The IRS Tax Exempt & Governmental Entities (TE/GE) division released its Fiscal Year 2020 Program Letter earlier this week. In the Program Letter, TE/GE Commissioner Tammy Ripperda explains: Each year, TE/GE works hard to deliver the best possible tax administration. It’s what we’re paid to do and what the...
We have recently seen an increasing number of transactions involving the sale of charitable assets to for-profit entities. While generally permissible if conducted properly, these sales raise a number of legal issues at both the federal and state levels that must be considered. Where the transaction is motivated in...
Earlier this week, I had the privilege of guest lecturing to Scott Curran‘s Lawyers as Social Innovators class at Chicago-Kent College of Law at the Illinois Institute of Technology. The following is an excerpt of my notes for the class: Nonprofit Scandals Heard any juicy stories this summer? MIT Media Lab...
The IRS and Treasury are taking another shot at providing an exception for 501(c)(4), 501(c)(5), 501(c)(6), and certain other tax-exempt organizations (notably excluding 501(c)(3) organizations) from the requirement to report the names and addresses of their contributors on Schedule B of Form 990, prompting concerns of more dark money...
The Rebuttable Presumption of Reasonableness procedures, described in Treasury Regulation Section 53.4958-6(a), were promulgated to help charities avoid overpaying certain individuals and entities (known as disqualified persons) that might be able to exercise influence on the charity’s decision-making. Among those included as disqualified persons (DQPs) are: Directors (board members),...
On July 30, 2019, in Bullock vs. Internal Revenue Service, a federal court held unlawful and set aside Rev. Proc. 2018-38 as adopted by the IRS without complying with applicable notice-and-comment procedures. Rev. Proc. 2018-38 provided that tax-exempt organizations described by section 501(c), other than section 501(c)(3) organizations, will no...
In July 2016, we published a post on the New IRS Notification Requirement for 501(c)(4) Organizations – Form 8976. At the time, the IRS issued final and temporary regulations and published Revenue Procedure 2016-41 relating to the requirement that organizations notify the IRS of their intent to operate under section 501(c)(4) of the...
Earlier this year, the IRS released Rev. Proc. 2019-22, effective as of May 28, 2019, which provides a private school may use its Internet website to publicize the school’s racially nondiscriminatory policy as to students and meet the requirements of exemption under Section 501(c)(3). Background In 1970, the IRS...
In 2018, the Treasury Department changed its regulations to exempt tax-exempt organizations described by section 501(c), other than section 501(c)(3) organizations, from the requirement that they report the names and addresses of their contributors on the Schedule B of their Forms 990 or 990-EZ. See Treasury Eliminates Donor Information Disclosures...
The quick and admittedly general answers (because there are exceptions) are: (1) yes, a nonprofit can own a for-profit; and (2) no, a for-profit cannot own a nonprofit, but it can select all of the nonprofit’s board members and thereby largely control the nonprofit. Can a Nonprofit Own a...