New IRS Memo on Shared Websites

Download: Nonprofit Law Podcast #52 (mp3, 10:20)

Shownotes

Intro

Your guide to the laws impacting nonprofits
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501(c)(3)/501(c)(4) Shared websites

• On February 20th, the IRS released T.A.M. 200908050
• Arguably a stricter stance at affiliated 501(c)(3)-501(c)(4) entities sharing websites when the 501(c)(4) is engaged in political activity that is prohibited for 501(c)(3)s.
• What we’ve always thought
  • Caveat – the IRS rarely gives a lot of spot-on advice, so “what we’ve always thought” is based on educated conjecture based on existing precedent
  • 501(c)(3)s and affiliated 501(c)(4)s can share the same website so long as corporate formalities were followed.
  • The (c)(4) can be on the (c)(3)’s website, but there had to be some kind of way for the (c)(4) to reimburse the (c)(3) for using that space.
  • The (c)(4) also had to be the entity making the communications as well.
• The IRS in this T.A.M.
  • The entities involved here had the (c)(4) reimbursing the (c)(3) for the space, but the (c)(3)’s logo and copyright information were splashed all over the (c)(4) page content.
  • That was a compelling factor for the IRS… more compelling than which entity paid for the communications that endorsed candidates and included non-(c)(3) allowable candidate questionnaires.
• Where does this leave us?
  • It does not appear that the IRS is closing to door to shared sites, but it is clear that details matter beyond which group cuts the check for which content.
  • The safest thing would be separate websites altogether – and these days, it’s certainly less of a cost issue to maintain 2 domain names and 2 design schemes than in year’s past.
  • I suspect, although it’s not 100% clear from the T.A.M., that the (c)(3) and (c)(4) could share a domain hosting package so long as they split the costs, and maintain separate websites with separate communications.
  • Linking between the two should still be acceptable under earlier law, but it cannot rise to the level of campaign intervention, so the links are best left as, “we have an affiliated organization and you can read more about that work here.”

Resources

My post at the nonprofit law blog

Alliance for Justice (note, AFJ has a free conference call on the topic this Tuesday, March 10)

Caplin & Drysdale

IRS TAM 200908050 (Feb 20, 2009)(PDF, via Caplin & Drysdale)

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Email me with questions and suggested topics
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
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What does the IRS have in store for nonprofits in 2009?

“a lengthy examination of how tax-exempt groups raise and spend money compared to how much they spend to achieve charitable goals.”

“Nonprofit student-loan groups also will be under greater scrutiny from the IRS next year, as the agency seeks to guard against abuses by organizations that are connected to for-profit businesses.”

“The IRS also will look at how nonprofit organizations and donors account for non-cash gifts, such as pharmaceuticals or used clothing, that are given to tax-exempt groups, which in-turn donate to a different nonprofit group.”

“The agency also plans to take a look at its own operations next year… consider governance issues that may be used in determining whether an organization qualifies as a charity.”

Resources

IRS Discloses 2009 Plans for Reviewing Tax-Exempt Organizations - The Chronicle of Philanthropy

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Need more than a podcast? Tim-Mooney.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

When is a person acting on their own versus acting on behalf of their organization?

- Joining a nonprofit as a director or a staff member doesn’t take away your individual rights
- Individuals can do things that are otherwise forbidden… donate time/money to campaign, etc.
- General rule – so long as an organization’s financial resources, facilities, or staff are not used, the organization is not going to be beholden to the individual acts of its staff, officers or directors

When do the actions become attributed to an organization?

- Principles of agency are used… if the person acts as if they have power, and they actually do have the power, the IRS will usually consider the action that of the organization
- Actions of individuals that weren’t ok’d by the group, but were later “implicitly ratified.” (i.e. Organization found out about the actions and did not disavow them)

Tips & Best practices

- Have a policy in place on use of organizational resources
- Encourage use of disclaimers for individuals working on non-organizational endeavors (i.e. “organization shown for identification purposes only”)

Resources

Election Year Issues (pp. 363-365) – IRS CPE Text
Election Year Activities for Section 501(c)(3) Organizations: Frequently Asked Questions – McDermott Will & Emery
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Email me with questions and suggested topics
Need more than a podcast? Tim-Mooney.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

Check out the new website

New adds include a searchable database of all shows. If any links are a mess, drop me a line.

Change comes to DC – What are the plans for nonprofits?

Resources – look for something akin to the bailouts in the for profit sector, although the focus will be in the form of a newly formed Social Investment Fund Network – federal seed money leverages private sector funding

Tax law changes – any tax increases on higher income Americans could (possibly… depending on whom you ask) enhance the incentives to make charitable donations

Scrutiny – Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT) of the Senate Finance Committee have been poking around the nonprofit sector for years. Sen. Grassley in particular has been the most interested in creating additional regulatory hoops for nonprofits to jump through.

Resources

Nonprofit Law Prof Blog

Obama/Biden website

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Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

Check out the new website

We had a meltdown in the website code, so I made lemonade from lemons and moved everything over to a new system that should be more stable. New adds include a searchable database of all shows. If any links are a mess, drop me a line.

Fall and winter means donation time (we hope!)

federal tax law requires charities to provide receipts to donors so that that may take advantage of their generosity

IRS – true to form, does not give us any particular formatting on what charities need to provide, but they’re more than happy to create problems for charities that fail to provide them

What should be provided (courtesy of BoardSource)

• The donor’s name
• The amount of money or a description of the item donated
• A statement indicating whether or not any goods or services were provided in return for the gift; receipts from religious organizations must include a statement indicating that “intangible religious benefits” were provided but they have no monetary value for tax purposes
• A good-faith estimate of the value of goods or services provided; insubstantial values need not be recorded

Email is totally acceptable – everyone thank the IRS for joining the Internet revolution!

Want to check out what our neighbors north of the border are like on this? Take a look at the Sens Foundation’s admonition not to ask for a receipt unless you really, really need one… I’ve never seen anything like that before!

Resources
What should be included on a charitable donation receipt? – BoardSource
Sample charitable receipt – Special Libraries Association

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Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

Election season brings out the advocacy issues for nonprofits

- Some churches are about to get in a heap of trouble…
Alliance Defense Fund is trying to take on the IRS and the tax prohibition on electioneering.
It’s probably going to cost some churches, but more importantly the hubris will impact the church goers
The First Amedment is alive and well, but it doesn’t simultaneously create the right to tax deductibility of donations. That’s a privilege.

- Campaign finance laws were thankfully overturned, and here’s why…
In 2000, Congress passed McCain-Feingold, or BCRA – it contained a well-intentioned but overbroad provision that essentially banned any broadcast advertisement that mentioned anyone running for federal office within 60 days of the November elections.
The Supreme Court overturned it because it banned all ads in those windows, including ones that are purely within free speech categories – like lobbying
When I lobbied supporters and authors of this law, I was constantly asked what kind of things could possibly come up within 60 days of an election that nonprofits and other corporations would want to weigh in on?
Well… we all just experienced it – the rescue bill was firmly within the 60 day window and without the wisdom of the Court (a phrase I do not often use) an election law would have stopped organizations from weighing in on the bill via broadcast ads.
Even supporters of BCRA were uncomfortable on this point…

Resources

Election Law Blog on the BCRA 60 day windows
Action Urged Against Politicking Pastors – The Chronicle of Philanthropy

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Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

- – This podcast is dedicated to the memory of Sean May. To learn more about Sean, please visit seanmaymemorial.com. – -

Straight from the IRS:

The Internal Revenue Service and the Treasury Department today issued new regulations that will streamline the approval process for organizations seeking tax-exempt status as publicly supported charities.

The new regulations do away with the so-called advance rulings that granted public charity status for an initial five-year period but required exempt organizations to demonstrate, after the initial period, that they in fact received a substantial part of their support from public sources to receive a final determination letter.

Resources

IRS Streamlines TEO Application Process – Nonprofit Law Prof Blog
IRS Streamlines Application Process for New Tax-Exempt Organizations – IRS Press Release

Closing
Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

Craigslist Foundation Nonprofit Bootcamp
Highly recommend this great day of learning about nonprofits, including nonprofit law
Alliance for Justice session on lobbying was excellent
NYC 2008 Podcasts should be up soon – in the meantime, check out past ones
If you’re in the Bay Area, I highly encourage you to attend the west coast version on October 18, 2008 in San Mateo, CA

IRS revamps Pub 1828, the Guide to Churches and Religious Organizations

• IRS Publication 1828 (PDF) – Designed for religious organizations, but this guide is an excellent parallel resource for secular charities as well
• Inurement and Private Benefit

• • No special deals for insiders
• • No charitable dollars to individuals’ “private benefit”

• Employment Tax

• • The basic ins and outs of withholding and other issues

• Payment Of Employee Business Expenses

• • How to properly reimburse

• Recordkeeping Requirements

• • Simple rules for keeping the IRS happy if you’re audited

• Substantiation and Disclosure Rules for Donations

• • What you have to do when you receive tax-deductible donations

• A great index to other relevant IRS pubs (special note to my silver medal for best IRS pub: Publication 557)
• Update reflects some of the examples and guidance from Rev. Rul. 2007-41

• • Examples illustrating the application of the facts and circumstances test for campaign intervention
• • If you’re a non-religious org, check out the Revenue Ruling… Pub 1828 focuses on the religious org examples

Resources

• IRS Publication 1828 (PDF)

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Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

Important responsibilities for board chairs (and other board members)

• 1. Be Faithful to Mission
• 2. Guide the Grantmaking Strategy
• 3. Map Out the Future
• 4. Stay Focused on Financial Oversight and Legal Compliance
• 5. Master the Art of Facilitating Meetings
• 6. Connect the Dots Between Committees
• 7. Build a Board That Is Strong And Engaged
• 8. Communicate with the Community
• 9. Oversee Administrative Work
• 10. Assess Performance

Resources

BoardSource, Ten Essential Responsibilities of Foundation Board Chairs
Full whitepaper

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Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law

Shownotes

Intro

Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com
Email the show

Due Diligence for Nonprofits

• Conflict of interest policy for board members, officers, and senior staff
• Whistleblower policy
• Document retention and destruction policy
• Gift acceptance policy
• Compensation policy
• Parent-subordinate consistency policy
• Contemporaneous documentation of meeting minutes of board and committees
• Compensation and Audit committees
• For grantmakers – Maintains records to substantiate the amount of the grants or assistance, the grantees’ eligibility
• for the grants or assistance, and the selection criteria used to award the grants or assistance.

Resources

American Council on Education – 501(c)(3) Due Diligence (PDF)

Closing
Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com
nplawcast.com

This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law