Keeping Your Non Profit in Compliance With Tax Laws

Our attorneys assist clients in complying with federal and state laws regulating the activities of nonprofits and tax-exempt organizations.

Federal Tax Law

Federal tax law provides tax benefits to nonprofit organizations recognized as exempt from federal income tax under Internal Revenue Code (“IRC”) Section 501(c)(3). The IRC requires that tax-exempt organizations must comply with federal tax law to maintain tax-exempt status and avoid penalties.

Once a public charity has completed the application process and has established that it is exempt under Section 501(c)(3), the charity’s officers, directors, trustees and employees must ensure that the organization maintains its tax-exempt status and meets its ongoing compliance responsibilities.

A 501(c)(3) public charity that does not restrict its participation in certain activities and does not absolutely refrain from others, risks failing the operational test and jeopardizing its tax-exempt status. These limitations and requirements include:

  • Private Benefit and Inurement

  • Political Campaign Intervention

  • Legislative Activities (Lobbying)

  • Federal Information Returns, Tax Returns, and Notices

  • Form 990-T, Exempt Organization Business Income Tax Return

  • Record Keeping

  • Required Disclosures

  • Charitable Contributions—Substantiation and Disclosure

California State Law

  • Secretary of State Filings

  • Income Tax Returns

  • Attorney General Registry of Charitable Trusts

  • Annual Minutes

Contact Us To Learn More

Want to discuss how to keep your nonprofit in compliance with tax laws? Contact the nonprofit law group at Henderson, Caverly & Pum LLP today.

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