Exempt Org. Resource


ExemptOrgResource.com is an online resource for information and insight on the unique legal issues impacting nonprofit organizations. The site is designed to keep the nonprofit, tax-exempt organization community up-to-date on legal developments, changing regulations and good practices.

Recent Blog Posts

  • A Congressional Christmas Miracle Just in time for the holidays, Congress gave two gifts to tax-exempt organizations as part of the new government funding bill signed into law on December 20, 2019. First, the excise tax imposed on the investment income (generally, interest, dividends, rents, royalties, and capital gain net income) of private foundations under Section 4940 of the Internal Revenue Code has been set at a flat 1.39%.  This change simplifies prior law, which imposed a default 2% rate, reduced to 1% depending... More
  • IRS Issues Interim Guidance Regarding Compensation Tax As we previously reported, the Tax Cuts and Jobs Act, which was signed into law at the end of 2017, imposes an excise tax on certain tax-exempt organizations equivalent to 21% of “excess compensation” (including certain severance payments) paid to certain current and former employees.  Under the new Section 4960 of the Internal Revenue Code, the tax is payable by the tax-exempt organization and, if applicable, a “related organization” (on a proportional basis).  Section 4960 defines excess compensation for such... More
  • Governor Gives Sole Members the Boot We previously reported on A.B. 10336-A (Paulin) / S.B. 8699 (Gallivan) (the “Bill”), which would amend Section 601(a) of the New York Not-for-Profit Corporation Law to raise the minimum number of members of a not-for-profit membership corporation from one to three.  The Bill was signed into law by Governor Cuomo on December 21, 2018.  It will go into effect on July 1, 2019.  New York not-for-profit corporations, and all organizations with New York not-for-profit affiliates, should review the legislation to... More
  • IRS Issues Guidance Regarding College and University Excise Tax As we previously reported, the 2017 tax reform bill instituted an excise tax on the investment income of certain private colleges and universities under new Section 4968 of the Internal Revenue Code (the “Code”).  The Internal Revenue Service (the “IRS”) and the Department of the Treasury (“Treasury”) have now issued Notice 2018-55 which provides guidance (including notification of an intent to issue regulations) regarding the calculation of net investment income for purposes of Code Section 4968(c). Section 4968 imposes an... More
  • Changes to Donor Disclosure Requirements Under newly released rules, certain tax-exempt organizations are no longer required to disclose personally identifiable donor information on their annual Form 990 filings.  This change does not affect Section 501(c)(3) or Section 527 organizations. The U.S. Treasury Department and the Internal Revenue Service (the “IRS”) released Revenue Procedure 2018-38 at the end of July, which releases tax-exempt organizations described in Section 501(c) of the Internal Revenue Code that are required to file Form 990, except Section 501(c)(3) organizations, from the... More
  • The More (Members) the Merrier? Or, So Long, Sole Members The New York Assembly and Senate recently passed legislation – A.B. 10336-A (Paulin) / S.B. 8699 (Gallivan) (the “Bill”) – that would raise the minimum number of members of a not-for-profit membership corporation to three through amendment of Section 601(a) of the New York Not-for-Profit Corporation Law (the “NPCL”), which currently permits a minimum of one member. The Bill would provide an exception for membership corporations with a sole member that is a corporation, joint-stock association, unincorporated association or partnership, but only... More
  • The Building Block(chain)s of Philanthropy: Exempt Organizations and Blockchain’s Potential In recent months, news of Blockchain technology has filled headlines.  The ability of Blockchain—which provides a decentralized means of recording and verifying transactions—to shape the financial sector has been widely reported, as have transactions involving Bitcoin and other cryptocurrencies using Blockchain technology.  Programmers and businesses are quickly turning to various Blockchain platforms to develop new applications of this technology, even as regulatory bodies are beginning to pay increased attention to high-stakes cryptocurrency transactions. The impact of Blockchain technology is already... More
  • Newman’s Own Law A last minute addition to the budget appropriations bill enacted by Congress this month has created new opportunities for philanthropic planning.  Section 41110 of the bill creates a limited exception from the private foundation excess business holdings excise tax under Section 4943 of the Internal Revenue Code.  In general, a private foundation is only permitted to hold certain amounts of stock or other interests in business enterprises; any holdings beyond those amounts are treated as excess business holdings, and the... More
  • Sweeping Tax Reform Impacts Tax-Exempt Organizations After a short period of deliberations by the House of Representatives (the “House”) and the Senate, President Trump signed the final version of H.R. 1 into Public Law No. 115-97 on December 22, 2017 (the “New Law”). The New Law makes substantial changes to the Internal Revenue Code, and our previous alerts discussed the New Law’s evolution in detail and the impact on tax-exempt organizations of certain provisions of the initial versions of the New Law introduced by the House... More
  • Senate Passes Tax Reform Bill On November 16, the House of Representatives passed an amended version of H.R. 1, the “Tax Cuts and Jobs Act,” by a vote of 227-205 (the “House Bill”). On November 20, 2017, the Senate Finance Committee released the Senate’s proposal for its own version of the bill (the “Senate Proposal”). Our previous alert discussed the impact on tax-exempt organizations of certain provisions of the House Bill and Senate Proposal. In the early morning of December 2, 2017, the Senate passed... More