House Tax Bill Would Significantly Affect Charities

National organizations say it would reduce incentives for charitable contributions

The “Tax Cuts and Jobs Act” (H.R.1) introduced by the Republicans in the House of Representatives contains a series of specific provisions that would affect charitable organizations but has drawn most of its criticism from national charitable organizations for its apparent impact in reducing the economic incentives for charitable giving and for partially repealing the “Johnson Amendment” to permit churches to engage in political activity.

Membership nonprofit lacks associational standing

A nonprofit membership organization including more than 700 prison inmates lacks associational standing to bring suit alleging Constitutional and statutory violations from use of excessive physical force in a state “medical unit.”   In a non-precedential decision, the Fifth Circuit Court of Appeals has affirmed a trial court decision dismissing the nonprofit from the case.

No termination for refusing to sign confidentiality statement

An employer may not fire an employee who refuses to sign an illegal confidentiality statement, the Second Circuit Court of Appeals has ruled.  It has affirmed a National Labor Relations Board order requiring reinstatement of an employee who refused to sign a confidentiality statement saying he wouldn’t discuss the terms and conditions of his employment or answer questions from the media about the workings of his employer.

Club Can’t Compel Arbitration Based on Notice on Back of Renewal Form

Court finds member had no actual notice of requirement to arbitrate disputes with organization

An appellate court in California has affirmed a trial court decision refusing to compel arbitration of a breach of contract, fraud and defamation claim brought by a member against the American Contract Bridge League.  The Court had held that the member had no knowledge of the requirement to arbitrate that was included on the back of his annual membership renewal form.

Parent-child centers qualify for tax exemption

The City of Rutland, VT, has lost its argument that a pair of parent-child centers offering a variety of state-funded programs for new and prospective parents and for families with small children should not be eligible for real estate tax exemption.  The City argued that they do not serve an “indefinite class” of beneficiaries and confer a benefit on the public as a whole.  The Supreme Court of Vermont has affirmed a trial court decision rejecting the claim and granting exemption for the parcels.