Tax-Exempt News and Updates
Many of our business clients have had drastic workforce changes during the COVID-19 pandemic, including having existing employee
s relocate or taking on new employees in new jurisdictions.
As a result, these businesses may be subject to new or increased tax requirements, such as: withholding statepersonal income taxes, collecting and remitting sales or use taxes, or allocating and paying state corporate income taxes.
The Various Models of Fiscal Sponsorship: How much do the differences matter?
Many social enterprises go through a developmental phase of fiscal sponsorship – being the recipient organization (fiscal sponsoree) relative to a sponsoring 501(c)(3) organization (fiscal sponsor). The fiscal sponsor typically supports the sponsoree, using one of several alternative approaches.
Founders of Nonprofits Ask: Which Tax-Exemption Application Should I File?
The IRS provides two forms of its Form 1023: Application for Recognition of Tax-Exempt Status, and most organizations seeking tax-exemption under Section 501(c)(3) will need to file either the standard, “long form” Form 1023, or the much shorter, “streamlined” Form 1023-EZ (though a handful of organizations may qualify for tax-exempt 501(c)(3) status without filing either of these forms).
IRS: “Impact Investment Advising is not a Charitable Activity”
In October 2020, the IRS released a private letter ruling (PLR 202041009) denying tax-exempt status to a nonprofit.
Nonprofits owning for-profits: Recent IRS guidance on “excess business holdings”
Private foundations and donor-advised funds – or DAFs – are prohibited from holding more than 20 percent of a non-exempt business. This rule prevents affected organizations from purchasing such a prohibited interest, but it can also be problematic when affected organizations are gifted a prohibited business interest.