Note: This article is a recap of Lesley Rosenthal’s presentation at Proskauer’s 17th Annual Trick or Treat Tax Exempt Seminar, November 29, 2012 Attorneys can reap enormous rewards by serving on nonprofit boards. Lawyers derive tremendous personal satisfaction in governing an organization that is meaningful to them. They can do the public good by participating… Continue Reading
Incorporating under Delaware law can be an attractive option for a not-for-profit organization because Delaware law often grants greater flexibility with respect to the governance and structuring of the organization. For example, under Delaware law, a corporation (whether organized for profit or not) is only required to have one director, whereas the majority of states require a not-for-profit organization to have at least three directors, and Delaware law does not require a corporation to have officers.
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.