1 / 17

TAX EXEMPTION AND RELATED ISSUES FOR THE NOT FOR PROFIT (NFP) CORPORATION

TAX EXEMPTION AND RELATED ISSUES FOR THE NOT FOR PROFIT (NFP) CORPORATION. REUBEN S. SEGURITAN 7 Penn Plaza, Suite 222 New York, NY 10001 Tel. No. (212) 695-5281; Fax No. (212) 563-2664 Email: seguritanlaw@yahoo.com Website: www.seguritan.com. SETTING UP THE NFP. Incorporation

xantara
Download Presentation

TAX EXEMPTION AND RELATED ISSUES FOR THE NOT FOR PROFIT (NFP) CORPORATION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. TAX EXEMPTION AND RELATED ISSUES FOR THE NOT FOR PROFIT (NFP) CORPORATION REUBEN S. SEGURITAN 7 Penn Plaza, Suite 222 New York, NY 10001 Tel. No. (212) 695-5281; Fax No. (212) 563-2664 Email: seguritanlaw@yahoo.com Website: www.seguritan.com

  2. SETTING UP THE NFP • Incorporation • certificate of authority if NFP is foreign corporation doing business in NYS • 501(c)(3) tax exempt status (Form 1023) • 5 year advance ruling period to maintain public charity status • NYS income tax exemption (CT-247) • NYS sales tax exemption (ST-119.2) • Registration with NYS Attorney General (CHAR 410)

  3. REGISTRATION WITH NYS ATTORNEY GENERAL • Types of Registration • Article 7A to solicit contribution • EPTL for incorporated or doing business • Dual for combined Article 7A and EPTL • When to Register • Article 7 A – 30 days prior to solicitation • EPTL – within 6 months of activity • Dual – whichever is earlier

  4. Attachments • Certificate of Incorporation, By-laws, IRS Form 1023 and IRS tax exemption letter • Penalties for failure to register • Article 7A - $1,000 per violation and up to $100 per day for willful non-compliance • EPTL - $10 per day up to $1,000 for each failure • Dual – combined penalties

  5. Unified registration statement (multi-state) • in lieu of Art. 7A only • used by 39 states • Exemption • See CHAR 410 instructions • File CHAR 410 with Schedule E to confirm exemption

  6. ANNUAL FILING REQUIREMENTS • Internal Revenue Service • Form 990 – if gross receipts is $100,000 or more • Form 990EZ – if gross receipts more than $25,000 but less than $100,000 and total assets less than $250,000

  7. Form 990N – if gross receipts less than $25,000 • Form 990T – if unrelated business income is $1,000 or more • Employment tax return • Enforcement tool to find out income and expenses, assets, programs, excess benefit transactions, self-dealing and lobbying activities

  8. Penalties • revocation of tax exempt status if Form 990, 990EZ or 990N not filed for 3 consecutive years • $20 per day until filed up to $10,000; $100 penalty up to $50,000 if gross receipts over $1 million • no penalty for late filing of 990N • When to file • 15th day of the 5th month

  9. NYS Attorney General (CHAR 500) • Form CHAR 500 for all registrants with a copy of Form 990, 990 EZ and 990T • Additional attachments • Article 7A and dual – accountant’s audit and financial statement if revenue over $250,000; accountant’s review and financial statements if revenue over $100,000 to $250,000

  10. When to file • Article 7A and dual – 4 ½ months after end of fiscal year • EPTL – 6 months after end of fiscal year • Exemption • Article 7A and dual – contribution not exceeding $25,000 and did not use professional fundraiser • EPTL – gross receipts did not exceed $25,000 and assets did not exceed $25,000 • Penalty – same as in CHAR 410

  11. ORGANIZATION AND GOVERNANCE • Bylaws • Board of directors • Legal duties of directors • Duty of care • Duty of loyalty • Duty of obedience

  12. Enforcement of director’s duties • by Attorney General • by another director • by 5% of members • Personal liability of directors • accidents and employment • volunteers not liable unless with gross negligence or intent to harm

  13. Corporate protection • liability insurance • indemnification of officers, directors and employees • placing risks on contractors

  14. OTHER COMPLIANCE ISSUES • Prohibited activities • political campaigns • substantial lobbying • private benefit or inurement • Record Keeping • documentation of income and expenses • organizational documents • retention period

  15. Disclosure • annual returns • tax exempt documents • Fundraising • written acknowledgement for contribution of $250 or more • quid pro quo contribution of $75 or more • use of professional fundraisers

  16. raffles • license required if net proceeds is $30,000 or more • verified statement if net proceeds is $5,000 or more • restrictions • who, where, when to sell • separate bank accounts • final accounting or verified statement

  17. Dissolution • board resolution • membership approval • asset distribution

More Related