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Five Tax Traps for Business Lawyers Advising Nonprofit Organizations

October 24, 2022 Podcast
EO Radio Show – Your Nonprofit Legal Resource

Welcome to EO Radio Show – Your Nonprofit Legal Resource. Many business lawyers are called on to advise public charities such as their kids' schools and sports leagues, soup kitchens, and homeless shelters, museums and cultural institutions, community foundations, and the occasional private foundation set up by a good client.

While much of the legal work for established nonprofits is the same as for any other business client, the tax-exempt status of these entities brings with it a host of income property and sales tax rules that are not necessarily obvious.

This episode highlights the most likely tax issues to arise for public charities and private foundations typically organized as corporations that are described in Internal Revenue Code section 501(c)(3). Similar traps exist for other common kinds of nonprofits. For example, social welfare organizations, trade associations, and social clubs, but other special rules also apply to those types of entities and are beyond the scope of this episode.



Resources:

IRS Form 990 and Schedules A through R: https://www.irs.gov/forms-pubs/about-form-990

IRS Form 990 EZ https://www.irs.gov/forms-pubs/about-form-990-ez

IRS Form 990-N https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard

Description of Statutory Employees https://www.irs.gov/charities-non-profits/exempt-organizations-who-is-a-statutory-employee

EO Radio Show #6: Nonprofit Basics: Election Year Issues for Private Foundations and Public Charities Part 1: Candidate Campaign Intervention

EO Radio Show #7: Nonprofit Basics: Election Year Issues for Private Foundations and Public Charities Part 2: Legislative Lobbying Activities by Public Charities

EO Radio Show #8: Nonprofit Basics: Election Year Issues for Private Foundations and Public Charities Part 3: Private Foundation Approaches to Policy Advocacy Allowed by the Internal Revenue Code

If you have suggestions for topics you would like us to discuss, please email us at [email protected]

Additional episodes can be found at EORadioShowByFarella.com

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

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