Picture this: your nonprofit has been diligently working towards its mission, making a positive impact in your community, and enjoying the benefits of tax exempt status under Section 501(c)(3) of the Internal Revenue Code. But one day you receive a letter from the IRS telling you that your organization’s 501(c)(3) status has been revoked. What do you do next? Join us. In this episode of the PBPA Podcast, Robyn Miller will guide us through the steps a nonprofit needs to take if it’s tax exempt status is revoked.
Many tax-exempt nonprofit organizations that provide health insurance coverage to their employees can qualify for a special IRS tax credit. The maximum credit is 35% of premiums paid by eligible tax-exempt employers.
To be eligible, tax-exempt employers must have fewer than 25 full-time employees, whose average annual wages are less than $61,400 (as of 2023)*, and must pay at least half the cost of health insurance coverage for their employees. Employers must purchase insurance through the Small Business Health Options Program (SHOP) Marketplace to be eligible for the credit.
Tax-exempt organizations that are eligible for the tax credit will receive it as a refund of payroll taxes paid. To claim this credit, tax-exempt employers must file IRS Form 990-T (even if they don’t ordinarily do so) with an attached Form 8941 showing the calculation of the claimed credit. The tax credit can be claimed for only two consecutive years. For further details, please visit the IRS’ Small Business Health Care Tax Credit website.
* This number is adjusted by the IRS annually.
What happens when a member of your organization receives an honorarium? Should the payment go to the individual or to the nonprofit? Well, it depends. In this episode of the PBPA Podcast, Kathryn Hecker and Felix Swierski with Arnall Golden Gregory will explore these questions and provide guidance on receiving or paying honoraria. While an honorarium serves as recognition to an individual for their time, expertise, and contributions, it is important to be aware of the legal and tax implications that come with making or receiving honorarium payments.
As a 501(c)(3), there is a limit on the amount of lobbying your organization can do and an absolute prohibition on any political campaign activity. This webcast will answer the following questions:
- What is the difference between lobbying, advocacy and political activity?
- What amount of lobbying is acceptable?
- How can your organization do advocacy work without getting into trouble with the IRS?
Speaker: Douglas Chalmers, Managing Member, Chalmers, Adams, Backer & Kaufman, LLC
For more information about grassroots advocacy and lobbying, please see this article: Lobbying vs. Advocacy.
Keep your corporate registration in good standing by renewing it annually. Georgia nonprofits must renew their registration with the Office of Secretary of State every year, between January 1 – April 1. You must renew during this window regardless of when you filed your initial registration (for example, if you registered with the Secretary of State on August 9, your renewal is not based on your registration anniversary – it is due between January 1 – April 1). You can renew your annual registration online with the Georgia Corporation Division. Read this article to learn more about annual nonprofit filings and renewals.Your-Nonprofits-Checklist-for-Annual-Filings-and-Renewals
So, you’re thinking of starting your own nonprofit organization. It’s certainly an admirable endeavor; however, the road to receive and maintain 501(c)(3) status can be long and somewhat complicated. In this webinar, our speakers will review:
- options for how a nonprofit visionary can address their mission, while avoiding the complexities of creating and sustaining a (c)(3) organization; and
- practical considerations and legal requirements to create a new 501(c)(3) tax-exempt entity.
Speaker: Cara Mitchell, Associate General Counsel, Children’s Healthcare of Atlanta and Felix Swierski, Associate, Arnall Golden Gregory
Despite being exempt from federal income tax in most cases, 501(c)(3) organizations still have to pay many taxes. For example, tax-exempt nonprofits may find themselves paying personal property taxes in Georgia on items like machinery and computers under certain circumstances. This article by Becky Gula and Vianca Orina with DLA Piper discusses how personal property is taxed in Georgia, what exemptions are available to nonprofits, and what nonprofits can do to avoid a property tax surprise.Personal-Property-Taxation-for-Georgia-Nonprofits
A local business approaches your nonprofit with a simple plan – for every customer your nonprofit sends its way, it will donate either a percentage of its profits or give you a flat referral fee. It seems like a win-win situation. Your nonprofit gets funding to support its mission, and the business gets a new customer. The catch is that this approach might get your nonprofit in hot water with the IRS. Read this article for guidance on how to work with local businesses, without risking your tax-exempt status.Referral-and-Finders-Fees38
501(c)(3)s have rules and restrictions around political activity, lobbying and advocacy. With that in mind, how can a nonprofit get involved in next month’s election or be more active in the future? In this episode of the PBPA Podcast, Robyn Miller, Senior Corporate & Tax Counsel with PBPA, speaks with us about the difference between political activity, lobbying and civic engagement. Join us as she answers our questions about how 501(c)(3)s can participate in “Get-Out-the-Vote” initiatives.
Additional resources referenced during our conversation:
501(c)(3)s are prohibited from engaging in political activity, but what about the leaders of the organization? What happens when a board member runs for political office? Or a nonprofit ED is invited to speak at a political rally for a personal friend? Individuals running a nonprofit have their own personal views and political activity, but sometimes the line between personal and professional gets blurry. This article includes several examples and outlines specific precautions an organization should take to protect its tax-exempt status as board members or employees engage in personal political activity.Political-Activities-of-Nonprofits-Employees-Directors
Nonprofit organizations often collaborate with other nonprofits in order to maximize their impact. If your 501(c)(3) nonprofit works in partnership with other nonprofits, you may end up working alongside a 501(c)(4) organization. Whether your nonprofit works with a (c)(4) as part of an established coalition or on an ad hoc basis, it is important to understand the limits the Internal Revenue Service places on these types of shared activities. This article provides some important tips to ensure that your nonprofit doesn’t jeopardize its tax-exempt status.Working with C4 Organizations
“I Want To See Your 990!” How should a nonprofit respond when an individual demands copies of its filings? 501(c)(3) nonprofit organizations are legally required to disclose certain information. This article outlines what information 501(c)(3)s must make publicly available, recommendations for handling requests for information, and potential penalties if a nonprofit does not respond to a request for information.What Are the Public Disclosure Requirements for a 501(c)(3)
Start the year off right by submitting IRS filings, completing local renewals and sending out donor acknowledgements on time. This Article includes a checklist of common items that most Georgia nonprofits should have on their legal maintenance “to do” list for January, including W-2s, donor acknowledgements, and Georgia Secretary of State corporate renewals.Checklist-for-Annual-Filings-and-Renewals-2023-1
You may be familiar with the fact that even tax-exempt organizations have to pay tax on income from an activity that is regularly carried on if it is not substantially related to the organization’s exempt purpose. This is known as “unrelated business income tax” or UBIT. Under the 2017 Tax Cuts and Jobs Act (“TCJA”), tax-exempt organizations have to calculate UBIT differently than before. With clear examples and hypotheticals, this article very generally explains the changes under the TCJA, and how they might be relevant to your organization.New Rules for UBIT_What You Need to Know About Siloing
Georgia has indefinitely extended sales and use tax exemptions for nonprofit volunteer health clinics, nonprofit health centers and qualified food banks. Read this article to learn more about applying for sales and use tax exemption letters of authorization.Sales Tax Exemptions Extended Indefinitely for Certain Nonprofits
In Georgia, most §501(c)(3) tax-exempt organizations ARE NOT exempt from paying sales and use tax in Georgia. The Georgia Department of Revenue (GA DOR) realized that many tax-exempt organizations are not aware of their sales tax obligations especially regarding their fundraising activities. So, on July 2, 2020, the GA DOR issued a comprehensive bulletin on how and when sales and use tax applies to nonprofit fundraising activities. The bulletin explains 13 different fundraising scenarios and their sales tax implications. For instance, does your nonprofit have to collect sales tax on the sale of an auction item donated to your organization? What if you host a road race and charge an admission fee to raise funds? Should sale tax be charged on golf tournament entry fees or mulligans? Those and many more questions are answered in this bulletin.
Does your nonprofit make online sales to customers in other states? Until recently, states were not able to require out-of-state retailers to collect and remit sales tax solely for online sales. This article reviews recent changes in the law that permit states, within certain limits, to require out-of-state retailers to collect and remit sales tax for online sales.Sales Tax Obligations of Online Retailers
A candidate forum is an event where candidates running for elected office are invited to discuss their views and positions. Hosting a candidate forum can provide §501(c)(3) organizations with a meaningful and informative way to engage with voters and political candidates. As with all election-related activity, organizations must remain unbiased and nonpartisan. This article is intended to help guide §501(c)(3) organizations through hosting a successful candidate forum without risking its §501(c)(3) tax-exempt status. This article does not address Federal or State Election laws.
Public forums are an acceptable form of civic participation and a way for §501(c)(3) organizations to educate the public about candidates running for office. However, when hosting this type of event, a §501(c)(3) organization cannot engage in biased questioning or procedures. Where §501(c)(3) organizations act with political bias, they are engaging in prohibited “partisan” activity which can result in loss of tax-exemption or taxes paid by the organization and its managers. Thus, §501(c)(3) organizations must behave in a strictly “nonpartisan” way and cannot support or oppose any candidate for elected office.
In 1986, the IRS provided guidance on hosting candidate forums.A §501(c)(3) organization is allowed to host a candidate forum if:
- The goal of the event is to educate and inform voters.
- The event treats all candidates fairly and equally.
- The event does not promote or advocate one candidate over another.
When hosting a forum, a §501(c)(3) organization must invite all legally qualified candidates to speak. Even if all the candidates do not attend, they all must be invited. It is important to retain evidence that all candidates were invited and their responses. The forum date and time should not conflict with an already well-published major event for one or more of the candidates.
Further, questions asked to candidates should be prepared and presented by a nonpartisan, independent panel of experts, and an unbiased, neutral moderator must be present and enforce the rules of forum. Further, the questions asked of candidates should cover a broad range of issues. These issues may include ones of particular importance to the §501(c)(3) organization host but should not be limited to those.
Both the format and content of the forum must be neutral. Each candidate should be given equal time and an equal opportunity to talk about the candidate’s views on each issue. The moderator and independent panel of experts should not comment on the questions or otherwise approve or disapprove of a candidate or the candidate’s answers. The moderator should also start and end the event by saying that the candidates’ views are their own, and that the §501(c)(3) organization is not endorsing or supporting any candidate by hosting the forum.
Put simply, a §501(c)(3) organization planning to host a candidate forum should remember to treat all candidates in a fair, equal, and balanced way. Also, the organization should document every step of its forum planning process. For example, the organization should save any emails with candidates and have a record that all legally qualified candidates were invited to the event. If your organization has any questions about hosting a candidate forum, you should contact your attorney to discuss the details and rules prior to engaging in the forum.
The United States political system relies on the involvement and participation of its citizens in the election process. Historically, many groups have faced barriers to full participation in this system. §501(c)(3) organizations often wish to host and promote voter registration drives to increase voter participation in the communities and populations that they serve. It is important that §501(c)(3) organizations follow specific guidelines and rules to remain neutral in any election-related activity.
Under the Internal Revenue Code, §501(c)(3) organizations are absolutely prohibited from supporting or opposing any candidate for public office(1). Examples of prohibited activities include endorsing candidates, opposing candidates, promoting or opposing political parties, making contributions to candidates’ campaigns, or engaging in any biased or “partisan” election-related activities. Bias is the main concern, and organizations must maintain a strict “nonpartisan” stance. If a §501(c)(3) organization does not comply with this rule, the IRS may revoke its §501(c)(3) tax-exempt status, and/or impose taxes on both the organization and its managers.
This article provides an overview of how §501(c)(3) organizations can effectively and safely conduct voter registration drives in the state of Georgia. All employees and volunteers must understand the laws, limits and rules before participating in a voter registration drive. It is also essential for §501(c)(3) organizations to review Georgia’s Voter Registration Rules and Procedures. This document must be printed and reviewed prior to the date of your voter registration drive. Included in the document are certain notices that must be given to applicants, required checklists, and transmission forms.
Organizations wishing to sponsor a voter registration drive may also participate in optional training by their County Board of Registrars’ Office. To request training, submit a Voter Registration Drive Training Request, which can also be found in the above-linked materials.
Generally, the deadline to register to vote is 28 days prior to the next election. All completed applications must be transmitted to the Secretary of State’s Office before midnight on the close of the registration period. In the event that this date falls on a Saturday, Sunday, or legal holiday, then the deadline to register to vote is the next succeeding business day. The Georgia Secretary of State’s website lists Key Election Dates for each specific year.
Who May Register to Vote? All qualified applicants who want to register must be allowed to register. The only reason a §501(c)(3) organization may refuse to give someone an application is if the person does not meet the qualifications and is therefore not an eligible voter.
The qualifications to register to vote are:
A. Applicant is a citizen of Georgia and of the United States;
B. Applicant resides at the address shown on the voter registration application;
C. Applicant is at least 17 and ½ years of age;
D. Applicant has either never been convicted of a felony involving moral turpitude or has completed the sentence for the felony; and
E. Applicant has either never been judicially determined to be mentally incompetent or has had the disability removed.
When conducting a voter registration drive, let applicants know that they are not officially registered until the State records their application. Encourage everyone to check their registration status and polling place online before election day. If a person says s/he is already registered, still encourage the person to check his or her registration status online. Also, ask if the person has moved recently and make sure that the person is registered at his or her current address. And importantly, make sure that all applicants know about their right to cast a provisional ballot in case there is some complication with their registration. The Georgia My Voter Page is the online portal available to verify this information.
When planning a voter registration drive, consider your organization’s target audience and choose location(s), date(s), and time(s) that would best reach this audience. An organization may choose the location to hold its drive by targeting low-income, minority, low-turnout, homeless or student populations. An organization may not target a particular group because they tend to belong to a political party or voted for a certain candidate previously. For example, a §501(c)(3) organization might conduct tabling efforts in the lobby of its office or location, at an event sponsored by the organization, or the §501(c)(3) organization might integrate voter registration into its existing service and outreach efforts. And always remember, the voter registration drive cannot be influenced by, affiliated with, or support any political candidate or party.
What identification is required?
To register, a person must have a valid identification document. A copy of the ID must also be submitted either with the application or prior to or at the time of voting. Make sure to tell applicants about these ID requirements so that they are prepared on election day.
The most common form of ID is a valid government-issued ID card, which includes a FREE Voter ID card or Driver’s License (even if expired). Other acceptable forms of ID include a bank statement, a paycheck, a government check, or any other government document that shows the applicant’s name and address. The Georgia Secretary of State’s website explains Identification Requirements in greater detail.
An organization must take care to keep all completed applications secure and confidential at all times. Applications should always be kept sealed. The State will not accept unsealed applications without a signed acknowledgment from the applicant.
All applications must be filled out by the applicant, with limited exceptions for individuals who are illiterate or disabled. In such a case, the volunteer assisting the applicant must sign his or her name in the appropriate section of the application. No one from the organization can improperly assist applicants in filling out the application.
Organizations must submit completed applications on time in order for them to count! Generally, all completed applications must be transmitted to the Secretary of State within ten (10) days of being filled out or by the close of the registration period, whichever is sooner. If a voter registration drive is held close to the end of the registration period, there is a shorter transmission period, though. If the application is completed within fourteen (14) days of the end of the registration period, then the application must be transmitted within seventy-two (72) hours of completion or by midnight on the close of the registration period, whichever is sooner. Also, let each applicant know that the applicant can submit his or her application on his or her own if the applicant does not want the organization to submit it for him or her.
Just as important as submitting the applications on time is submitting applications to the correct office. State and federal registration applications can be mailed to the Georgia Secretary of State. The address for the Elections Division of the Georgia Secretary of State is:
Elections Division, Office of the Secretary of State
2 Martin Luther King, Jr. Drive SE
Suite 802 Floyd West Tower
Atlanta, Georgia 30334-1505
When submitting applications, be sure to include a Transmittal Summary Form, which can also be found in the state materials linked to this article above.
Volunteer and Employee Conduct. Even the best-intentioned §501(c)(3) organization is only as good as the volunteers and employees it relies on. Improper actions by volunteers or employees can lead to serious consequences for the §501(c)(3) organization. Keep the following guidelines in mind when conducting a voter registration drive.
- Do not assist someone in filling out a registration application, unless the applicant is illiterate or disabled. If someone requires assistance, the volunteer or employee assisting the person must sign the application in the appropriate section.
- Do not refuse to accept or submit a registration application from a qualified individual.
- Do not represent or imply that you or the organization is a representative of the Georgia Secretary of State or Board of Registrars.
- Do not make any statement or action that would discourage someone from registering.
- Do not be inebriated or impaired by drugs or alcohol while conducting voter registration or hold your voter registration drive in a place where alcohol is served or where you know that illegal or criminal activities occur.
- Do not give any rewards or gifts to people who register. In Georgia, it is a felony to give or receive any gift for registering a voter. You can, however, hand out small giveaways like food, candy, stickers, or balloons to the general public. If you do, be clear that any giveaways are available to anyone who asks for them—not just voters or persons who register to vote.
- that are generally associated with a particular candidate or party.
- Do not register an ineligible voter, register a voter under anyone else’s name, or knowingly give false information when registering a voter. In Georgia, this is a felony.
If someone asks a volunteer or employee: (a) who the volunteer or employee supports for elected office or a specific political party, or (b) which candidate or political party the person should vote for or support, the volunteer or employee MUST NOT ANSWER. Instead, the volunteer or employee should remind the person that as a staff member/volunteer of a §501(c)(3) organization, the volunteer or employee must remain nonpartisan. Perhaps recommend that the person talk to a trusted friend or family member. A §501(c)(3) organization volunteer or employee is only permitted to discuss simple facts, like what party a candidate is in, if a candidate is an incumbent or challenger, or where a candidate lives. A volunteer or employee should only discuss these very basic facts and avoid further explanation. For example, a volunteer or employee should not explain the differences between Republicans and Democrats.
While guidelines surrounding election-related activities can seem daunting, if a §501(c)(3) organization remembers to remain unbiased and impartial, it can largely avoid stress or worry. When deciding where and how to conduct a voter registration drive, the organization should be sure to document every decision made at the time when it is made. For example, make records of why the organization is targeting a specific population or area, as well as any other major decision in the process. §501(c)(3) organizations that are considering holding a voter registration drive should contact their attorney for specific legal guidance before doing so.
1 The restrictions regarding political activity are different for §501(c)(4) and §527 corporations. This article focuses solely on legal implications governing political activity by §501(c)(3) organizations.
The U.S. political system relies on the involvement and participation of its citizens in the election process. Certain groups—such as the elderly, disabled, and poor who may lack transportation face particular challenges to participating in this process. Get-Out-the-Vote (“GOTV”) initiatives aim to increase voter participation by reminding voters of the date and location of their polling place and/or providing transportation to the polls on election day. §501(c)(3) organizations are allowed to engage in these sorts of activities. However, as with all election-related activities, §501(c)(3) organizations must act in a strictly unbiased and nonpartisan manner to maintain their §501(c)(3) status.
Under the Internal Revenue Code, §501(c)(3) organizations are absolutely prohibited from supporting or opposing any candidate for public office. Examples of prohibited activities include endorsing candidates, opposing candidates, promoting or opposing political parties, making contributions to candidates’ campaigns, and engaging in any biased or “partisan” election-related activities. Bias is the main concern, and organizations must maintain a strict “nonpartisan” stance. If a §501(c)(3) organization does not comply with this rule, the IRS may revoke its §501(c)(3) tax-exempt status and/or impose taxes on both the organization and its managers.
This article provides an overview of how §501(c)(3) organizations can conduct GOTV initiatives in Georgia. All §501(c)(3) organization employees and volunteers must understand the laws, limits and rules before participating in any GOTV initiative.
What can a §501(c)(3) do generally?
- Remind individuals when the election is scheduled.
- Provide information about where an individual’s polling place is located.
- Provide sample ballots or other nonpartisan voter guides.
- Offer transportation to and from polling places.
What must a §501(c)(3) organization avoid?
- Attempting to promote or oppose a particular candidate or political party.
- Only providing services, such as a reminder of the election date or transportation, to voters who support a particular candidate, party or issue.
- Making biased statements or distributing biased materials.
Conducting a GOTV Initiative.
First, the §501(c)(3) organization should think about its target audience when choosing locations to focus its organization’s efforts. Will the organization be serving whole neighborhoods or concentrating specifically on the organization’s members or clients? When making such a determination, a §501(c)(3) organization may target low-income, minority, low-turnout, homeless, or elderly populations. The organization may not target a group because the group tends to belong to a political party or voted for a certain candidate in the past.
For example, a §501(c)(3) organization may target a neighborhood because its residents tend to be older, and thus, are more likely to need transportation services on election day. An organization may not target that area because its residents tend to vote more liberal or conservative. If a §501(c)(3) organization chooses to canvass a neighborhood, its volunteers or employees should go to every house. Do not avoid a house because it has a political sign out front for a candidate whose values do not align with the organization’s values.
In addition to providing transportation, encourage voters to check their registration status and polling place online before election day. Also, ask them if they have moved recently and make sure they are registered at their current address. Finally, make sure that all voters know of their right to cast a provisional ballot in case of a problem with their registration.
On election day, do not refuse transportation based on a person’s actual or perceived voting preferences. Volunteers should avoid any behavior that would discourage someone from voting. Remember, in conducting GOTV initiatives, the goal is to increase voter participation, not help a particular candidate.
Volunteers should also not discuss political parties or candidates. Even certain “wedge” issues—such as abortion rights—should be avoided, since the issue often implicitly advocates for one candidate or political party. Organizations may not give rewards or gifts to people to encourage or reward them for voting (in Georgia, this is a felony). While unlikely to be prosecuted, a volunteer or organization could even face liability for promising to take voters to eat on their way home from a polling place, so take great care not to reward people for voting in any way.
If someone asks a volunteer or employee: (a) who the volunteer or employee supports for elected office or a specific political party, or (b) which candidate or political party the person should vote for or support, the volunteer or employee MUST NOT ANSWER. Instead, the volunteer or employee should remind the person that as a volunteer/employee of a §501(c)(3) organization, the volunteer or employee must remain nonpartisan. Perhaps recommend that the person talk to a trusted friend or family member. A §501(c)(3) organization volunteer or employee is only permitted to discuss simple facts, like what party a candidate is in, if a candidate is an incumbent or challenger, or where a candidate lives. A volunteer or employee should only discuss these very basic facts and avoid further explanation. For example, a volunteer or employee should not explain the differences between Republicans and Democrats.
Perhaps, as a matter of best practice, the §501(c)(3) organization should have a policy that employees and volunteers are not allowed to engage in any discussion related to elections beyond the date, time, location of polling, and what measures or issues are on the ballot. When running GOTV initiatives, focus on the importance of voting, encouraging active citizenship, and giving a voice to the communities the organization serves. If volunteers drive voters in their own cars, make sure their vehicles do not have political campaign messages or information in or on them, such as a candidate’s campaign bumper sticker.
Finally, when undertaking GOTV initiatives that involve transportation, protect the organization by requiring volunteers and voters to sign releases of liability. Also make sure that all drivers are properly qualified and insured. And, make sure to document every decision the organization makes contemporaneously to when it is made. For example, if the organization will target a specific neighborhood, it should record why it is doing so and how it came to that decision.
If your organization has any questions about GOTV initiates, or is planning to sponsor an event, you should discuss further details and rules with your attorney prior to the event.
Nonprofit §501(c)(3) organizations are permitted to engage in some lobbying activities, just not a substantial amount. Nonprofits that do engage in lobbying, like their for-profit peers, have significant obligations to register and report their lobbying activities in the State of Georgia. Rules vary depending on the level of state government or type of government entity the nonprofit is seeking to influence.LobbyinginGeorgia_Nov_2019
501(c)(3)s are prohibited from engaging in political activity. Doing so can result in loss of tax-exemption. As the 2020 election year gets underway, it is important to understand what constitutes political activity and what doesn’t.
Does your nonprofit own real estate in Georgia? Are you paying your property taxes annually? Yes, even though your organization has a tax-exemption from the IRS, that does not mean it is exempt from paying property taxes in Georgia. All real property in Georgia in taxable, UNLESS it is specifically exempted. That means unless your nonprofit specifically applied for and was granted an exemption from property taxes for each parcel of real property it owns, then your organization owes property taxes.
Fall is property tax season
Up to now only section 501(c)(3) public charities with assets totally $10 million or more and those filing Form 990-N were required to file electronic Form 990s. With the Taxpayer First Act, all 501(c)(3) public charities will be required to file their Form 990, Form 990EZ or Form 990N electronically. This requirement will be phased in over the next couple of years.Article - Mandatory Electronic Filing of Form 990s