The due diligence process in considering a merger or affiliation is serious, but don’t let the lawyers use it to tell you why it shouldn’t be done. Lawyers are trained to tell you the risks. They will seldom provide the vision.
A charity that does not spend at least a portion of its time in advocacy work is probably not doing its job as well as it should.
Therefore, charities must understand the tax law definitions of "lobbying" and "legislation." There is a vast amount of advocacy that can be carried on without approaching tax limitations. Private foundations can support most of it, and preparing an application with foundation rules in mind can make it easier to get funded.
Tax law is not the only issue, however. Beware of federal and state lobbying registration requirements, with different definitions, and different reporting.
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Despite the political grandstanding that erupted after the disclosure that IRS determinations staff and attorneys had asked some improper questions of Tea Party and other potentially political organizations applying for 501(c)(4) social welfare exempt status, there has been no evidence that the IRS or the Obama Administration was targeting political foes.
When one reads the Treasury Inspector General’s Report, press reports of staff statements to the House Committee on Oversight and Government Reform, and comments of former IRS officials, one comes away with a vision of front line staff struggling to try to determine who can qualify as a (c)(4) organization when there is no clear definition to work with.
It isn’t as easy as it once was to claim a charitable contribution deduction for a gift to charity.
Because of perceived abuses by taxpayers claiming inflated deductions without adequate justification, Congress and the Internal Revenue Service have tightened the rules over the last several decades.
The rules apply to the taxpayers seeking the deduction. In most cases, they do not directly apply to the charities receiving the gifts and do not impose penalties on charities, but charities that want to assist their donors and receive additional gifts will want to be sure that the donors are in position to claim their deductions properly.
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The federal District Court in Minnesota (John R.
The federal District Court of Minnesota (Patrick Schlitz) has said that Immigration and Customs Enforcement (“ICE”) has violated 96 specific court orders across 74 different cases, according to published reports. The Chief Judge made the comment in cancelling a contempt hearing for interim head of ICE Todd M. Lyons recently after the agency complied with a court order to release a wrongfully detained person.
The federal District Court in the District of Columbia (Amir H. Ali) has issued a preliminary injunction against the Office of the President and a variety of other federal agencies from using the summary revocation of security clearances to penalize lawyers from representing people adverse to it. “The Constitution forbids government officials from using their power to retaliate against people for their speech, and that is so even when the speech is critical of the government,” the Court said.
What definition of tax-exempt status applies to determine whether property is exempt from real estate and other taxes when the definition of qualification is changed while the case is pending during litigation?
An appellate court in Virginia has held that the new definition should be considered and that the trial court should reconsider the case pursuant to the Legislative amendment.
A nonprofit school’s agreement to pay a contractor only its insurance proceeds to repair hurricane damage does not vitiate its claim against the insurance company for damages. A federal District Court in Florida has held that the contractor’s willingness to benefit the school does not relieve the carrier of its obligation.
