How a 501(c)(3) Attorney Can Help with IRS Compliance

As you manage your nonprofit organization, understanding the significance of 501(c)(3) tax-exempt status is vital. A 501(c)(3) designation exempts the profits of your nonprofit organization from federal income tax and also opens doors to funding opportunities and enhances your credibility in the community.

Maintaining IRS compliance preserves your tax-exempt status and ensures the longevity of your nonprofit foundation’s mission. The IRS imposes stringent regulations on charities that require legal audits and meticulous adherence to reporting, governance, and operational standards.

At Chisholm Law Firm, we guide nonprofits through the intricate landscape of the law and IRS regulations. Our role extends beyond legal counsel on tax law and matters; we’re here to serve and empower your organization with the knowledge and tools needed to thrive in the world of the nonprofit sector.

Let’s delve into the invaluable and comprehensive legal services, support, and practical solutions that a 501(c)(3) attorney can provide nonprofit organizations like yours, offering insights and strategies to safeguard your nonprofit’s compliance with IRS requirements.

Common IRS Compliance Challenges for Nonprofits

Navigating IRS compliance can be a daunting task for your nonprofit as you strive to maintain your tax-exempt status and uphold transparency in your public charity. Here are some of the most common challenges nonprofit organizations face in meeting these stringent tax laws and requirements.

Failing to File Required Forms and Reports On Time

Nonprofits and public charities, depending on their size and gross receipts, are required to file various Form 990 Series returns with the IRS annually. These forms detail the organization’s financial activities, legal services, and governance, ensuring transparency to the public and the IRS. Missing deadlines can result in penalties and audits for your nonprofit, highlighting the importance of timely submission.

Engaging in Prohibited Activities

501(c)(3) organizations must operate primarily for charitable purposes. Prohibited activities include excessive lobbying for political candidates, providing private benefits to individuals, or participating substantially in commercial businesses unrelated to your mission.

Engaging in these activities can lead to revocation of your nonprofit’s tax-exempt status and potential tax liabilities, highlighting the need for careful adherence to IRS guidelines.

Improper Recordkeeping or Financial Mismanagement

Your nonprofit needs to maintain accurate and complete financial records to support your tax filings and demonstrate responsible use of funds. Poor recordkeeping practices like missing receipts, inadequate documentation of expenses, or commingling personal and other donations with your organizational funds can raise red flags for the IRS and trigger audits. 

Proper financial management is essential for maintaining compliance with fundraising laws and avoiding scrutiny for tax-exempt organizations like yours.

Public Disclosure Issues

Your nonprofit must comply with specific public disclosure requirements regarding fundraising activities, board member compensation, the board itself, and certain financial information. Failing to disclose this information properly can damage public trust, lead to fines, and potentially jeopardize your nonprofit’s tax-exempt status. You need to maintain clear and accurate public disclosures for your organization to maintain transparency and credibility.

Navigating these challenges requires proactive measures and adherence to IRS regulations and procedures. Seeking guidance from a knowledgeable 501(c)(3) attorney can help your nonprofit establish robust compliance practices, mitigate risks, and ensure long-term sustainability.

Contact Chisholm Law today for qualified assistance tailored to your nonprofit’s specific needs and challenges.

How a 501(c)(3) Attorney Can Help Nonprofit Organizations

Skilled 501(c)(3) legal professionals with a proven track record in this sector play a pivotal role in nonprofit law firm management. Nonprofit lawyers can handle everything from foundation name formation and application to ongoing compliance and IRS interactions.

Here’s how a 501(c)(3) attorney can assist you:

Formation and Application Process

A 501(c)(3) attorney can provide legal support and guidance on establishing a compliant nonprofit structure that strategically adheres to IRS regulations. Attorneys with experience in these practice areas also can assist with completing the application for 501(c)(3) status. They can streamline the application process to ensure all necessary documentation is accurate and comprehensive.

Ongoing Compliance

Ensuring your nonprofit remains compliant with legal regulations is critical to your success and longevity. An attorney can assist with:

• Filing Annual Taxes: We can keep you informed about filing obligations, including annual tax forms (such as 990 and 990-T), to maintain your tax-exempt status and have an accountant on staff to handle these filings for you.
• Protecting Intellectual Property: Nonprofit attorneys help file federal trademark applications to ensure you own the name, logo, slogan, and names of signature programs of your nonprofit organization.
• Ensure Activities Align with Exempt Purpose: Our attorneys offer guidance to ensure your organization’s activities support your tax-exempt purpose.
• Fundraising Registration: We assist in filing for charitable solicitation licenses as you expand your fundraising efforts nationwide.

At Chisholm Law, we’re a law firm dedicated to empowering nonprofits with the full legal services, knowledge, and support needed to help nonprofit organizations navigate regulatory challenges successfully. Contact us today to discuss how we can assist your nonprofit organization in achieving its mission effectively and compliantly.

Benefits of Working with a 501(c)(3) Attorney

Choosing a skilled 501(c)(3) attorney brings numerous legal advantages to your nonprofit organization:

• Peace of Mind: Rest assured knowing your organization or business operates in full compliance with intricate IRS regulations, safeguarding its tax-exempt status and reputation.
• Proactive Risk Management: Take a proactive stance against potential audits, legal issues, or risks that could jeopardize your tax-exempt status, minimizing legal liabilities.
• Experienced Guidance: Benefit from the legal services of professionals with tailored knowledge and insights into complex tax and legal issues unique to nonprofits, charities, and private foundations, ensuring informed decision-making and strategic planning.
• Focus on Your Mission: By entrusting legal complexities to a 501(c)(3) attorney, your organization or board can redirect valuable time and resources toward advancing your core mission and serving your clients and community effectively.

At Chisholm Law, we’re committed to empowering nonprofits with the support, services, and experience needed for your nonprofit to thrive in a world of challenging regulatory, legal, business, and social changes. Contact us today to explore how we can support your organization’s success.

Contact Chisholm Law Today

Ensuring your nonprofit remains IRS compliant isn’t just about avoiding penalties; it’s about maintaining trust and transparency with your stakeholders. A 501(c)(3) attorney is invaluable here, offering guidance to make clients navigate IRS regulations effectively. 

At Chisholm Law, we’re committed to empowering nonprofits like yours with tailored legal services and guidance. Our attorneys help clients establish robust governance practices, and meet reporting requirements consistently. Whether you’re a nonprofit starting out or looking to strengthen your compliance framework, our team is here to support you. 

Contact us today for a free consultation and learn how we can help your nonprofit thrive with confidence and compliance.aw today for a free consultation. Let our team help you achieve your organizational goals and make a big impact in your community with the right legal support.

*Past results do not determine future outcomes