Brown & Streza Blog
Author: Casey S. Hale Created: 10/24/2012 8:26 AM
Casey Hale blog
By Casey Hale on 11/13/2012 10:01 AM

The Internal Revenue Service recently announced on its website that it mailed a Group Exemptions questionnaire to 2,000 randomly selected central organizations. The Service explains that the questionnaire will help it gather information to better understand how central organizations relate to and report about their subordinate group organizations. Here is a sample of the letter and questionnaire.

There are a couple of interesting aspects to the questionnaire. First, responding to the questionnaire is voluntary. Organizations that receive a questionnaire aren't required to respond to it. Second, a organization may only respond on-line through the Service's website. There's no other method available for an organization to respond to the questionnaire.

As with other compliance checks performed over the past few years by the Exempt Organizations unit, we'll likely see a report at some point based on the data the Service gathers using the questionnaire. Those reports are always informative and interesting and will provide interesting insights into organizations with a group exemption

By Casey Hale on 11/8/2012 11:03 AM

Interesting article published today in Corporate Counsel about the coming flurry of regulatory activity from the second-term Obama administration - both in terms of new regulations and enforcement - that will impact employers.

The article also discusses how the Department of Labor, which has received much better funding under Obama, will increase its focus on proper employee classification by finally implementing the "right-to-know" rule proposed back in 2010 under the Fair Labor Standards Act ("FLSA"). That rule requires that employers notify workers of their rights under the FLSA and provide certain information regarding hours worked and wage computation. Also, employers will have to perform and document a classification analysis if they wish to classify any worker as an independent contractor.

The take away: Employers "need to be introspective, . . . examine many of their policies and procedures...
By Casey Hale on 11/7/2012 10:54 AM

The Internal Revenue Service announced yesterday that it is expediting review and approval of applications for 501(c)(3) tax-exempt status filed by nonprofit organizations providing relief to the victims of Hurricane Sandy. At the same time, the Service reminded those who want to provide relief to look to existing organizations - including churches - since those organizations can often administer relief programs more efficiently than new organizations as they typically already have fund-raising and distribution infrastructures in place.

By Casey Hale on 11/6/2012 12:08 PM

Both The Huffington Post and ABC News included a story on their websites today about the IRS' suspension of enforcement actions against churches that engage in prohibited political activities.  According the story, the IRS suspended church audit activity back in 2009 and has no plans to resume church audits until the agency goes through a formal rule-making process on the issue.  This is especially interesting given Alliance Defending Freedom's ("ADF") recent promotion of Pulpit Freedom Sunday where...
By Casey Hale on 10/24/2012 8:37 AM


BNA reports (subscription required) that the IRS will not move forward with any church audits for the time being.  Even through the IRS has been bombarded with complaints about churches becoming actively involved in election activities, an IRS representative announced that it has been unable to respond for lack of clear guidance and, therefore, is suspending church audits until the rules regarding church audits are finalized.

By Casey Hale on 10/10/2012 10:13 AM
The IRS recently released new proposed Treasury Regulations designed to ease the burden on private foundations engaged in international grant making. When making a grant to a foreign organization, the current Treasury Regulations require a private foundation to make a determination that the recipient organization is the equivalent of a U.S. 501(c)(3) organization or else exercise expenditure responsibility over the donated funds. To put it simply, every private foundation engaged in international philanthropic efforts must make an equivalency determination or exercise expenditure responsibility. An equivalency determination is an time-intensive and often cost-prohibitive process. But there is a benefit to the process. After making an equivalency determination with regard to a foreign organization, a private foundation can generally make grants to that foreign organization on the same terms as a U.S. 501(c)(3) organization. That means that there are no mandatory periodic grant reports required from the foreign...