Tax Archives - Fraternal Law

IRS Update: New Electronic Requirements and Developments

Amy M. Hebbeler, Fraternal Law Partners, amy.hebbeler@manleyburke.com Patrick K. Hogan, Fraternal Law Partners, phogan@manleyburke.com The pandemic and labor shortage has compelled organizations to explore virtual options for various operations. The Internal Revenue Service is not an exception. As more filings...

IRS Proposed Group Exemption Rules

Amy Hebbeler, Fraternal Law Partners, Amy.Hebbeler@manleyburke.com Group exemptions are an efficient tool that tax-exempt organizations utilize, especially national fraternities and sororities, in streamlining the federal exemption process for their subordinates. Under a group exemption, subordinate organizations affiliated with a central...

Overtime Regulation Revamp Continues Forward Under Trump Administration With Two Notices of Proposed Rulemaking

John Christopher, Manley Burke, john.christopher@manleyburke.com On Thursday, March 7th, the Department of Labor published a proposed rule which, if implemented, would substantially modify the rules governing overtime pay—including increasing the salary threshold for overtime exemption from $23,660 ($455/week) to $35,308...

Elections Have Consequences for Fraternal Law Too

Micah Kamrass, Manley Burke, mkmrass@manleyburke.com Like all other fields of law, fraternal law is highly dependent on our government decision makers. Congress passes laws, which are then enforced by the President and the Presidential appointees in the Executive Branch. Ultimately,...

Feds Confirm Greeks Exemption from Title IX

Tim Burke, Manley Burke, tburke@manleyburke.com “Social fraternities and sororities: Title IX does not apply to the membership practices of social fraternities and sororities.1 Those organizations are therefore permitted, under Title IX, to set their own policies regarding the sex, including...

... there are still plenty of misuses and abuses of tax exempt law to kick around

Sean Callan, Manley Burke, sean.callan@manleyburke.com So begins a recent story in Forbes.1 The story is an unflattering look at how Princeton eating clubs spend charitable (i.e., tax deductible) dollars. While eating clubs are not Greek organizations, the eating clubs fall...

Proposed Overtime Regulations Would Significantly Limit Overtime Exemptions

John Christopher, Manley Burke, john.christopher@manleyburke.com In response to President Obama’s March 13, 2014 Memorandum instructing the U.S. Department of Labor (DOL) to update the Fair Labor Standards Act (FLSA) regulations governing who qualifies for overtime, the U.S. Department of Labor...

IRS Announces Automatic Retroactive Reinstatement for Certain Organizations

John Christopher, Manley Burke, john.christopher@manleyburke.com On January 2, 2014, the Internal Revenue Service announced new procedures for reinstating the tax-exempt status of organizations that have had their tax-exempt status automatically revoked under section 6033(j) of the Internal Revenue Code (“Code”)...

IRS 2012 Annual Report & 2013 Workplan

John Christopher, Manley Burke, john.christopher@manleyburke.com Last month, the Exempt Organizations (EO) division of the the Tax Exempt and Government Entities section of the IRS issued its latest annual report and workplan (the "Report"). The Report contains some bits of information...

State Registration Requirements and Considerations

Jacklyn Olinger, Manley Burke, jacklyn.olinger@manleyburke.com As foundation executives in the Greek community are aware, both federal and state authorities are becoming increasingly focused on proper registration. Nearly all states require that a charity register if either (i) it is physically...

Group Exemption Update

John Christopher, Manley Burke, john.christopher@manleyburke.com Since 1940, the IRS has provided procedures under which an organization recognized by the IRS as being exempt under Section 501(c) could submit a request for recognition of exemption for a group of organizations that...

IRS Written Determination 201219026 The Charitable House Corporation Remains Elusive

John Christopher, Manley Burke, john.christopher@manleyburke.com We are often asked why charities cannot (or should not) own chapter houses. The question usually dovetails with an emphasized assertion “other groups are doing it and nothing has happened to them.” The primary benefit,...

IRS Exempt Organizations Division Recaps Accomplishments – Hints at Future Areas of Interest

John Christopher & Sean Callan, Manley Burke, john.christopher@manleyburke.com & sean.callan@manleyburke.com In February, 2012, the IRS Exempt Organizations Division released its FY 2011 Annual Report and its 2012 Work Plan. The reports contain valuable hints as to the issues concerning the...

FLSA Compliance for House Directors: Monitor Overtime with Caution and Care

Dianne Chipps Bailey & Susan Miller Huber, Robinson, Bradshaw & Hinson, PA, dbailey@rbh.com and shuber@rbh.com Sorority and fraternity house directors typically live where they work, which makes wage and hour compliance exceptionally challenging. The line between working and not working...

EDUCATION KEY TO IMPLEMENTING CHIA

John Christopher & Sean Callan, Dinsmore & Shohl, LLP When will the law change so that donations to house corporations are tax-deductible?" We get this question all the time. The answer is never, or at least no time soon. The...

DORMANT CHAPTER HOUSES

Dianne Chipps Bailey & Seth Huffstetler, Robinson, Bradshaw & Hinson, PA, dbailey@rbh.com & shuffstetler@rbh.com When a collegiate chapter of a national fraternity or sorority loses its charter or otherwise becomes dormant, whether permanently or temporarily, special attention must be paid...

NEW SMALL BUSINESS AND NONPROFIT HEALTH CARE TAX CREDIT

Paul Nidich, LL.M. The Patient Protection and Affordable Care Act, P. L. 111-148, signed into law by President Barack Obama on March 23, 2010, provides a health care tax credit for qualified small businesses and 501(c) organizations exempt from taxation...

IRS DENIES EXEMPTION TO LOCAL FOUNDATION

Sean Callan & John Christopher, Dinsmore & Shohl Ever since 1956, Greek organizations have understood that a tax-exempt IRC § 501(c)(3) educational fraternity foundation could award scholarships to members of its related fraternity without jeopardizing its tax-exempt status as an...

AUTOMATIC REVOCATION OF TAX-EXEMPT STATUS FOR FAILURE TO FILE IRS FORM 990

Dianne Chipps Bailey, Robinson, Bradshaw & Hinson The Pension Protection Act of 2006 requires the Internal Revenue Service (“IRS”) to revoke the tax-exempt status of organizations that fail for three consecutive years to file required Forms 990. These revocations will...

FSPAC HELPS GREEKS IN WASHINGTON

Tim Burke, Manley Burke, tburke@manleyburke.com The effort to convince the United States Congress to adopt the Stephanie Tubbs Jones Collegiate Housing and Infrastructure Act (CHIA) continues with strong support from the Fraternity and Sorority Political Action Committee (FSPAC). That bill,...

ENDOWMENT FUNDS AND THE UNIFORM PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT

Sean Callan, Dinsmore& Shohl The Uniform Prudent Management of Institutional Funds Act ("UPMIFA") is a law that has been adopted, in one form or another, in all but eight states. Its provisions update and replace the Uniform Management of Institutional...

TAX RETURN REDUX Or How I Learned to Stop Worrying And Love the New Form 990

Sean Callan, Dinsmore & Shohl For several years, the Internal Revenue Service ("IRS") has worked to redesign the Form 990 annual tax return filed by tax exempt organizations ("TEOs"), including fraternities, sororities and their foundations. The redesign process was based...

HOW TO HANDLE AN INTERNAL REVENUE SERVICE AUDIT

John Christopher, Dinsmore & Shohl No one likes to be audited by the Internal Revenue Service. However, as a recent audit of the Alpha Chapter House Corporation of the Kappa Alpha Order shows, preparation before an audit can make all...

IRS ELIMINATES ADVANCE RULING PROCESS FOR PUBLIC CHARITY STATUS

Barbara Schwartz Bromberg, Esq, Dinsmore & Shohl INTRODUCTION The IRS on September 9, 2008, issued temporary Income Tax Regulations which surprised and astonished the tax professionals community by eliminating the advance ruling process for a Section 501(c)(3) organization's public charity...

NEW PROPERTY TAX IN INDIANA?

Many national fraternities and sororities who have their headquarters in Indianapolis are carefully watching developments in the Indiana State Legislature which could make fraternity headquarters and chapter houses pay substantial property taxes. A bill currently pending in the Indiana Legislature...

SUMMARY OF SCHEDULES AND FILING PROFILE June 14, 2007

Redesign Schedule Topic Current/New Item To Be Completed By Comments A Public Charity Status Current Sch A Part IV All 501(c)(3) organizations Redesigned Sch A focuses exclusively on Public Charity status; May take the place of Form 8734 in...

DRAFT REVISED FORM 990 ISSUED

Barbara Schwartz Bromberg, Esq, Dinsmore & Shohl LLP INTRODUCTION On June 14, 2007, the IRS released for public comment a discussion draft of a redesigned and revised Form 990, Return of Organizations Exempt from Income Tax. This, of course, is...

FILING REQUIREMENTS FOR EXEMPT ENTITIES NOT CURRENTLY REQUIRED TO FILE FORM 990

Barbara Schwartz Bromberg, Esq, Dinsmore & Shohl Smaller organizations (those normally having no more than $25,000 of gross receipts each year), churches and some other organizations did not have to file annual information returns (Form 990) prior to the passage...

RESTRICTED FUNDS - SOMETIMES A DILEMMA FOR FRATERNITY FOUNDATIONS

Barbara Schwartz Bromberg, Esq., Dinsmore & Shohl LLP INTRODUCTION Because of the unique nature of fraternal foundations and the fact that many of their donors wish to establish named restricted funds that benefit a particular chapter or area of particular...

PRIMER ON SET ASIDE PROCEDURES

Barbara Schwartz Bromberg, Esq., Dinsmore & Shohl LLP INTRODUCTION It has been some time since we reviewed the rules surrounding set asides in this column and with many fraternal organizations' fiscal year ends and tax seasons approaching, this seems like...

KATRINA: DISASTER RELIEF BY FRATERNAL ORGANIZATIONS AND FOUNDATIONS

Barbara Schwartz Bromberg, Dinsmore & Shohl LLP Introduction: The recent hurricane disasters in the Gulf Coast region have prompted many fraternal organizations and their affiliated foundations to consider establishing disaster relief funds and providing relief to their needy...

REAL ESTATE TAXATION ON NONPROFIT CORPORATIONS

Tim Burke, Manley Burke, tburke@manleyburke.com In 1997, Case Western Reserve University leased the Magnolia House on its campus to the Zeta Pi Chapter of Alpha Phi Fraternity House Corporation. The University had little reason to believe that unlike the rest...

EDUCATIONAL GRANTS FROM FOUNDATION TO FRATERNITY

Barbara Schwartz Bromberg Introduction: Many times in the course of my practice, I am asked by fraternal organization clients, the appropriate parameters for requesting grants from their affiliated Code Section 501(c)(3) foundations. Similarly, fraternal foundations are concerned with the same...

IMPORTANT PROPOSED LEGISLATION FOR FRATERNITY HOUSING – AN UPDATE AND EVALUATION

Barbara Schwartz Bromberg Introduction: Readers who have followed this column over the years and who have a strong interest in Greek housing are aware that for many years the Internal Revenue Service has approved the finding by Code Section 501(c)(3)...

ANTI-GREEK BIAS MOVES OHIO TAX COMMISSIONER

The Ohio Tax Commissioner, Thomas M. Zaino, challenged the tax exemption of a sorority residence known as Magnolia House, owned by the Case Western Reserve University in Cleveland, Ohio. Alpha Phi has a chapter whose members live in Magnolia House...

GRANT AGREEMENTS BETWEEN FRATERNAL ORGANIZATIONS AND AFFILIATED FOUNDATIONS - THE TEN MOST COMMON MISTAKES

Barbara Schwartz Bromberg, Dinsmore & Shohl LLP Introduction: Everyone reading this article is probably familiar with the general guidelines that have been well known in the fraternal organization world since the issuance of the Excerpts from the Phi Gamma Delta...

NEW IRS PUBLICATION ON FRATERNITY FOUNDATION GRANTS

Barbara Schwartz Bromberg, Dinsmore & Shohl LLP Introduction: In October, 2002, the National Office of the Internal Revenue Service released its annual Continuing Professional Education (CPE) materials for 2003 relating to tax-exempt organizations. CPE materials are used for training IRS...

The Most Frequently Asked Questions Concerning New IRS Guidelines on Fraternity Foundation Funding of Educational Areas In Fraternity Chapter Houses

Barbara S. Bromberg, Dinsmore & Shohl Introduction: This article is a follow up to my article in the November 2001 issue of Fraternal Law which described the new IRS guidelines issued in July, 2001, concerning the subject of fraternity foundation...

FREQUENTLY ASKED FOUNDATION FUNDRAISING QUESTIONS

Introduction While there has been a great deal of publicity in the past few years about the types of educational activities and programs that fraternal foundations may fund for their related fraternal organizations and the necessity of grant agreements in...

IRS ADDITIONAL GUIDANCE CONCERNING POPULAR FOUNDATION PROGRAMS

Barbara Schwartz Bromberg, Thompson, Hine & Flory, LLP. Cincinnati, Ohio Introduction Two popular programs sponsored by many fraternal foundations are the maintenance of an "aid to needy members" fund, which is often named after a significant person in the fraternal...

FINAL DISCLOSURE RULES ARE ISSUED

Barbara Schwartz Bromberg INTRODUCTION The Treasury Department recently issued the long-awaited final Treasury Regulations regarding the obligation of all tax-exempt organizations such as fraternal organizations and fraternal foundations (other than private foundations) to provide copies of its exemption application (Form...

AN UPDATE ON ROYALTY TREATMENT FOR AFFINITY ARRANGEMENTS

Barbara Schwartz Bromberg INTRODUCTION Many executives of exempt organizations, including fraternal organizations, who are involved in the negotiation of affinity arrangements, have wrongly assumed that, be cause of the favorable court decisions in the Sierra Club case and similar recent...

REVISITING THE PHI GAMMA DELTA IRS SETTLEMENT - PART I

Barbara S. Bromberg Introduction It has now been over two years since the settlement of the Phi Gamma Delta cases with the Internal Revenue Service was made final, and excerpts from the Closing Agreements in these cases were published ("Excerpts")....

UNRELATED BUSINESS INCOME ISSUES FOR FRATERNAL ORGANIZATIONS

Barbara Schwartz Bromberg INTRODUCTION The Internal Revenue Service has just announced that audits conducted over the past year and a half or so as part of an IRS compliance project aimed at tax exempt social clubs exempt under Code Section...

JUST WHAT ARE FRATERNAL EDUCATIONAL AND CHARITABLE PURPOSES ANYWAY? (Part Two)

Barbara Schwartz Bromberg Introduction This is the second article in a two-part series dealing with the types of programs properly fundable by fraternal foundations and/or a fraternity's set aside funds. Please refer to the prior article appearing in the March,...

JUST WHAT ARE FRATERNAL EDUCATIONAL AND CHARITABLE PURPOSES ANYWAY?

Barbara Schwartz Bromberg Introduction One of the most common fraternal organization client inquiries has always been: "What kind of activity sponsored by the fraternity will the Internal Revenue Service recognize as eligible for charitable foundation funding and/or set aside funding?...

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