Working with your nonprofit to make our world a better place
I am an Oregon nonprofit lawyer and historian that has enjoyed serving nonprofit organizations since 1978. I provide a wide range of legal services as well as trainings and workshops on a variety of topics.
I invite you to explore the website to learn more about services I provide, get updates on current news impacting nonprofits in Oregon and access free form and policy templates.
Boards of nonprofits have come under much more intense scrutiny in the last 15 years. There is a great deal of confusion about what boards are supposed to do. If the board gets involved in corporate operations, it will often hear cries that it is micromanaging the organization. If the board allows its executive director to run the organization and something significant goes wrong, the finger gets pointed at the board. What’s a board to do?
After 35 years of working with nonprofit boards, I’ve come to the conclusion that there are lots of ideas about board responsibilities and relatively little clarity about what the law actually requires. I’ve listened to many attorneys (including me), consultants and government regulators talk about the board’s duties to act reasonably, to be loyal to the corporation and to follow the corporate mission. The problem is that these answers tend to beg the question. How do we know what’s reasonable in a particular situation?
I posted an update a few months ago about the relatively new IRS requirement that requires exempt organizations that don’t have to file the Form 990 or Form 990 EZ to file an informational form, the Form 990N. Form 990N is a simple one page form that can be found on the IRS website and can only be filed electronically. If your organization fails to file this form (or any other Form 990 or 990EZ return due from you), for three years, the IRS will automatically revoke your exemption. This applies to virtually all organizations exempt under §501(c), not just the (c)(3)s.
Here’s the latest twist on what is becoming a nightmare for the IRS as well as for many nonprofits.
Let’s say you’re a nonprofit that has filed for tax exemption but your application is still in process. Even though the IRS has not ruled on your exemption application, the IRS requires that you file the Form 990N or you can lose your exemption.
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