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Tax-Exempt Organizations

ArentFox Schiff provides comprehensive counsel and custom-tailored solutions to meet these particular needs of our tax-exempt organization clients.

Tax-exempt organizations serve a distinct role in society and are afforded a special standing under the federal and state tax laws. As a result of this exceptional status, tax-exempt organizations are subject to a unique and complex regulatory regime beyond (and in addition to) the laws that apply to many other organizations.

We work with a wide array of tax-exempt organizations—family and corporate foundations, private operating foundations, health care organizations, colleges and universities, medical and scientific research organizations, cultural and humanitarian organizations, housing and neighborhood redevelopment organizations, and other public charities and private foundations, as well as social welfare organizations, business leagues, and trade associations. We create targeted solutions that address each organization’s needs, including advice on preformation matters (such as selecting a state of incorporation and designing an effective governance structure), obtaining tax-exempt status, and operating to achieve programmatic and mission goals while reducing risk and avoiding unnecessary excise taxes or other penalties. Although the goal is to help organizations avoid controversies, we also vigorously defend clients during IRS audits and in litigations if they do arise.

We counsel clients in the following key areas:

  • Formation
  • Obtaining tax-exemption (federal and state)
  • Complex grants and endowments
  • Charitable solicitation
  • Cause-related marketing and commercial co-ventures
  • Corporate sponsorships
  • Unrelated business income tax
  • Executive compensation
  • Related party / excess benefit transactions
  • Donor advised funds
  • Supporting organizations
  • Advocacy and lobbying
  • Affiliated entities and for-profit subsidiaries
  • Private foundation rules
    • Self-dealing
    • Minimum distribution requirements
    • Excess business holdings
    • Jeopardizing investments
    • Taxable expenditures
  • Impact investments (program-related, mission-related, and social impact)
  • Joint ventures
  • Real estate transactions
  • Mergers and acquisitions
  • Corporate restructuring
  • International operations

In addition to tax compliance, we also work with boards to develop and improve governance policies and processes and we advise on fiduciary responsibilities and best practices. Our tax-exempt clients are also supported by attorneys across the firm who advise on critical issues outside of tax, including labor and employment, intellectual property, employee benefits, real estate, litigation, and bankruptcy. As part of our Nonprofit & Association industry group, our tax-exempt attorneys make sure that clients have the full support they need in all areas of their operations.