To "C" or to "S"… Yes, you gotta choose.

So, as you might have figured out, one of those pesky requirements for forming a business in the United States is that you have to choose how your new enterprise is going to be viewed and taxed by the federal government. That means that if you are a "for-profit" entity (benefit and flexible purpose corporations are still "for-profit") then you are going to get to choose between something known as a "C" Corp or as a Read More

How your 50/50 raffle is like drinking a beer when you were in high school.

Raise your hand if you’ve attended a nonprofit event or fundraiser where a “50/50 raffle” – where the winning raffle ticket was worth 50% of the money raised - was one of the primary means for fundraising. I’d be rather surprised if you didn’t raise your hand. Problem is… those 50/50 raffles are illegal in California, just like that illicit beer you might have had at that party back when you were in high school. Read More

We’re Moving Our Offices August 1st!

The For Purpose Law Group, a law firm specializing in the representation of nonprofit, tax-exempt organizations and socially conscious businesses throughout Southern California, is pleased to announce the relocation of our offices to downtown San Diego on August 1st, 2013. Our new offices are located in the unique and historic Schiefer & Sons building, at 815 J Street, Suite 303, San Diego, CA 92101 - Read More

Flexible Purpose Corporations

What are Flexible Purpose Corporations? A Flexible Purpose Corporation (Flex C) is one of two new corporate structures that became available in California beginning January 1, 2012. The other corporate form that became available in 2012 was the Benefit Corporation. Flexible Purpose Corporations, like Benefit Corporations, recognize the value of social responsibility and socially conscious business decisions. As a Read More

Automatic Revocation of Exempt Status

The requirements to maintain an organization’s tax exempt status are actually relatively straight forward. The organization must keep accurate financial records, file an annual information tax return and pay any applicable taxes from “unrelated business income,” and avoid engaging in prohibited activities. Making sure that your organization filed the appropriate annual return every year is an absolute necessity Read More

Requirements for Maintaining your Tax-Exempt Status

After receiving your tax-exempt status from the IRS and the state of California, many nonprofits breathe a sigh of relief and assume that their tax exempt status is secured indefinitely. In fact, preserving on organizations’ tax exempt status requires the organization to undertake certain actions and refrain from engaging in other actions. Specifically, to maintain tax exempt status an organization must: Keep Read More

Tax Exemption under IRC 501(c)

The Difference Between 501(c)(3), 501(c)(4) & 501(c)(7) Selecting the proper tax structure for your organization will have a significant impact on the activities you can undertake, how the organization is operated and what transactions are considered tax exempt for the organization and tax deductible for your donors. Section 501(c) of the Internal Revenue Code lays out specific organizational definitions and Read More

IRS Admits Targeting Conservative Orgs

The Internal Revenue Service is supposed to act in a completely nonpartisan manner when examining exempt organizations, but now they're in quite a bit of hot water for inappropriately flagging conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status. Organizations with specific terms on their exemption applications including "patriot" and Read More