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News and Avoiding Scams

Deductions for Nonprofit Volunteers

The Court reasoned that the most important consideration in determining deductibility of unreimbursed expenses is whether or not the volunteer work causes or necessitates the expense. If the expense is incurred solely in connection with one’s duties as a volunteer, such as buying food for a foster pet, the expense is deductible. If, however, the expense is one that would have been incurred regardless of one’s duties as a volunteer, such as repairs or insurance for a car that is used for personal transportation as well as transportation related to volunteer duties, the expense will be considered to have been incurred regardless of any volunteer service, thus it is not a deductible expense.

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July 6, 2011 No Comments

Relief for Revoked Nonprofits

Today, the IRS has made public the long awaited list of organizations that automatically lost their tax-exempt status due to their failure to file a Form 990, 990-EZ or 990-N for three consecutive years. The IRS announced that it has revoked the tax-exempt status of approximately 275,000 such organizations, including over 4,000 in Arizona.

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June 9, 2011 No Comments

IRS Permits More Organizations to File Form 990-N

The IRS today issued guidance (Revenue Procedure 2011-15) that will allow more tax-exempt organizations to file the simplified e-Postcard rather than the Form 990-EZ or the standard Form 990.

For tax years beginning on or after January 1, 2010, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less will be eligible to file the e-Postcard. Previously, the threshold was set at $25,000 or less. Supporting organizations of any size are still not eligible to file the Form 990-N. So, for the 2010 tax year, the new filing requirements are as follows:

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January 15, 2011 No Comments
L3C Update
News and Avoiding Scams

L3C – An Update by Keren Raz

Since Charity Lawyer’s last blog post on the Low-Profit Limited Liability Company, there has continued to be significant legislative activity across the country in support of the L3C though no corresponding uptick in foundation support. Louisiana, Maine, and North Carolina have signed L3C legislation into law. These three states join the following jurisdictions in recognizing the L3C: Illinois, Michigan, Utah, Vermont, Wyoming, the Oglala Sioux Tribe, and the Crow Indian Nation of Montana. In the following states, legislators have formally introduced L3C legislation: Arkansas, Colorado, Kentucky, Maryland, Massachusetts, Missouri, Montana, New York, North Dakota, Tennessee, and Virginia.

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November 30, 2010 No Comments

It’s a Medical Marijuana Miracle – Arizona Voters Approve Proposition 203

Following initial reports that the measure had failed, officials announced Sunday that Arizona voters approved Proposition 203, a measure that will legalize medical marijuana, by a razor thin margin of 4,300 votes.

As we have pointed out before ,Proposition 203 requires medical marijuana dispensaries to be formed as nonprofit entities but does not require that they incorporate or that they operate on a tax-exempt basis. Accordingly, we expect most dispensaries to operate as nonprofit corporations that are taxed as for-profits to avoid the burdensome restrictions applicable to tax-exempt organizations.

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November 15, 2010 No Comments

Small Tax Exempt Organizations: Extension of Time to File Delinquent Form 990s

Two types of relief are available for small exempt organizations – a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard), and a Voluntary Compliance Program for small organizations eligible to file Form 990-EZ , Short Form Return of Organization Exempt From Income Tax. Small organizations required to file Form 990-N simply need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by Oct. 15, 2010.

Under the Voluntary Compliance Program, larger tax-exempt organizations eligible to file Form 990-EZ (but not eligible to file Form 990-N) must file their delinquent annual information returns by October 15 and pay a compliance fee which is between $100 and $500 depending upon the organization’s revenues. Details about the VCP are on the IRS website , along with frequently asked questions.

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July 27, 2010 No Comments
IRS Determination Letters
IRS

IRS Cyber Assistant: Is it Worth the Wait?

In 2003, the number of applications for exemption had gone up by over 40% with no corresponding increase in the number of IRS Exempt Organization employees. This motivated the IRS to consider how to streamline the application for exemption process to make processing easier for both the IRS and the applicant. The IRS invited a panel of experts from the nonprofit legal community to make recommendations to improve the application process. The panel’s key recommendation was that the IRS revive earlier plans to develop and fund an interactive online Form 1023 filing tool accessible through the IRS website known as the “Cyber Assistant.”
UPDATE: On May 7, 2010, IRS announced in IRS Exempt Organization Update 2010-11, that Cyber Assistant is delayed – no release this year.

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May 2, 2010 No Comments

How to Keep your Non-Profit Compliant in All 50 States

Most states require you to register your organization if you solicit donations from their residents. Many states also require registration if your organization collects substantial or ongoing donations from their residents, even if you aren’t specifically targeting donors in that state. Download our comprehensive list of each state’s requirements.

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