-the-door opportunity may have violated the Fair Labor Standards Act and entitle you to compensation. But what if you worked for a nonprofit?
In general, 1023 exemption applications are processed in the order of receipt by the IRS, and expedited processing is available only if there is a “compelling reason” for it. There are reports that over 80% of requests for expedited processing are denied. If the organization needs its determination letter in a hurry because of circumstances that are within its control, the IRS is not likely to feel that the situation justifies expedited handling.
To better coordinate their philanthropy, many companies choose to create corporate foundations to organize, focus, track, and publicize their philanthropic efforts.
Just released this month, the Arizona Corporation Commission now offers annual report email reminders for entities incorporated in Arizona; all you have to do […]
In an effort to make applying for tax exemption easier, the IRS Exempt Organizations (EO) office is developing an Interactive Form 1023, Application for Recognition of Exemption (“i1023”).
Just a few months ago, we were still telling clients to expect the process to take approximately one year. Now we are telling clients to prepare to wait two full years before they receive a determination letter.
Nonprofit corporations are often faced with tough decisions about their future. For a variety of reasons, a nonprofit’s board may determine that dissolution is the best answer. Causes range from dwindling resources to a reduction in the need for the nonprofit’s services. Should the Board determine that dissolution is the best option for a nonprofit, there are business and legal steps that must be taken to properly wind down and dissolve the nonprofit.
On June 13, 2013, the Senate Finance Committee released a cooperative, bipartisan report comprised of suggestions on how (and why) to change government regulations on tax-exempt/nonprofit organizations and on the rules of charitable giving. The Committee’s Report set forth a number of issues that need to be addressed in the nonprofit and charitable giving arena, and offer a number of potential solutions.
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.
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.
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.
From time to time we see nonprofit clients adding employees in states in which they haven’t operated before. Often it is just one employee, perhaps a development person working from their home or a shared workspace. Although hiring an employee in another state may not seem like a significant event, many businesses don’t realize that it triggers several compliance obligations.
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.
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.
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.
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.
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.
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.
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.
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.