Article Archives >> To the Point

Our 501(c)(3) organization is going to be dissolved.  We are in a small town and have tried to raise funds to stay afloat and keep the doors open to needy families, but the economy and lack of funding has made this impossible.  The organization owes back payroll taxes.  Are the board members liable for the debt?

The IRS takes a dim view of organizations that fail to turn over their withholding taxes, not only because the organization has failed to meet its own financial obligation, but also because it has diverted (some might say stolen) funds from the employees, part of whose pay has been withheld as their personal contribution to Social Security and Medicare.  Although the corporate form normally insulates directors from personal liability for organizational debts, the federal tax law provides that a person “responsible” for failing to pay over the required funds may be personally liable for the obligation.  The IRS can look long and hard to find a responsible person with the funds to make the payment.  Insurance usually excludes coverage for a tax claim so it is important to try to work out a deal for payment with the IRS.

Some states are also vigorous in pursuing unpaid withholding taxes. 

It is tempting to fail to make withholding payments when there is a cash flow problem and needy families to help.  But it entails personal financial risks that are not pleasant to contemplate.

12/22/2010

Article Archives >> To the Point

Top 10 Legal Issues in Fundraising Events:
Avoiding financial and public relations disaster


Pre-recorded Webinar -
Listen Today

Charity fundraising event planners have to worry not only about the invitation list, the menu and the program. They also have to worry about a host of legal issues that, if ignored, could turn the event into a financial and public relations disaster. This webinar will explore the top ten areas of legal concern for a charity’s annual gala dinner dance, bikathon, day in the park, or other special fundraising event. Learn more in our pre-recorded webinar.

Receive the weekly question by e-mail

Sign up and receive FREE:

Weekly question and answer

Notice of each full edition
and its free stories

Report on 501(c)(3) electioneering

 

What our readers say about Nonprofit Issues

Once again you've tackled a tricky question and explained it so we all can understand the issue.--M.V.

Thank you for your informative and keen advice on nonprofit matters. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. --R.T.

 

Have a question?

If you can't find your answer, submit a question and Don will pick one question a week to answer online and to include in our weekly e-mail notice.

Other ways to
find answers:

Talk to the Editor
Next Conference Call:
Wednesday, November 5, 2014

Participate in this bi-monthly telephone seminar conference call and ask your questions directly to Editor Don Kramer.

Access the entire site
($9.95/24 hours, $17.95/3 months).


  Help

Nonprofit Issues Live
Full Day Program
A well-received full-day program that covers the current hottest topics in nonprofit law. Qualifies in Pennsylvania for Continuing Education credits.

Speaking Engagements
Don is available for programs and speaking engagements ranging from a one-hour presentation to a full-day primer on nonprofit law. Contact us if you are interested in having him speak at your program.


None of the information on the Nonprofit Issues Website should be deemed legal advice or
should be acted upon without prior consultation with appropriate professional advisors.
Materials prepared by Nonprofit Issues contained in these pages is copyrighted by Nonprofit Issues, Inc., 2009-2012.

Home | Article Archives | Ready Reference | Ask the Editor | Bookstore | About Us

Change Profile/Password
Subscribe or Renew

Free E-notice

Nonprofit Issues, Inc.
P.O. Box 482
Dresher, PA 19025
(215) 542-7547 FAX (215) 542-7548
1-888-NP-Issue

E-mail Us