Posted In: Business Restructuring, Bankruptcy & Commercial Law & Business Transactions & Corporate Counseling
Business Blog: Make Sure Your Non-Profit Charity is Compliant When Looking to Support Ukraine and Other Causes
By Brian D. Merklin on April 6, 2022
Since the beginning of Russia’s invasion of Ukraine, many Americans have been interested in contributing money or supplies to the humanitarian efforts underway. Some may even consider starting up their own non-profit charitable organizations for such purposes. While this may be a noble cause, it is extremely important to ensure that your non-profit charity complies with all laws and regulations at both the Federal and State level, including tax-exempt status. At the Federal level it is important to ensure that you not only properly apply for, and receive tax-exempt status, but that your non-profit charity maintains this status as well. It is imperative that you ensure your nonprofit charity follows the IRS rules regarding the nonprofit’s activities closely. Failure to follow the rules and guidelines set forth by the IRS may result in the loss of 501(c)(3) or tax-exempt status and can cause several tax issues for both the charity and its directors.
Additionally, most states require charitable organizations to register with both the secretary of state as a foreign, or domestic corporation, and with the applicable state agency overseeing charitable organizations. In Ohio this requires registration and annual reporting with the Ohio Attorney General’s office. Failure to either register or report annually with the applicable state agency can result in severe tax consequences. Consequently, it is critical that organizers of these types of establishments ensure they are properly registered with the applicable state agency and that they continue to file annual reports.
While contributing to humanitarian efforts or other charitable causes are important parts of a well-functioning society, it is even more important to ensure such activities are in accordance with the law to avoid negative tax consequences and protect the future of the charity Before starting a charitable organization for these, or any other important purpose, we recommend that you speak to an attorney to ensure that these rules and regulations are followed and all other requirements under the law are met.
This blog is intended to provide information generally and to identify general legal requirements. It is not intended as a form of, or as a substitute for legal advice. Such advice should always come from in-house or retained counsel. Moreover, if this Blog in any way seems to contradict advice of counsel, counsel's opinion should control over anything written herein. No attorney client relationship is created or implied by this Blog. © 2024 Brouse McDowell. All rights reserved.