Pursuant to IRS Rev. Proc. 2020-8, as of January 31, 2020, a Form 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code—which is used to apply for recognition of tax exemption as an entity described in § 501(c)(3)—may only be submitted electronically through Pay.gov, along with the required $600 user fee. According to the IRS, the change is intended to reduce errors, provide a more efficient application process,…

Click here to read our Client Advisory regarding the recent change to the excise tax on investment income of private foundations.…

On January 14, 2020, the New York Attorney General entered into an Assurance of Discontinuance (the “Settlement”) with PayPal Charitable Giving Fund (“PPGF”)—PayPal, Inc.’s charitable giving arm—to resolve issues raised during an investigation into PPGF’s 2016 giving campaign. The Settlement highlights the importance of adequate disclosure and vetting for third-party fundraising platforms that solicit charitable funds online. PPGF is a 501(c)(3) nonprofit corporation that does business throughout the United States. It functions as a third-party…

New York’s “Stop Hacks and Improve Electronic Data Security Act (SHIELD Act)” (the “Act”) officially took effect on October 23, 2019. In pertinent part, the Act amends New York General Business Law (“GBS”) § 899 to expand the scope of “private information” covered under existing data breach notification provisions, to more broadly define what constitutes a “breach” of data security, and to add new data security requirements. The Act applies to all businesses that collect…

A federal judge has invalidated a New York state Ethics Law requiring § 501(c)(3) and § 501(c)(4) tax-exempt organizations to publicly report their donors under certain circumstances. Background. Organizations exempt from taxation under Internal Revenue Code (“IRC”) § 501(c)(3) (charitable organizations) are expressly prohibited from participating in any political campaign activity for or against a candidate for public office. Such organizations are permitted to engage in lobbying, but lobbying activity may not constitute a “substantial…

Effective March 2019, § 174-b of the New York Executive Law was amended to add a new requirement that any solicitation by or on behalf of a charitable organization—including any solicitation by a professional fundraiser or professional solicitor—must include a statement of the New York Attorney General’s website address (www.charitiesnys.com) and telephone number ((212) 416-8686) where an individual can receive more information about the charity. In August 2019, the Attorney General released guidance on the…

In what may be a bellwether for future challenges to existing U.S. Treasury Regulations, on August 6, 2019 the United States District Court for the District of Minnesota in Mayo Clinic v. United States invalidated Treasury Regulation § 1.170A-9(c) on the grounds that the Treasury Department exceeded the bounds of its statutory authority when it was promulgated. Background Mayo Foundation is an tax-exempt § 501(c)(3) organization that is the parent of several hospitals, clinics, and…