Header graphic for print
Not For Profit/Exempt Organizations Blog

Recaps from Proskauer’s 15th Trick or Treat Tax Exempt Seminar

Posted in Charitable Giving

Proskauer’s 15th Trick or Treat Seminar was held on Friday, October 29, 2010.  The Seminar discussed:

  • Best Practices for Board Members
  • The Effects of Health Care Reform
  • Executive Compensation Developments
  • Ethics Issues Facing In-House Counsel 

In her introductory remarks, Amanda H. Nussbaum, Partner, highlighted that on September 17, 2010, New York modified its laws governing the management and investment of charitable assets of New York not-for-profit organizations.  Specifically, the NYS legislature adopted, subject to certain modifications, the Uniform Prudent Management of Institutional Funds Act, (“NYPMIFA”).  All charities are encouraged to review NYPMIFA in its entirety to fully understand the extent of the Act’s new requirements.  NYPMIFA applies to all charitable assets, not just endowments, and can be found in more detail in our October 7, 2010 blog entry.

Here are some take-away points from each presentation:

Best Practices for Board Members.  Bob KaufmanPartner, described how increased outside scrutiny of tax-exempt organizations requires increased attention by boards, particularly with respect to governance questions now asked on IRS Form 990.  Critical responsibilities of all board members are the selection, evaluation, and, if necessary, replacement of the CEO, but also support, encouragement, and assistance to the CEO.  Good practices include how replacement directors are selected, compensation practices and audit committees, and being able to answer “yes” to the Form 990 questions of whether the organization has certain key policies.

The Effects of Health Care ReformElizabeth Mills, Senior Counsel, described highlights of this year’s health care reform act relating to tax-exempt organizations both as employers and as charitable organizations.  Health plans maintained by exempt organizations for their employees are subject to the same new rules as those of taxable employers, many of which are effective beginning January 1, 2011 or even sooner.  Depending on whether the plan is “grandfathered,” these rules may include coverage of preventive services, limitations on waiting periods to obtain coverage, prohibition of preexisting condition limitations, and application of nondiscrimination rules to insured plans.  Tax-exempt hospitals are also subject to specific new requirements that are effective now.  Finally, the health reform legislation includes many funding opportunities for education and innovative care arrangements, some of which require partial funding from private sources.  More information can be found at Proskauer’s Health Care Reform Task Force web page.

Executive Compensation Developments.  Lisa A. Berkowitz Herrnson, Senior Counsel, described how nonqualified deferred compensation for executives of tax-exempt employers is governed by the rules of Code Section 457.  If a plan does not satisfy the requirements to be an “eligible deferred compensation plan” under Code Section 457(b), it will be considered to be an “ineligible deferred compensation plan” under Code Section 457(f) and will then need to ensure that it also complies with the rules under Code Section 409A.  The IRS has announced its intention to issue additional guidance concerning certain aspects affecting “ineligible deferred compensation plans” in the near future.

Ethics Issues Facing In-House Counsel.  A. Nicole Spooner, Associate General Counsel at the Open Society Institute, described the New York Rules of Professional Conduct  and how those rules can apply to in-house counsel.  Specifically, in-house counsel should be aware of the level of protection and confidentiality afforded business and legal services that they provide and should determine the extent of their attorney-client relationships.  Moreover, in-house counsel should be aware of how their practice can be limited across state and international jurisdictions, including limitations on privilege and what information can be kept confidential.  Finally, in-house investigations should be conducted with these principles in mind and in-house counsel that are not the primary counsel in an organization should still realize that they have responsibilities under the Rules of Professional Conduct and can also be in violation of the Rules.

A replay of the seminar is available by following the instructions below:

 Go to  https://university.learnlive.com/proskaueronlineevents

Login with your existing user name and password.
If you do not have a user name and password,
please select the “New Student Registration” button to create a new account. You will need to enter the Proskauer Company Code: 9736529.
Select the “Catalog” tab at the top of the page. Select the “Enroll” button to the right of the course titled “Trick or Treat Seminar 10-29-10.”
Select the “Continue” button in the pop up.
Select the “Launch” button to open the course and begin watching. Please be sure to allow pop-ups and click the boxes that appear on the screen to receive CLE credit.