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