Receipting Donations

Complacency is Not an Option

Each year tax-exempt organizations in the United States receive hundreds of millions of dollars in donations.  Donors contributing to 501(c)(3) organizations are able to deduct their own contributions from their taxes, subject to IRS limitations.  Recently, a higher standard deduction has been put in place through the Tax Cuts and Jobs Act.  This will likely diminish the number of taxpayers and donors who itemize their deductions, making it tempting for charities to decide that receipting donations is no longer important.  However, charities should continue to exercise care in receipting donations for the benefit of the donor.

Most organizations are probably familiar with how to receipt cash contributions since cash is the most common type of donation.  Because of this, organizations may become complacent in receipting cash contributions and fail to properly receipt them to donors.  This is not an area where an organization should become complacent because the IRS requires strict compliance with its gift substantial rules.  Continue reading “Receipting Donations”

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 to Hear Case That Could Change Multi-State Sales Tax Law

South Dakota v. Wayfair Inc. Challenges Quill Corp. v. North Dakota 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 DakotaContinue reading “Supreme Court to Hear Case That Could Change Multi-State Sales Tax Law”

IRS Deems Pet Visitation is for the Public Good

If you have spent time in a hospital you may have seen pets walking through the hallways en route to patient visitations.  Pet visitation programs are often organized and coordinated by charities established solely for the purpose of providing pet visitation.  The charities work with hospitals and other healthcare providers to offer pet visitation services to patients.  Some hospitals organize their own pet visitation programs. A recent IRS ruling (PLR 201719018, May 12, 2017) concluded that a pet visitation program organized by a medical research and educational institution qualified as a charitable purpose of the institution.
Continue reading “IRS Deems Pet Visitation is for the Public Good”