Not-for-profit organizations face a distinct set of compliance challenges. Though they are not subject to income tax, these organizations have filing responsibilities with the Internal Revenue Service and in the state(s) where funds are solicited. In addition, there are traps for the unwary with potential liabilities associated with unrelated business income tax, self-dealing, and maintaining exempt status.
Tax law for not-for-profits and higher education institutions is replete with exemptions, exceptions, and limitations, which can make deciphering the Internal Revenue Code and regulations very challenging. When combined with increasing oversight by federal, state and local governments, donors, grantors, media, and the public, tax compliance an ongoing endeavor. Our not-for-profit tax professionals actively work with organizations’ members or board to consider their goals and plans and have worked with many organizations in this capacity.