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FREQUENTLY ASKED QUESTIONS
1. Can a non-profit organization purchase property?
2. Is a non-profit organization impacted by the death
of one of its board members?
3. How does a non-profit organization account for
non-cash contributors?
4. Does a church organization have to file a 990
return?
5. What is a Legal Audit?
From time to time a non-profit organization that has been in
existence for several years
may find itself wondering if their organizational documents
are correct or have they kept pace
with the ever changing world surrounding them. The law firm
of Dryer and Associates, P.C.
provides a legal audit, which is a "legal check-up"
for the non-profit organization. This may
be done on-site or off-site. Many of the organizations find
it to be a great benefit having an on-site
legal review of their corporate documents to ensure that
proper minutes are kept for
meetings and that the documents provide ample protection for
the Board of Trustees for the nonprofit
organization. The organizations also find it beneficial to
have additional time to direct
questions to the attorney doing the on-site legal audit
review. The cost associated with a legal
audit is $750.00 for off-site and $1,400.00 plus travel
expenses for on-site.
The law firm of Dryer and Associates, P.C. is not an
accounting firm, however it can assist the organizations
in completing their 990 returns. The completing and timely
filing of the 990 return is essential for a non-profit
organization to keep its exempt status. Also, if an
organization does not file a 990 return promptly, there are
serious penalties associated with the failure to file. The
fines associated with the non-filing of a 990 return range
from $750 up to $2000 per return. In addition to the fines,
the IRS may/will accrue interest on any outstanding fine
amount. If the organization fails to timely file a 990
return, it could find itself in a situation that would
require the organization to spend significant resources just
to pay the penalties and interest associated with the
non-filing.
Church Acquisitions:
Dryer and Associates, P.C. also handles land acquisitions
involving churches. Transactions between non-profit
organizations must be handled carefully and that is why it
requires an attorney that has expertise in the area of
non-profit transactions. Should a non-profit organization
improperly transfer assets, the non-profit organization
could put both the non-profit and the receiving corporation
at risk.
Often
churches will opt to obtain bond financing for their church.
If a church chooses to obtain church bonds as a financing
vehicle, the church organization is required to have a
church bond issuing counsel to act on behalf of the church.
The bond company will always have bond counsel that provides
legal direction to the bond company for the benefit of the
bond company. However, the church is required to have their
own counsel. David M. Dryer has acted as church bond counsel for
many churches over the last 15 years. David has represented
churches using bond acquisitions monies from four
hundred thousand up to multiple million dollar
refinance and church acquisition projects.
Compensation Issues:
Dryer and Associates, P.C. can provide non-profit
organizations with salary opinion letters and other
compensation advise and directives. Proper and reasonable
compensation is necessary for a non-profit organization
to keep in compliance with the IRS requirements. Over the
last several years, the IRS has become more stringent on
reasonable compensation, compensation committees and
conflict of interest policies regarding the setting and
adjusting of compensation of officers and employees of
non-profit
organizations.
Dryer and Associates,
P.C. can provide the non-profit organization with the
necessary applications and proper documentation as well
as accurate and up to date legal advise concerning
housing allowances. This will insure that the church
organization and the Pastor or Minister and other
qualifying employees are in compliance with the IRS
requirements.
Sometimes new Ministers rely on the
church to provide them with accurate information
regarding the housing allowance and the reporting and
documentation thereof. Often times Ministers are not
aware that they have not properly accounted for their
approved housing and are only told of their deficiency at
an IRS audit. A church could find itself in a position
where proper documentation was not provided and thus their
Minister would be required to pay self employment tax on
all of the Ministers compensation which could add up to
thousands of dollars in back taxes and penalties. This could
provide a devastating effect on both the church and the
Minister. Private inurement is taken very seriously with the
Internal Revenue Service and can cause a variety of problems
for the non-profit organization.
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