http://www.ericperkinslaw.com/index.php en eric@ericperkinslaw.com Copyright 2010 2010-08-25T19:30:07+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/form_990_relief_for_small_nonprofits_a_possibility/ http://www.ericperkinslaw.com/index.php/whats-new/post/form_990_relief_for_small_nonprofits_a_possibility/ According to the Pension Protection Act of 2006 and previous, unequivocal announcements from the IRS, nonprofits neglecting to file Form 990 (whichever of the three versions it was supposed to file) for three consecutive years automatically lost their tax-exempt status this week (at least those who operated on a calendar year basis for tax purposes), and the only way to cure the problem would be to file another Form 1023, pay the required filing fee, and start all over.  The IRS’s FAQ page states very clearly that this is statutory law.  No waivers, no appeals, no exceptions, no mea culpas.  But now, according to Doug Shulman, IRS Commissioner, the IRS is considering granting some measure of grace to small organizations, presumably those who were required to file Form 990-N (the e-postcard).  This would seemingly require an act of Congress to amend the 2006 law that imposed this strict requirement, but we will have to wait and see what transpires in the coming months.  In any event, the IRS does not anticipate starting to send notices (i.e., the bad news) to organizations that have lost their tax-exempt status until the end of the year. Nonprofit Organizations 2010-05-19T19:43:49+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/may_18_2010_dooms_day_for_thousands_of_nonprofit_organizations/ http://www.ericperkinslaw.com/index.php/whats-new/post/may_18_2010_dooms_day_for_thousands_of_nonprofit_organizations/ As warned in prior postings on this site, May 18, 2010 is the date on which several hundred thousand tax-exempt organizations will lose their tax-exempt status under provisions of the Pension Protection Act of 2006 providing for the automatic revocation of tax-exempt status of any exempt organization that has failed to file the required Form 990 for three consecutive years.  This year marks the third year since this law went into effect.  For most organizations, year three is marked by the due date of their Form 990 for the 2009 tax year (May 17 for calendar year organizations).  Organizations required to file Form 990 or Form 990-EZ can perhaps buy themselves some extra time by filing an extension in a timely fashion.  There is no option to extend for smaller organizations required to file Form 990-N.  If their tax-exempt status is automatically revoked, the organizations will be required to reapply for tax-exempt status.  Nonprofit Organizations 2010-05-04T23:21:14+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_slated_to_speak_at_regional_workshop/ http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_slated_to_speak_at_regional_workshop/ Richmond business attorney Eric Perkins is scheduled to be a speaker at the 2010 USTA/Mid-Atlantic Section Community Tennis Development Workshop on January 30, 2010 in McLean, Virginia.  Perkins will discuss the basics of organizing and operating a nonprofit sports organization, including corporate formation and governance issues, applying for tax-exempt status, annual filing requirements, and other compliance issues and emerging trends in the nonprofit community.  For additional details or to register for the event, please click on the following link: http://www.active.com/event_detail.cfm?event_id=1814948. Nonprofit Organizations 2009-12-02T04:12:15+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/irs_form_990n_epostcard--potential_death_trap_for_small_nonprofits/ http://www.ericperkinslaw.com/index.php/whats-new/post/irs_form_990n_epostcard--potential_death_trap_for_small_nonprofits/ Most small tax-exempt organizations (i.e., those with annual gross receipts of $25,000 or less) must comply with a new IRS reporting requirement that went into effect in 2008.  Commonly referred to as the ePostcard because it is filed electronically, the form itself is quite simple and straightforward, the problem is with the severity of the penalty for noncompliance. Namely, an organization that fails to file the required ePostcard for three consecutive years will automatically lose its tax-exempt status. Nonprofit executives, directors, and officers should have a general understanding of federal and state reporting requirements applicable to their organization. As it concerns the ePostcard (also known as Form 990N), here are a few commonly asked questions: QUESTION:  What organizations are required to file the ePostcard? ANSWER:  This is a reporting requirement for smaller exempt organizations that typically have annual gross receipts of $25,000 or less.  Churches are excluded and are not required to file an ePostcard.  Exempt organizations that fall under a group exemption are also not required to file an ePostcard.  Also, private foundations and supporting organizations are required to file different forms and, therefore, do not file ePostcards. QUESTION:  What is the deadline for filing the ePostcard? ANSWER:  The ePostcard is due each year by the 15th day of the fifth month after the close of the organization's tax year.  For example, if an organization's tax year ends on December 31, the deadline for filing its ePostcard would be May 15 each year. QUESTION: How are ePostcards filed? ANSWER:  The ePostcards are filed electronically by visiting http://epostcard.form990.org/. QUESTION: What information is reported on the ePostcard? ANSWER:  Information disclosed on the ePostcard includes:  the organization's legal name and mailing address, EIN, website address, tax year, name and address of a principal officer, and confirmation that the organization's annual gross receipts are normally $25,000 or less. Perkins Law, PLLC offers a flat fee package of corporate governance, entity management, and compliance services (including ePostcard issues) for nonprofit organizations of all sizes.  E-mail (eric@ericperkinslaw.com) or call Eric Perkins (804.205.5162) for a free consultation. Nonprofit Organizations 2009-06-22T01:26:00+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/is_it_tme_for_your_church_to_incorporate/ http://www.ericperkinslaw.com/index.php/whats-new/post/is_it_tme_for_your_church_to_incorporate/ The benefits of conducting business and charitable activities through separate legal entities have been widely accepted for a long time and for a variety of reasons.  Prior to 2002, however, churches in Virginia were prohibited from incorporating thanks to language found in the Virginia Constitution that forbid any "church or religious denomination" from incorporating within the state.  Instead, Virginia churches were required to operate as unincorporated associations and appoint trustees to hold title to church property in trust on behalf of the church and fulfill other responsibilities.  In 2002, a U.S. District Court in Falwell v. Miller concluded that the foregoing language in Virginia's Constitution violated the Free Exercise Clause of the U.S. Constitution, effectively opening the door for churches to incorporate.  There are a variety of reasons why a church should consider incorporating: 1.  Limited liability protection to directors, officers, and other church leaders.  Generally speaking, leaders ofunincorporated associations face greater risk of personal liability for debts and obligationsof the association than directors and officersof acorporation. 2.  Corporations have perpetual life (i.e., the legal existence of a corporation is not affected by the death or retirement of a director or officer). 3.  The corporate form offers greater stability and status from a legal perspective.  Corporations can hold title to assets (as opposed toindividual trustees of a church organized as an unincorporated association), enter into contracts, and sue and be sued, among other legal rights defined by state law. 4.  It is easy and inexpensive to incorporate.  The filing fees for a church to incorporate with the State Corporation Commission are less than $100. While proper corporate formalities must be maintained to preserve the separate legal existence of the corporation, this is not an onerous burden.   5.  Incorporating may provide a much-needed opportunity for a church to review, update, and improve its existing governing documents and organizational structure. For additional information about the incorporation process or transitioning to a corporate form, please call Eric Perkins at (804) 205-5162 for a free consultation and flat fee quote. Nonprofit Organizations 2009-06-21T03:27:49+00:00