A. Nicole Campbell is Associate General Counsel at the Open Society Institute ("OSI"), a private operating and grantmaking foundation in New York City. As Associate General Counsel, Nic works on a wide range of exempt organization matters at the foundation, including tax compliance and grantmaking, as well as other corporate, compliance, and governance matters. Prior to joining OSI, Nic was an associate in Proskauer's Tax Department and a member of its Not-for-Profit/Exempt Organizations Practice Group where she advised not-for-profit clients on a variety of matters, including applying for and maintaining exemption from federal income tax, structuring joint ventures and partnerships with taxable entities, and excise tax issues. In 2009, while at Proskauer, Nic went on leave to The New York Community Trust as its Associate General Counsel and was responsible for handling a range of legal matters, including charitable contributions, donor-advised funds, and corporate and governance issues. From 2007 to 2009, she was recognized by the New York State Bar Association for her pro bono service, earning her the title of "Empire State Counsel." In 2008 and 2009, she was honored by The Legal Aid Society as one of the recipients of the Society's Pro Bono Publico Awards for outstanding service to the Society and its clients. She is also a past recipient of the Proskauer Rose Golden Gavel Award for her commitment to pro bono service. Nic is an Editor of and contributor to the Not-For-Profit/Exempt Organizations Blog and she has also been a presenter at Proskauer's annual "Trick or Treat Seminar," where she discusses recent developments affecting tax-exempt entities. At Northeastern University School of Law, Nic was a Teaching Assistant for the Legal Practice Writing Program and a Teaching Facilitator for the Law Skills in Social Context Program. As an Educational Counselor for Massachusetts Institute of Technology, Nic interviews high school students who are interested in attending. Nic is also a member of the Board of Directors of Ardea Arts, Inc., a not-for-profit organization dedicated to developing and producing new American opera and music theater works for multi-generational audiences. Nic is also founding Director of Access Caribbean Assistance Fund, a not-for-profit organization that provides health and education assistance to needy individuals in the Caribbean.
Many practitioners have been anxious to leaf through regulations to confidently determine whether an organization is a “functionally integrated” or “non-functionally integrated” Type III supporting organization, and the implications of either classification. On December 28, 2012, the Internal Revenue Service released the long-awaited final regulations for Type III supporting organizations, as well as temporary regulations… Continue Reading
In PLR 20113041, the IRS revoked the tax exemption of a public charity based on excess benefit and private inurement issues revealed during the course of its examination. This ruling highlights practices that charities should avoid in order to maintain their tax-exempt status. This ruling also confirms that the IRS is paying close attention to what charities are doing in their “back” offices.
The CFA Institute has released guidance on the management of the financial resources of philanthropic organizations. Specifically, the CFA Institute developed the Investment Management Code of Conduct for Endowments, Foundations, and Charitable Organizations to specifically address the management of what are typically longer-term or permanent financial assets of these organizations. Board members and officers should be aware of the principles articulated in the Code of Conduct to successfully manage the investment of these types of assets and to ultimately protect the organization’s investments.
The IRS today has released a draft version of the form that small businesses and exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible exempt organizations — which do not generally file income tax returns — will claim the credit during the 2011 filing season.
Earlier this month, the Metropolitan Corporate Counsel interviewed Scott Harshbarger, Chair of Proskauer’s Pro Bono Initiative Committee, and Stacey O’Haire Fahey, Pro Bono Counsel at Proskauer, about the Pro Bono Initiative at Proskauer. Harshbarger and Fahey are also members of the Firm’s Not-for-Profit/Exempt Organizations group.
In addition to the many pro bono matters, including asylum, adoption, and advocacy projects, on which the Pro Bono Initiative works, the Initiative also represents all kinds of not-for-profit and exempt organizations (including community organizations and start-ups) that meet the financial criteria for pro bono services.
Small not-for-profit organizations at risk of losing their tax exemption because of their failure to file the Form 990-N or Form 990-EZ for the 2007, 2008, and 2009 taxable years can preserve their status by filing these returns by October 15, 2010. The IRS announced yesterday a one-time relief program for these organizations that will give them a “pass” until October 15, 2010.
Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N and a voluntary compliance program (“VCP”) for small organizations eligible to file Form 990-EZ.
A majority staff director for the Senate Finance Committee said that perhaps it might be time to consider the tax liability for an entity that is neither wholly charitable nor wholly for-profit. In fact, the director said that the Senate Finance Committee wrestled with the problem of a quasi-charitable entity in enacting the health care legislation, and said that the tax treatment of not-for-profit organizations might be revisited further in the tax reform context.
In an interesting recent decision, International Schools Services Inc. v. West Windsor Township, N.J., the New Jersey Superior Court Appellate Division ruled that a not-for-profit organization whose purposes were to aid, promote and encourage educational organizations should lose its property tax exemption because its operation and use of the property was conducted for profit. This decision should make not-for-profits with affiliated for-profits or an ongoing working relationship with for-profits carefully scrutinize their activities with these for-profit entities.
In a recent New York County Supreme Court opinion, Empire 33rd LLC v. Forward Ass’n Inc., the court ruled in favor of the defendant charities to dismiss the plaintiff’s complaint demanding the return of payments under an agreement in which it alleged defendants lacked the “required approvals and consents required by law” to execute. The court found that the proposed sale of property by the defendant charities was duly authorized by the NY Supreme Court, as Section 203 of the New York Not-for-Profit Corporation Law (“NPCL”) requires.
After attending the Georgetown University Law Center “Representing & Managing Tax-Exempt Organizations” Conference in April, 2010, we wanted to discuss some of the lessons that exempt organizations should take away in the following areas: governance; transparency; compensation; joint ventures; and endowments and investments.
We tweeted live from the Georgetown Conference that occurred on April 22-23, 2010. Our tweets highlight IRS next steps and agenda items, as well as discuss other topics of interest to exempt organizations.
Under the recently enacted health care reform legislation, many small businesses and tax-exempt organizations are now eligible for a new federal tax credit. This credit is designed to encourage small employers to offer health insurance for the first time or maintain coverage they already have.
Earlier this year, the IRS reminded all exempt organizations that, regardless of their size, they must file the Form 990 on time in order to preserve their tax-exempt status. Starting this year, organizations that fail to file these information returns for three consecutive years will automatically lose their exempt organization status.
On March 9, 2010, the IRS issued guidance designating the earthquake that occurred in Chile in February, 2010 as a qualified disaster for federal tax purposes. The guidance allows recipients of qualified disaster relief payments to exclude those payments from income tax. The guidance also allows employer-sponsored private foundations to assist employee victims in areas affected by the earthquake without affecting their tax-exempt status.
On Friday, January 22, 2010, President Obama signed into law a bill allowing taxpayers who made charitable contributions to the Haiti earthquake relief efforts to claim an itemizable deduction on their 2009 Tax Returns instead of waiting until next year to claim the deduction….The IRS also announced on Friday that it has issued guidance designating the Haiti earthquake as a natural disaster for federal tax purposes. The guidance allows recipients of qualified disaster relief payments to exclude those payments from income tax.
SEI reports that a recent poll shows a continued commitment to alternative investments by nonprofit organizations, including educational institutions, hospitals, private foundations, and community foundations. Conducted in December, 2009, the poll looked into the current investment management practices of nonprofit organizations, the challenges these organizations are facing, and how these organizations are prioritizing and addressing these concerns for 2010.
In Announcement 2009-88, set to be published in Internal Revenue Bulletin 2009-52, dated December 28, 2009, the IRS lists organizations that have failed to establish or have been unable to maintain their status as public charities or as private operating foundations.
Continue reading for the full text of the Annoucement.
On November 24, 2009, the IRS issued its Priority Guidance Plan for 2009-2010. The Plan contains 315 projects to be completed over a twelve-month period, from July, 2009 through June, 2010.
The IRS has reported that user fees will increase for all applications for exemption (Forms 1023, 1024, and 1028) postmarked after January 3, 2010: $400 for organizations whose gross receipts are $10,000 or less annually over a 4-year period (Currently $300) $850 for organizations whose gross receipts exceed $10,000 annually over a 4-year period (Currently $750) $3,000… Continue Reading
People have been whispering among themselves about the L3C, an emerging low-profit limited liability company structure that aspires to link business methods with charitable purposes and give socially oriented businesses greater access to investor capital. The structure was created by Robert M. Lang, Jr., CEO of the Mary Elizabeth & Gordon B. Mannweiler Foundation. Conceptually, the L3C is a hybrid not-for-profit/for-profit entity: like a… Continue Reading