Tag Archives: tax exempt organizations

Cameron2head

Cameron Carter Named Partner at Rose Law Group

Cameron CarterArizona’s largest female owned law firm is proud to announce the appointment of Real Estate and Transactional Attorney Cameron Carter as the firm’s new partner at Rose Law Group pc (RLG).

Carter, who specializes in Real Estate Transactions, Acquisition, Due Diligence, Real Estate Finance, Development/Redevelopment, Land Use/Entitlements and Development Agreements, first joined RLG as a law clerk in 2006 while finishing law degree at the Sandra Day O’Connor College of Law at Arizona State University.

After passing the Arizona State Bar, Carter began practicing Real Estate law assisting clients with numerous acquisitions and depositions of the purchase and sale of land, multifamily and commercial properties.

Since 2007, Carter has also been advising clients on Development Impact Fees, Commercial Leasing, Closings, Investments, Landlord/Tenant, Tax Liens, Trustee’s Sale/Foreclosure, Construction, Municipal Law, Renewable Energy, Business Transactions and Community Associations.

He’s represented farmers, investors, developers, local and national home builders, REITs, charter schools, landlords and non-profit corporations in a variety of real estate transactions and other real estate and business matters.

“This has been a long time goal of mine to be a partner at Rose Law Group,” said Carter. “I enjoy helping clients add value by tackling complex real estate and development issues.  I’m thrilled to continue helping founder Jordan Rose implement her vision for providing exceptional service to our clients.”

While at Rose Law, Carter has worked to solve a number of issues involving development impact fees, building permits, eminent domain, right of way acquisition, rezoning cases, and use permits. Carter also works on a variety of election law matters including initiative and referendum, political committees, candidate qualification and campaign finance issues.

Jordan Rose founded Rose Law Group in 2000 and the firm quickly developed the reputation as being of one Arizona’s most innovative firms in the state.  Since its inception, Attorneys Court Rich and Ryan Hurley have also become partners.

Rose said Carter’s unique background of serving as a commercial construction manager at Jokake Construction, and holding a real estate broker’s license allows him to provide solid legal advice and makes great real estate business sense.

“I have seen a lot of great real estate attorneys, but never have I met one with the extensive real life real estate business background of Cameron Carter,” said RLG founder Jordan Rose.  “Cameron lives real estate and has a rare gift. He is both precise in transactional work, and a great land use and zoning attorney.  From the moment he walked in our doors 7 ½ years ago, I knew he was the future of Rose Law Group.  We are really blessed to have Cameron as a partner.”

As part of the new appointment, Carter will also head the Transactional Real Estate Department and with the upturn in the economy, Carter welcomes the challenge.

“The economy is rebounding, and we have to continue helping clients increase values, getting deals closed, recognizing risk, mitigating risks, and just exceeding their expectations on every acquisition,” said Carter.

Carter is a Cactus High School graduate and a fifth generation Arizonan. He feels strongly about serving the community. He has worked as a volunteer leader with the Boy Scouts of America and currently serves on the Board of Directors of the McCormick Ranch Property Owner’s Association, but his most important job is serving as a husband and father of four children.

 

Nonprofits Need To Be Prepared When Asking Law Firms For Pro Bono Assistance

In these tough economic times, nonprofit organizations are increasingly being relied upon for services, even as contributions continue to drop. Doing more with less has become the norm. In this lean environment, what happens if a nonprofit organization hits a legal road bump that could require hours of work from an attorney or law firm?

If they are lucky, nonprofit directors have planned for this contingency. In reality, however, legal issues sometimes catch nonprofit managers off guard, unprepared and lacking sufficient funds to cover legal expenses. And, finding an attorney or a law firm that provides pro bono legal work can be a challenge. Here are some steps nonprofits can take when seeking pro bono counsel.

Research is key

Ellis Carter, an attorney with Fennemore Craig, suggests doing research.

“The nonprofit should find out whether the firm has a policy regarding accepting pro bono work,” says Carter, whose practice focuses on advising nonprofits, charities and other tax-exempt organizations with respect to corporate, tax and regulatory issues.

Many times, larger firms have policies, liaisons or committees that screen pro bono projects, she adds. The screening ensures that the firm has the appropriate resources and expertise within its practice to provide the legal work required for the project.

“Be cautious about asking a lawyer or a firm to give pro bono advice in an area that they do not ordinarily practice in,” Carter says.

It might be rewarding for an attorney to give back to the community through pro bono assistance, but in complex matters facing nonprofit organizations, such as federal tax laws or state law constraints, it is important that the attorney providing assistance understands these laws, Carter notes.

Be prepared
While some firms have pro bono committees, other firms work through established programs such as the Volunteer Lawyers Program or other community organizations, says Rachel Lewis, marketing coordinator for Bryan Cave.

Demand for pro bono services has increased during this economic downturn, making it especially important for nonprofits to be prepared when seeking pro bono representation, Lewis adds.

“Bryan Cave has seen an even greater need for pro bono and has encouraged its lawyers to expand their commitment,” she says.

That means attorneys providing pro bono services will need to have a clear picture of what types of pro bono services organizations need and how best to allocate resources in order to meet those needs.

Carter recommends that if a nonprofit organization is planning to approach a law firm to request pro bono legal services, it should be prepared to provide articles of incorporation, bylaws, financial statements, the organization’s IRS determination letter, the organization’s most recently filed Form 990, and a compelling story regarding how pro bono services will help the organization impact the community.

“Obtaining pro bono counsel directly from a law firm to which the organization has no prior connection can be a challenge,” Carter says. “Frequently, law firms take on pro bono cases for nonprofits because one of the firm’s lawyers or clients has a connection to the organization.”

She suggests contacting community programs such as the Volunteer Lawyers Program as a first step toward finding pro bono legal assistance.

Volunteering is encouraged

Don’t be discouraged when seeking pro bono legal counsel. Law firms and even sole practitioners are committed to helping when they can. It is even encouraged.

“We have a special obligation to make our professional skills and other resources available to those who cannot afford to pay for legal services,” Lewis says.

Both Fennemore Craig and Bryan Cave encourage their attorneys to give back to the community through pro bono work.

In Arizona, philanthropic training starts in law school through service learning. The Sandra Day O’Connor College of Law at Arizona State University encourages students to help those who cannot afford legal services, says Kristine Reich, director of pro bono programs and student life at the law school. Reich coordinates more than two dozen pro bono programs and facilitates community outreach efforts.

Programs such the Advocacy Program Against Domestic Violence (APADV) and Wills for Heroes are just two of the pro bono efforts at the law school.

Students volunteering for APADV visit women in domestic violence shelters and, on an informal basis, answer any legal questions they may have, says Michelle Guina, a second-year law student at ASU and one of the program coordinators.

“The chance to have a legal education is such a privilege,” Guina says. “Pro bono opportunities in law school give you the chance to use what you’ve been given to give back to the community early in your legal career.”

www.fclaw.com | www.bryancave.com | www.law.asu.edu | www.vlpmaricopa.org


Arizona Business Magazine

February 2010

What It Takes To Form A Nonprofit Or Tax-Exempt Organization

It usually starts with a phone call from a client, or maybe another attorney in your office. Someone wants to set up a nonprofit corporation, usually a tax-exempt charity, often on behalf of a pro-bono client, and assumes it should be pretty easy.

Unfortunately, it’s not.

First, “nonprofit” is not the same as “tax-exempt,” although many people use the terms interchangeably. Nonprofit is a state law concept and is governed by the relevant state statute for nonprofit corporations. In Arizona, that would be Article 10, Chapters 24-40 of the Arizona Revised Statutes. Tax-exempt usually refers to being exempt from federal income tax under section 501(c) of the Internal Revenue Code. Furthermore, there are different types of tax-exempt organizations. The most common are 501(c)(3) organizations such as schools, hospitals, museums, community foundations, etc. But there are also other types of 501(c) organizations such as trade associations, which are exempt under section 501(c)(6), and social welfare organizations, which are exempt under section 501(c)(4).

Second, although the state filings to establish a nonprofit corporation are not unduly burdensome, there are a number of technical requirements that need to be followed. Also, the IRS exemption application, Form 1023, is not a simple one-page form; instead, it requires anywhere from 12-20 pages of information depending on the nature of the organization. With few exceptions, such as churches, an organization must file Form 1023 and receive a determination letter from the IRS in order to be tax-exempt, and cannot represent to potential donors that it is tax-exempt until such time as it receives such letter.

State law requirements for Arizona nonprofit corporations
In order to create the corporation under state law, an Arizona nonprofit corporation must file articles of incorporation. These will contain the name, purpose, powers and directors of the corporation, as well as the statutory agent for the corporation. The articles will also state whether the corporation will have members. Nonprofit corporations are not required to have members; in the absence of members, the directors will govern the corporation. However, if there are members, the members will elect the directors and will vote on major corporate actions. The procedure for electing members, and the rights of such members, is often set forth in the articles, but can also be contained in the bylaws of the corporation.

The articles are signed by the incorporator of the organization and are filed with the Arizona Corporation Commission. The filing fee is $40 ($75 if expedited treatment is desired). The articles are accompanied by a certificate of disclosure, which must be signed by the incorporator and any individuals who are directors or officers at the time the articles are filed. The articles must then be published (within 60 days after the articles are filed) in a newspaper of general circulation in the county in which the corporation carries on its business for three consecutive publications.

Once incorporated, the organization must file annual reports with the Arizona Corporation Commission and the Charities Division of the Secretary of State. The filing fees for such reports are nominal.

IRS tax-exempt filing (Form 1023)
IRS Form 1023 requires fairly extensive information about the operation of the organization. The two most important sections are Part IV (narrative description of activities) and Part IX (financial data). The IRS will want to know, in some detail, what activities the organization will carry on. In order to qualify under section 501(c)(3), the organization must be operated “exclusively for religious, charitable, scientific … literary, or educational purposes.” The narrative description should go into some detail (at least a page) outlining the exempt purposes of the organization and why such purposes qualify under Section 501(c)(3). If possible, prior IRS rulings relating to similar organizations should be cited as evidence that the new organization qualifies as exempt.

In Part IX, assuming the organization in question is a new organization, Form 1023 asks for projected budgets for the current year, plus the next two years. These budgets require both income information Ñ expected contributions, investment income, operational income Ñ and expense information, such as outgoing grants, fundraising expenses, wages, rent, interest and professional fees. The organization should make a good-faith attempt to be as detailed and accurate as possible, even though it is understood that actual operations may diverge from the projections. The IRS is simply interested in understanding the scale of magnitude of the organization’s operations, as well as the relative allocation between internal administrative expenses, and expenses directly used to carry out the exempt purposes of the organization.

The filing fee is currently $750 (reduced to $300 if the organization expects its annual receipts to be under $10,000). The form should be filed within 27 months of its date of incorporation and, if approved by the IRS, will be retroactive to the date of incorporation. The IRS review time will vary substantially depending on the complexity and size of the organization. For a simple charity with no complications, IRS approval may only take six to eight weeks. However, if the organization has substantial activities or is expected to be involved in significant transactions with private parties, such as an organization focused on community development, it may take six to 12 months for IRS approval. If the IRS has any questions or concerns, it will contact the organization in writing while the application is pending and will normally give the organization 21 days to respond.

Once approved, the organization will be required to annually file Form 990 disclosing the income and expenses of the organization, the compensation paid to officers, directors and key employees, and other information. Form 990 does not normally require the payment of any tax, but is an information return for the IRS to monitor the activities of the organization. Form 990, and Form 1023, are publicly available documents and must be disclosed if someone contacts the organization requesting copies. Thus, organizations should keep such potential disclosure in mind when preparing the forms.

Conclusion
Forming a nonprofit and securing tax-exempt status is a little bit more involved than simply filing two pieces of paper with the state and with the IRS. Anyone working with a new nonprofit should also work with an accounting or legal professional that is familiar with the state and federal requirements pertaining to such organizations.

Michael G. Meissner is a partner at Squire, Sanders & Dempsey’s Cleveland office. He works with the firm’s Phoenix office on tax issues. Meissner can be reached at (216) 479-8593 or at mmeissner@ssd.com. The firm’s Phoenix office can be reached at (602) 528-4000.