http://www.ericperkinslaw.com/index.php en eric@ericperkinslaw.com Copyright 2012 2012-02-06T02:09:03+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/second_mile_saga_a_big_wake-up_call_to_nonprofit_boards/ http://www.ericperkinslaw.com/index.php/whats-new/post/second_mile_saga_a_big_wake-up_call_to_nonprofit_boards/ Second Mile, the youth charity founded in 1977 by former Penn State assistant football coach Jerry Sandusky, is struggling for its very existence and will likely serve as a classic “worst nightmare” scenario for anyone involved in the nonprofit community for years to come.  To settle the first lawsuit filed against it, the organization agreed not to shut down or shift its assets to another entity without court permission.  The charity is also reportedly laying off employees in the face of a sharp drop in donations, and representatives of well-known advisory board members are resigning and demanding that their names be removed from the Second Mile web site.  Is the organization’s board of directors at risk for being held personally liable?  We shall see.  It is important to note that the primary role of a nonprofit board is to oversee the organization’s activities and affairs, not micromanage every detail.  Such oversight generally requires review of timely and accurate information, reasonable attention from board members, and loyalty to the organization, but it does not require board members to play the role of private investigators as part of their board service to search out misconduct or illegal activity unless specific warning signs of trouble are apparent.  This tragedy underscores the importance of taking nonprofit volunteer service seriously, doing your due diligence before agreeing to serve (e.g., confirming the organization has directors and officers insurance coverage in place), and exercising reasonable efforts to fulfill your fiduciary duties as an officer or director.   Nonprofit Organizations 2011-12-13T18:20:45+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_converts_to_b_corporation_for_access_to_capital/ http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_converts_to_b_corporation_for_access_to_capital/ According to a recent report by Forbes, CouchSurfing.org has decided to convert to a "B" or "Benefit" Corporation in order to receive $7.6 million in funding from Benchmark Capital and the Omidyar Network.  The now former nonprofit organization connects world travelers with locals across the globe with a user base of roughly three million people in 80,000+ cities.  Virginia recently became one of the first handful of states to pass "B" corporation legislation, thereby creating a new form of business entity that is established to pursue a socially beneficial purpose.  You can learn more about "B" corporations and the social entrepreneurship phenomenon at an upcoming conference organized by Richmond Unite.  Richard Branson will be the featured speaker.  Visit www.richmondunite.org for details and to register (also be sure to vote for the Richmond Tennis Association while you're surfing that site). Nonprofit Organizations 2011-08-31T20:19:49+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/irs_releases_revoked_list_of_nonprofit_organizations_including_over_6000_vi/ http://www.ericperkinslaw.com/index.php/whats-new/post/irs_releases_revoked_list_of_nonprofit_organizations_including_over_6000_vi/ The much-anticipated list of nonprofit organizations who have had their tax-exempt status revoked by the IRS for failing to submit the required Form 990 filing for three consecutive years (2007-2009) is hot of the press, and it appears that over 6,000 nonprofit organizations in Virginia made the list (although many suspect that a majority of the listed organizations are dormant).     What does this mean for those unfortunate--and most likely unsuspecting--organizations on the "revoked" list?  Well, it means several things:    1.  The organization must submit a new Form 1023 (or Form 1024 if applicable) if it wishes to regain the tax-exempt status that was officially terminated effective May 17, 2010.  Otherwise, donations to the organization are no longer tax-deductible and the organization must gear up to start filing corporate income tax returns.  There could be significant ramifications at the state and local levels too.    2.  The organization seeking reinstatement of its tax-exempt status must decide whether to make a special request for the IRS to grant retroactive effect for its exempt status.  If so, then additional filings will be necessary, such as Form 990 filings for years that none were filed.  Absent a special request, the IRS will recognize its tax-exempt status effective the date the new Form 1023 was filed.    3.  Due to the anticipated spike in filings, expect turnaround time on Form 1023 filings to increase for the foreseeable future (still no word on when the electronic Form 1023 filing system--once planned for a 2010 debut--will be operational). Nonprofit Organizations 2011-06-09T20:33:19+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_to_speak_on_charity_event_compliance_issues_at_virginia_fundraising/ http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_to_speak_on_charity_event_compliance_issues_at_virginia_fundraising/ Richmond business and nonprofit lawyer Eric Perkins will lead a workshop at the Virginia Fund Raising Institute 2011 on July 18-19, 2011 at the Wyndham Virginia Crossings Conference Center.  The workshop will discuss a variety of often-overlooked federal and state requirements and compliance issues that arise in the context of fundraising events such as charity dinners, auctions, raffles, and other special events commonly sponsored by nonprofit organizations.  These events are critical to the success (if not survival) of many nonprofit organizations throughout Virginia, but if proper care is not given to compliance with applicable laws and regulations, legal liability and public embarrassment can result. Nonprofit Organizations 2011-03-28T19:36:52+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/connectrichmond_nonprofit_workshop_a_big_success/ http://www.ericperkinslaw.com/index.php/whats-new/post/connectrichmond_nonprofit_workshop_a_big_success/ I was pleased to see over three dozen nonprofit leaders and organizers in attendance at last Wednesday's workshop organized by ConnectRichmond.  We covered a lot of ground in 90 minutes, including: 1.  The benefits of the Virginia nonstock corporation for organizing a new nonprofit organization and how to form one. 2.  The logistics of preparing IRS Form 1023. 3.  State regulation of charitable solicitations. 4.  The different versions of Form 990 and the potential consequences of not making the required annual filings. 5.  Why the corporate secretary is so important from a corporate governance perspective. Given the great response, be on the lookout for other worskhops in 2011 for start-up nonprofit organizations and their leaders! Nonprofit Organizations 2011-02-27T01:04:53+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_tip_3_for_2011_check_your_exempt_status_on_the_new_nonfiler_revoc/ http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_tip_3_for_2011_check_your_exempt_status_on_the_new_nonfiler_revoc/ This is a "heads up" to small nonprofit organizations--the IRS will soon begin to publish and maintain a list of organizations that have had their federal tax-exempt status automatically revoked for failing to file an annual information return or notice with the IRS for three consecutive years.   The list will provide, among other information, the name, employer identification number,  last known address, and effective date of revocation.  The list, which will be updated on a monthly basis, will also be subdivided by geographic location for ease of reference.  If your organization ends up on this list, then you must reapply for recognition of tax-exempt status, so be sure you are current on your Form 990 filing obligations. Nonprofit Organizations 2011-02-25T18:14:04+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_to_speak_at_upcoming_connectrichmond_nonprofit_workshop/ http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_to_speak_at_upcoming_connectrichmond_nonprofit_workshop/ ConnectRichmond is sponsoring a free workshop on "When and How to Start a Nonprofit Organization" on Wednesday, February 23, 2011 from 12:00-1:30 pm at Senior Connection, 24 East Cary Street, Richmond, VA.  Richmond business and nonprofit attorney Eric Perkins will be the featured speaker discussing topics such as:  the different legal structures for a new nonprofit organization, start-up documentation, the incorporation process, applying for recognition of tax-exempt status from the IRS, why your corporate secretary is the unsung hero of your organization, and other helpful tips for new nonprofit organizations and their leaders.  Call (804) 827-2168 to register. Nonprofit Organizations 2011-02-12T02:34:44+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_tip_2_for_2011_have_you_updated_the_irs_on_your_ss-4_responsible_/ http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_tip_2_for_2011_have_you_updated_the_irs_on_your_ss-4_responsible_/ Leadership positions at most nonprofit organizations change hands frequently, with most nonprofit Presidents serving terms between 1-3 years.  One often-overlooked compliance requirement relates to information provided on IRS Form SS-4 when an organization first obtains a federal employer identification number (EIN).  According to the IRS, all information provided on the Form SS-4 should be accurate and kept up-to-date at all times.  If such information subsequently changes, the IRS expects you to let them know because they want to know who to contact in the event a tax matter arises which they need to discuss with the responsible party for the tax-exempt organization.  While there is no specific IRS form, an organization can address this compliance issue by sending the IRS a  letter with the new information.  For Virginia nonprofit organizations, the appropriate IRS office to direct such updates is as follows:   Internal Revenue ServiceStop 343G Cincinnati, OH USA 45999 Nonprofit Organizations 2011-01-24T19:33:16+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_tip_1_for_2011_confirm_which_version_of_form_990_you_need_to_file/ http://www.ericperkinslaw.com/index.php/whats-new/post/nonprofit_tip_1_for_2011_confirm_which_version_of_form_990_you_need_to_file/ In a rare instance where a compliance burden is actually lessened rather than increased, smaller tax-exempt organizations are now able to shift to the simpler Form 990-N (e-Postcard) for their 2010 annual information reporting. The IRS has issued guidance (Revenue Procedure 2011-15) confirming that more tax-exempt organizations are now eligible to file the e-Postcard rather than the more extensive Forms 990 or 990-EZ. For tax years beginning on or after January 1, 2010, most exempt organizations whose gross annual receipts are normally $50,000 or less can file the e-Postcard (a very short and simple online filing). The threshold was previously set at $25,000. As a reminder, it is an exempt organization’s annual gross receipts or total assets that determine which of the three versions of Form 990 it is required to file. Nonprofit Organizations 2011-01-18T02:09:44+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_law_welcomes_new_exempt_organizations/ http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_law_welcomes_new_exempt_organizations/ Perkins Law was pleased to assist the following nonprofit organizations with their corporate structuring, entity formation, and obtaining recognition of tax-exempt status from the IRS in recent months: 1.  Short Pump Rotary Club Foundation--A charitable community service entity formed as a fund raising arm of the Short Pump Rotary Club civic organization.  The Foundation will raise funds to support various charitable activites and organizations in the Short Pump area and throughout the region. 2.  RSOL of Virginia--A social welfare organization formed to promote the common good of the community through educational, legislative, advocacy, and charitable efforts to improve Virginia’s sex offender laws and promote the rights of individuals affected by those laws.     Nonprofit Organizations 2010-10-10T00:44:29+00:00