Category: Nonprofits

Want to Move Your State of Incorporation?

Posted on under Articles, Nonprofits.

Recent IRS Guidance Made it Easier

Has your organization moved from the state it was incorporated?  If so, you may want to consider re-structuring your legal entity under the new guidance issued by the IRS.  In Rev. Proc. 2018-15, the IRS announced that a new exemption application is not required if a domestic tax-exempt organization changes its legal structure or re-incorporates in another state.  Under prior IRS guidance, an organization was required to file a new exemption application in order to keep its exemption if it made any of these changes.  Continue reading “Want to Move Your State of Incorporation?” →

Constitution and Bylaws

Posted on under Articles, Churches and Religious Organizations.

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

Posted on under Articles, Churches and Religious Organizations.

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

Posted on under Articles, Churches and Religious Organizations, Copyright and Trademark.

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” →

Tax Cuts and Jobs Act: Changes That Affect Tax-Exempt Organizations

Posted on under Articles, Nonprofits.

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

Posted on under Articles, Nonprofits.

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” →

IRS Deems Pet Visitation is for the Public Good

Posted on Thursday, June 22nd, 2017 under Nonprofits.

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” →