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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A charity that lost $2 million when a “fraud prevention officer” was able to take over its computer system and authorize 14 wire transfers in 33 minutes has lost its claim against the bank that made the transfers. A federal District Court in Michigan has ruled that the bank did not violate any of its agreements with the charity.
Does a university have a special relationship with a student fraternity sufficient to impose a duty on the university to protect a student who died from acute alcohol poisoning following a fraternity hazing ritual?
The Trump Administration has proposed new regulations to prohibit racial considerations in scholarships and other administrative policies in educational institutions and to remove the tax-exempt status for any institution failing to comply.
When Sri Shirdi Sai Baba Temple of Austin (TX) was incorporated as a nonprofit religious institution in 2007, its certificate of formation vested management of the Temple in its board of directors and provided that it would have no members. Its bylaws provided that corporate management was vested in its board, which would select new directors by vote of the board.
