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...
A nonprofit organization organized and operated for charitable purposes may be exempt under Section 501(c)(3) of the Internal Revenue Code while a nonprofit organized and operated to promote the common business interest of its members and not to engage in regular business activities ordinarily carried on for profit may be exempt under...
10 years ago, I presented at an ethnic and community news media conference on “The Nonprofit Option.” Since then, as expected, we have witnessed a substantial decline in commercial news media. Changes in technology, consumption, and advertising have driven this decline, which has also resulted in increased polarization and...
Despite many people’s belief that grantmaking is restricted to entities known as foundations, public charities can and many do engage in grantmaking. This post focuses on grantmaking by public charities and generally does not address the more restrictive rules applicable to private foundations. Terminology Part of the confusion lies...
Terrorism, in many forms, has tragically continued to plague our global society, and we are tremendously saddened by the horrific events in Sri Lanka this past weekend. Nonprofits, including religious institutions, are often among those victimized and those that take leadership in recovery. But in extremely rare circumstances, nonprofits...