Nonprofit Tax Matters



We use a proactive and preventative approach to create strong structures and provide predictable and desirable tax outcomes by maintaining regular contact with both grant-makers and grant-seekers.

Our approach

The labyrinth of tax regulations is becoming increasingly complex and nonprofit organizations are in constant motion just trying to keep up with issues relating to:

  • Unrelated business income tax
  • Tax-exempt status
  • Public charity vs. private foundation status
  • Private benefit
  • Political activity
  • Lobbying
  • The use of subsidiaries and joint ventures
  • Excess benefits excise taxes (IRC Sec. 4958)
  • Private foundation excise taxes (IRC Chap. 42)

We are at the forefront on unrelated business tax issues and work with nonprofit organizations to avoid and/or minimize its impact, including how to defend transactions on audit.

Who we work with

  • Foundations
  • Charitable organizations
  • Colleges and universities
  • Hospitals and health care systems
  • Religious institutions
  • Trade associations
  • Social clubs, museums and cultural organizations
  • Professional schools

Recent experience

  • We have worked with private foundation clients to structure investments abroad and avoid the imposition of U.S. taxes. The firm successfully prosecuted a number of private letter rulings before the Internal Revenue Service National Office to approve one of these tax-saving approaches.
  • We successfully challenged the revocation of the exemption of a multi-million dollar affiliate of a nationally known health care system by structuring a solution that met the requirements of the IRS to maintain exempt status.
  • We represented a charitable organization accused by the IRS of paying unreasonable compensation to its CEO, and settled a proposed $1.0 million assessment against the CEO for $10,000.
  • We engineered a novel relationship between a corporate funder and some local foundations to allow for enhanced giving in pursuit of corporate philanthropy.
  • We have helped several charitable organizations avoid private foundation status without the need to satisfy the annual public support tests by forming them as medical research organizations or supporting organizations.
  • We developed and implemented a post-merger reorganization plan for a major national trade association, which streamlined numerous nonprofit and for-profit subsidiaries, eliminated duplication and creatively used LLCs (limited liability corporations) to minimize unrelated business income taxes.

The new tax plan could impact charitable giving

Hearst Television | January 01, 2018

Washington DC M&A and corporate transactions partner Ken Silverberg is interviewed in this news segment about how the new tax plan may affect charitable giving.

Artists’ commissions, tech gifts and guns: the legal issues facing US museums

The Art Newspaper | May 11, 2017

This article discusses the most pressing legal questions facing museums. Washington DC M&A and corporate transaction partner Mike Cooney is quoted on the possible legislation by Congress to limit income tax deductions for charitable donations.

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