Not For Profit/Exempt Organizations Blog

Tag Archives: tax-exempt organizations

New Legislation Modernizes New York Not-For-Profit Corporation Law

By Amanda H. Nussbaum and Colin Wetmore on Posted in Not-for-Profit, Tax-Exempt Organizations
On November 21, 2022, Governor Kathy Hochul signed into law new legislation, which amends certain provisions of the New York Not-For-Profit Corporation Law (the “N-PCL”).  The legislation, described in detail below, “modernizes provisions of law relating to members, directors and officers to align with current practices, streamline procedures and eliminate unnecessary regulatory burdens”[1], and is … Continue Reading

U.S. District Court Finds Mayo Clinic Qualifies as an “Educational Organization”; Awards $11.5M UBTI Refund

By Richard M. Corn, Amanda H. Nussbaum, David Miller, Stuart Rosow and Carrie Slaton on Posted in IRS, Not-for-Profit, Tax, Tax-Exempt Organizations
Introduction Tax-exempt organizations, while not generally subject to tax, are subject to tax on their “unrelated business taxable income” (“UBTI”).  One category of UBTI is debt-financed income; that is, a tax-exempt organization that borrows money directly or through a partnership and uses that money to make an investment is generally subject to tax on a … Continue Reading

The Impact of Americans for Prosperity Foundation v. Bonta on Donor Disclosure Laws

By Amanda H. Nussbaum, Richard M. Corn and Carrie Slaton on Posted in IRS, Not-for-Profit, Tax-Exempt Organizations
On July 1, 2021, the Supreme Court struck down a California donor-disclosure law as facially unconstitutional in its decision in Americans for Prosperity Foundation v. Bonta.[1]  The law required nonprofits operating or soliciting contributions in California to disclose to the Attorney General of California information about all of its donors who contribute more than $5,000 … Continue Reading

Final Regulations on Executive Compensation Excise Tax (Section 4960) Carries Forward Most Concepts from Proposal

By Amanda H. Nussbaum, James Huffman, Katrine Magas and Seth Safra on Posted in Executive Compensation, IRS, Tax Reform, Tax-Exempt Organizations
On January 19, 2021 the Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) published in the Federal Register Final Regulations (the “Final Regulations”) interpreting the excise tax under Section 4960 of the Internal Revenue Code on certain executive compensation paid by tax-exempt organizations. The Final Regulations maintain most of the concepts from … Continue Reading

10 Keys to Excise Tax on Executive Compensation Paid by Tax-Exempt Organizations

By Seth Safra, Amanda H. Nussbaum, Katrine Magas and James Huffman on Posted in Executive Compensation, IRS, Not-for-Profit, Tax Reform, Tax-Exempt Organizations
Proposed Regulations under Section 4960 of the Internal Revenue Code provide important guidance for tax-exempt organizations and their affiliates regarding an excise tax on certain executive compensation.  The U.S. Department of the Treasury (“Treasury”) and Internal Revenue Service (the “IRS”) are accepting comments until August 10, 2020.  (Throughout this post, “Sections” refer to sections of … Continue Reading

IRS Issues New Guidance for Virtual Currency Donations

By Jeremy Naylor and Brianna Reed on Posted in Articles, Charitable Giving, IRS, Not-for-Profit, Tax-Exempt Organizations
The U.S. Internal Revenue Service (IRS) quietly added two new questions and answers regarding virtual currency donations to its answers to Frequently Asked Questions on Virtual Currency Transactions (FAQs) on December 26, 2019.  The two new answers address the responsibilities of charitable organizations when accepting donations of virtual currency, including cryptocurrency. For a discussion of … Continue Reading

IRS Provides Guidance on Unrelated Business Income Tax Refunds

By Amanda H. Nussbaum and Amy Zelcer on Posted in IRS, Not-for-Profit, Tax-Exempt Organizations
On Friday, December 20, 2019, President Trump signed into law government funding legislation for the 2020 fiscal year that includes a provision repealing Section 512(a)(7), commonly referred to as the “parking tax,” with retroactive effect to the date of its enactment.[1]  Section 512(a)(7) was enacted pursuant to the 2017 U.S. tax legislation known as the … Continue Reading

Five Excise Tax Tips For Tax-Exempt Employers

By Seth Safra, David Miller, Amanda H. Nussbaum, Steven Weinstein and Damian A. Myers on Posted in Executive Compensation, Not-for-Profit, Tax Reform, Tax-Exempt Organizations
As we have previously discussed, the 2017 tax reform act created a new excise tax under section 4960 of the Internal Revenue Code that will affect many tax-exempt employers.  The tax is 21% of certain compensation and can be triggered if an employee receives more than $1 million of compensation or an employee receives certain … Continue Reading

IRS Releases Interim Guidance on New Excise Tax on Executive Compensation Paid by Tax-Exempt Organizations

By Steven Einhorn, Tyler Forni, David Miller, Amanda H. Nussbaum and Ira G. Bogner on Posted in IRS, Tax-Exempt Organizations
On December 31, 2018, the Department of the Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) released Notice 2019-09 (the “Notice”), which provides interim guidance under Section 4960 of the Internal Revenue Code. Very generally, Section 4960 imposes a 21% excise tax on certain tax-exempt entities (and certain related organizations) that pay remuneration in … Continue Reading

New Rules for Tax-Exempt Organizations in the Tax Cuts and Jobs Act

By Steven Einhorn, David Miller, Elizabeth M. Mills and Kathleen R Semanski on Posted in Charitable Giving, Private Foundations, Religious Organizations
House Republican Tax Bill Imposes Excise Tax on Wealthy Private Universities and Excess Compensation of Highly Paid Employees; Subjects State Pension Plans to UBTI Rules On Thursday, November 2, House Republicans led by Speaker Paul Brady (R-WI) and Chairman of the House Ways & Means Committee Kevin Brady (R-TX), released the first public draft of … Continue Reading

Senate Finance Committee Staff Compiles Past Proposals for Exempt Organization Tax Reform

By Elizabeth M. Mills on Posted in Charitable Giving
As part of a series of papers outlining tax reform options for the Senate Finance Committee (SFC), the SFC staff recently published a paper on tax reform options for tax-exempt organizations and charitable giving.  Like the other staff papers on tax reform options, the exempt organizations paper compiles suggestions that have been made by witnesses … Continue Reading
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