Tax Exemption
The Return of the IRS Group Exemption: What Nonprofits Need to Know
After a wait of nearly six years, the IRS is now accepting group exemption applications for nonprofit organizations with multiple subordinates under a modernized standard and procedure. The old process was paused after forty years of use due to being outdated and inconsistent as well as administratively burdensome. That process has been replaced by new […]
Group Exemption Letters to Become More Restrictive
Proposed changes to IRS group exemption letters could result in organizations needing to re-structure their operations or seek new exemption rulings from the IRS. In Notice 2020-36 (available here), the IRS announced that as of June 17, 2020, it would no longer accept applications for group rulings under Rev. Proc. 80-27. All applications for group […]
Year-End Federal Tax Changes Benefiting NonProfits
On December 20, 2019, the President signed, “The Further Consolidated Appropriations Act” (H.R. 1865), which contained the “Taxpayer Certainty and Disaster Tax Relief Act of 2019” (“Act”). The Act contains two important changes to federal tax laws affecting nonprofits: (1) repeal of the parking tax and (2) reduction in the private foundation excise tax.
IRS Grants The Salt Lake Tribune Tax-Exempt Status
In an interesting new development, the IRS granted 501(c)(3) tax-exempt status to a major daily newspaper. On November 3, 2019, the Salt Lake Tribune announced that it had incorporated as a non-profit corporation, re-structured its operations, and obtained IRS recognition of its 501(c)(3) status. Tax-exempt practitioners have speculated for years that a daily newspaper could, […]
States Rush to Pass Economic Nexus Legislation
Following the Supreme Court’s June 2018 decision in South Dakota v. Wayfair, states have acted quickly to enact economic nexus laws to require remote sellers to pay sales tax. “Economic nexus” is the power of a state to compel remote sellers to pay sales tax on their transactions with purchasers in the state. As of […]
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 […]
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 […]
IRS Denies Student Loan Repayment Program
Students who have recently graduated from college deep in debt may think of themselves as charity cases, but that is not how the IRS sees them. An organization formed to assist individuals in paying off their student loans was denied 501(c)(3) tax-exempt status by the IRS (PLR 201718036, May 5, 2017).
Developing Open Source Software Not an Exempt Purpose
You may be familiar with open source software. If you are, you know it is software people can modify and share because its design is publicly accessible. Would efforts to develop open source software qualify as an exempt purpose under tax law? It’s not commercial and it benefits the public, right? Not according to the IRS.
Freedom from Religion Foundation v. Lew: Is the Ministerial Housing Allowance Unconstitutional?
UPDATE : The Seventh Circuit Court of Appeals avoided the constitutional question posed in Freedom From Religion Foundation, Inc. v. Lew[1] (described in the original story below), by vacating, for lack of standing, a lower court’s ruling that the ministerial housing allowance violates the U.S. Constitution. The case was brought by the Freedom From Religion […]