Our Insights
Constitution and Bylaws
Does Your Church Need Both?
Sometimes when we analyze governance issues for our clients, we discover that they have two sets of governing documents: a constitution and bylaws. “Constitution” is the title most commonly associated with the governing document of an unincorporated association, whereas “bylaws” govern a corporation.
One of the main reasons churches have both documents is tradition: “It’s always been that way.” However, it is not legally necessary to have both, and in practice, it can lead to confusion, unclear answers, and unintended outcomes when the organization makes decisions. To prevent these problems, it is best if the organization has one set of governing documents that addresses all of the relevant governance issues. Continue reading “Constitution and Bylaws”
The Legal Status of a Church
Is Your Church a Religious Corporation or a Not for Profit?
In Illinois there are two corporation laws that can be used to form churches: the Religious Corporation Act of 1872 and the Not for Profit Corporation Act of 1986. Most lawyers practicing in the state of Illinois have probably heard of the latter statute, but relatively few may have heard of the former one.
Churches typically function with little awareness of their underlying corporate structure until they need to engage in some sort of commercial transaction–such as the purchase of real estate or obtaining a commercial loan–then the corporate structure becomes a matter of some attention.
Both kinds of corporations can function in the modern world of commercial transactions, but one type functions more easily than the other. Care to guess which one? Continue reading “The Legal Status of a Church”
Avoid Copyright Infringement
How to Properly Use Music and Images During Worship Service
Churches today use a variety of intellectual property during worship services, such as music, photographs, quotes, and video clips. These materials can be important to a worship service by increasing engagement, illustrating a point, or adding extra meaning to the service. However, most materials are protected by copyright laws.
Using intellectual property without the permission of the copyright owner or other legal authority is copyright infringement and can result in significant monetary damages. Churches need to know the legal issues that apply to using intellectual property so they can take steps to get permission when needed and avoid copyright infringement. Continue reading “Avoid Copyright Infringement”
Supreme Court Opens the Door for States to Collect Online Sales Tax
South Dakota v. Wayfair and Its Profound Effects
The U.S. Supreme Court made sweeping changes to how sales tax laws can be enforced by overturning a 26-year-old precedent. In South Dakota v. Wayfair, the Court held that physical presence is no longer necessary for a state to enforce sales tax laws against out-of-state sellers. Countless online retailers have relied upon the “physical presence” requirement over the last three decades to avoid paying sales tax where they had no offices, employees, inventory, or other physical contacts. The Court held that the “physical presence” rule was no longer sound and that states can tax any activity that has a “substantial nexus,” in this case through “extensive virtual presence” within the taxing state. Continue reading “Supreme Court Opens the Door for States to Collect Online Sales Tax”
Tax Cuts and Jobs Act: Changes That Affect Tax-Exempt Organizations
UPDATE: The Taxpayer Certainty and Disaster Tax Relief Act of 2019 amended the Tax Cuts and Jobs Act by repealing the tax on certain employee fringe benefits (parking) for nonprofit employers. An organization that paid the tax may be eligible for a refund. To claim a refund, the organization needs to file an amended 990-T, as further explained by the IRS here. The Taxpayer Certainty and Disaster Tax Relief Act also established a flat 1.39% excise tax on private foundation net investment income, instead of the variable 1% or 2% tax.
The Tax Cuts and Jobs Act made sweeping changes to the Internal Revenue Code including some that apply to tax-exempt organizations. Exempt organizations should become familiar with the new tax law and make plans to comply with it. Continue reading “Tax Cuts and Jobs Act: Changes That Affect Tax-Exempt Organizations”
Supreme Court to Hear Case That Could Change Multi-State Sales Tax Law
UPDATE: The U.S. Supreme Court overturned Quill and allowed states to enforce “economic nexus” laws to compel out-of-state retailers to collect state sales taxes. The Court’s decision is available here. Our article here explains how states have responded to the Court’s decision.
A very important case will be heard by the U.S. Supreme Court that could dramatically change the sales tax landscape. This spring the Court will hear South Dakota v. Wayfair, Inc., which challenges a prior Supreme Court decision in Quill Corp. v. North Dakota. Continue reading “Supreme Court to Hear Case That Could Change Multi-State Sales Tax Law”
EU Data Protection Law to Impact Charitable Donations
Do you have customers in Europe? Are you a charity that receives donations from EU citizens? Do you send your newsletter to people in Europe? If any of these apply to you, you should be aware of changes to European privacy laws that became effective on May 18, 2018 through the European Union General Data Protection Regulation (GDPR). The GDPR significantly broadens the geographic scope of European privacy laws to include individuals and businesses outside of the EU. Continue reading “EU Data Protection Law to Impact Charitable Donations”
“Mark of the Beast”: Fourth Circuit Upholds Judgment That Employer Failed to Accommodate Employee’s Religious Beliefs
A recent Fourth Circuit Court of Appeals ruling highlights an employer’s mistakes when refusing an employee’s request for a religious accommodation. The case, EEOC v. Consol Energy, Inc., upheld the lower court’s judgment against Consol that it failed to accommodate an employee’s religious objection to participate in the employer’s mandated biometric hand scanner system. The Fourth Circuit also upheld the district court’s damages award to the employee of almost $600,000.
Update: U.S. Department of Labor Withdraws Guidance on Independent Contractors and Joint Employment
On June 7, 2017, the U.S. Department of Labor (DOL) announced that it was withdrawing the Obama-era DOL 2015 and 2016 informal guidance memorandums on independent contractors and joint employment also referred to as joint employer. These memorandums were “Administrator’s Interpretations” meant to provide guidance as to how the law and related regulations with respect to independent contractors and joint employment should be interpreted and applied to employers.
Continue reading “Update: U.S. Department of Labor Withdraws Guidance on Independent Contractors and Joint Employment”