Is Your 501(c)(7) Social Club Really Tax-Exempt? Your club has tax-exempt status. But does that mean you are safe? Not always. A 501(c)(7) social club can be exempt from federal income tax when it is organized for pleasure, recreation, and other nonprofit purposes. Think country clubs, hobby clubs, social clubs, recreational clubs, and similar membership …
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Is Your Trade Association Really a 501(c)(6)? What Business Groups Need to Know You started a trade association to help your industry.You collect dues. You host meetings. You talk about issues affecting your members. Maybe you advocate for better rules, better standards, or better business conditions. But here is the question: Is your organization really …
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501(c)(4) Organizations: What They Are, and Where People Get It Wrong A lot of people say: “We don’t want a 501(c)(3). We want a 501(c)(4).”They usually mean one thing: They want more flexibility.That’s not wrong. But it’s also where problems start. What a 501(c)(4) Actually Is A 501(c)(4) is a social welfare organization. That typically …
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How Nonprofits Can Work With For-Profit Partners Without Losing Exemption Most nonprofit boards assume they are in “good standing.” They filed their 990. They haven’t heard from the IRS. No one has complained. That does not automatically mean your organization is in good standing in Massachusetts. If you operate in the Commonwealth, you answer to …
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How Nonprofits Can Work With For-Profit Partners Without Losing Exemption Many nonprofit leaders believe one thing: “If we’re good with the IRS, we’re fine.” In Massachusetts, that assumption can be dangerous.It’s not just the IRS that regulates nonprofits. The Commonwealth does too — and the state has real enforcement power. The IRS Is Only Half …
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How Nonprofits Can Work With For-Profit Partners Without Losing Exemption You want to partner with a business. Sponsorship money. A co-branded program. Maybe even a joint venture.And then someone asks the question that should stop you in your tracks: “Will this mess up our 501(c)(3) status?”It can—if the deal is sloppy. But nonprofits can work …
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Charity in Name Only? How the IRS Looks at “Private Benefit” and “Inurement” When the IRS looks at your nonprofit, it’s not just asking:“Are you doing good things?”It’s also asking:“Is anyone on the inside getting a deal they shouldn’t?”That’s where private benefit, inurement, self-dealing, and excessive compensation come in. If you’re a founder, board member, …
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Corporate “Housekeeping” for Nonprofits: Bylaws, Minutes, and More For most nonprofits, “corporate housekeeping” sounds like the stuff you’ll get to… someday. Then an auditor asks for board minutes you don’t have. Or a funder wants copies of your bylaws. Or a dispute comes up and someone says, “Prove the board actually approved that.” And suddenly, …
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When a Nonprofit Loses Tax-Exempt Status: What Happens Next? When a nonprofit loses tax-exempt status, it usually doesn’t start with a dramatic IRS raid. It starts with missed filings. A deadline comes and goes. Then another. Then another. And one day you find out: “The IRS automatically revoked your tax-exempt status… three years ago.” Now …
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Laura A. Brown Featured in Mass Lawyers Weekly on “Bombshell” Tax Court Ruling The Massachusetts Appeals Court recently handed down a significant decision in Welch v. Commissioner of Revenue, ruling that a former resident’s stock sale was subject to Massachusetts taxation. The decision signals a potential expansion of the Department of Revenue’s reach into non-resident …
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