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Fennemore Craig Non-Profit Law Blog

Setting the standard for Non-Profit Law in the Southwest
Feb 17 2010

Failure to file Form 990 may result in revocation of Exempt Status

Most tax-exempt organizations are required to file an informational return on an annual basis with the Internal Revenue Service on Form 990, Form 990-EZ or Form 990-PF. Limited exceptions to this filing requirement apply to churches and certain religious organizations and state and local instrumentalities. In addition, certain smaller organizations that had $25,000 or less in revenues in 2009 are not required to file a full informational return, but may be required to file an annual electronic notice or "e-Postcard" (Form 990-N), in which the organization provides its legal name and any other name under which it does business, a mailing and web address, taxpayer identification number, address of a principal officer, and evidence of the continuing basis for the organization’s exemption from the filing requirements.

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Posted by Chris Olson at 2:02 PM | Email Post Email Post
Categories: Tax Exempt | IRS

Feb 16 2010

Court Ruling Opens Door For Greater Campaign Activities

In a 5-4 decision, in Citizens United v. Federal Election Commission, the United States Supreme Court invalidated decades-old federal prohibitions on organizations making independent expenditures to expressly advocate for or against federal candidates.  This decision does not impact the Internal Revenue Code's strict prohibition on Section 501(c)(3) organizations in conducting political campaign intervention activities.  It does, however, provide greater opportunities for Section 501(c)(4), 501(c)(5) and 501(c)(6) to spend general treasury funds to conduct political campaign activities at both the federal and state levels, provided such activities are independent from the candidate they support and are not in any way coordinated with the candidate.  Such organizations are still prohibited from contributing directly to candidates' campaigns.  This ruling also did not change the Internal Revenue Code and regulations regarding obtaining and maintaining tax-exempt status and the taxation or other treatment of political campaign intervention activities and expenses. 

Posted by Laura Lo Bianco at 1:53 PM | Email Post Email Post
Categories: Default

Nov 23 2009

Nonprofit Update: Timing Asset Valuations for Private Non-Operating Foundations

In light of substantial recent declines in real estate values in this county, now may be an opportune time for private non-operating foundations ("foundations") to reappraise the value of their real property holdings. By doing so, such foundations may reduce the amount of their minimum required annual distributions, which amount is directly tied to the aggregate fair market value of their assets. Foundations that reappraise their real estate holdings in accordance with federal regulations will not be required to reappraise such holdings for another five years, thus locking in current values for several years. If foundations wait to reappraise their real estate holdings, the real estate market may improve, and the foundations may thereby miss the opportunity to lock in current values and reduce distribution obligations.

To read the entire Update, please click on the link below.

http://www.fclaw.com/newsletter/materials/NonprofitUpdate11-23-09.pdf

Posted by Laura Lo Bianco at 11:04 AM | Email Post Email Post
Categories: IRS

Nov 16 2009

TOP 10 ROBERT'S RULES OF ORDER

The following are the top 10 parliamentary rules from Robert's Rules of Order from a legal perspective (not necessarily in order of importance):
 
1.  State law governs nonprofit corporations and some laws may be modified by the organization's governing documents.  The organization's corporate charter (e.g. Articles of Incorporation) supersede all other documents.  The organization's bylaws (or sometimes called the constitution) take precedent over rules of order of parliamentary procedure, which may be created by the organization or adopted from Robert's Rules of Order or other written parliamentary procedure.  However, if a conflict exists among these documents, it leaves the door open for the organization's actions to be disputed or challenged.
 
2.  Only public or semi-public bodies must hold their meetings in public in accordance with applicable state law.  Nonprofit organizations that are not considered public or semi-public bodies may include only those persons invited (e.g. directors for a board meeting or members for a membership meeting) and may exclude all others.
 
3.  Nonprofit organizations who open their meetings to others may hold executive sessions consisting of only invited persons to discuss private matters, such as discipline matters. 
 

4.  No legal action may be taken without a quorum present.  Many state laws, however, authorize the nonprofit corporation to adopt in its governing documents a rule that that once a quorum is achieved it is considered to exist until the meeting is adjourned, regardless of the departure of one or more persons.
 
5.  A main motion is lowest in priority and may be postponed indefinitely.

 
6.  A motion made by the board to the members or by a committee to the board need not be seconded.
 
7.  A motion to reconsider a motion that has already been decided may only be made by a member who voted with the prevailing side.  For example, if the motion was approved, only a member who voted in favor of the motion may make a motion to reconsider.  A motion to reconsider must be made on the same day as the passed motion if during a one day session or by the following day if during a session that is more than one day.  Different rules apply if the action was taken by a standing or special committee.
 
8.  A motion to rescind or amend something previously adopted may be made by any member at any time, but previous notice of the intent to make the motion is required if only a majority vote is obtained.
 
9.  If a motion has been acted upon and such acts can not be undone, a motion to reconsider, rescind or amend is improper.
 
10.  A motion to ratify may be used to confirm or make valid an action already taken that cannot become legally valid until approved by the appropriate body of the organization.  For example, if action was taken at a properly called meeting at which a quorum was not present, ratification of such action would be proper to make the action legal.

Posted by Laura Lo Bianco at 9:00 AM | Email Post Email Post
Categories: Default

Oct 23 2009

Budget Cuts Affect ACC Handling of Nonprofit Filings

Due to budget constraints in the State of Arizona, the Arizona Corporation Commission (the agency that accepts filings and reports from nonprofit corporations doing business in Arizona) has had a significant reduction in funding.  This reduction has resulted in several actions that impact nonprofit corporations making filings and reports with the Arizona Corporation Commission. 
 
First, the decrease in funding has resulted in a decrease in staff and resources.  The turn-around time for filings will likely increase over the next six to twelve months, with regular filings taking as much as 250 days to be processed and expedited filings taking as much as 50 days to process.  While there may be some consideration given when a document needs to be filed on an emergency basis (for example, to complete a transaction), the Arizona Corporation Commission will likely not be staffed to handle "emergency" filings on a regular basis.

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Posted by FC Admin at 9:47 AM | Email Post Email Post
Categories: Tax Exempt

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