Tax-exempt and nonprofit organizations and associations have come to rely on MLA's depth in representing trade associations, professional societies, charter schools, institutions of higher education, public charities, donor advised funds, large and small family and corporate private foundations, supporting organizations, private operating foundations, social welfare organizations, task forces, charitable trusts, endowment trusts and other nonprofit entities. With decades of collective experience, we have honed our skills in handling matters for these organizations, most of which are corporations recognized as tax-exempt under the Internal Revenue Code.
Tax-exempt and nonprofit clients turn to us for assistance with a wide variety of issues and matters impacting their business and operations, including:
Tax Exemption, Unrelated Business Income Tax and Tax Compliance
MLA provides tax advice to tax-exempt and nonprofit organizations on a wide variety of issues, from obtaining initial tax-exempt status from the Internal Revenue Service (IRS), to drafting and obtaining private letter rulings from the IRS on specific transactions and issues impacting these types of organizations, to defending our clients in audits and appeal by the IRS or state taxing authorities. MLA structures and negotiates transactions and arrangements to eliminate or reduce exposure to unrelated business income tax and excise taxes applicable to tax-exempt organizations and persons affiliated with those organizations. MLA designs transactions our tax-exempt organization clients seek to undertake with both other tax-exempt and nonprofit organizations and for-profit companies, which, in many cases, require additional analysis and understanding of the applicable state nonprofit laws.
Our tax services for tax-exempt and nonprofit clients include:
Preparing the Application for Recognition of Exemption with the IRS and state and local authorities;
Reviewing and advising with respect to the IRS Form 990 and state income tax returns;
Advising on transactions between the tax-exempt organization and founders, donors, officers, board members, or employees to demonstrate and document compliance with the excess benefit rules (so called intermediate sanctions rules), self dealing rules and the inurement prohibition;
Advising on policies and implementation of practices to establish and demonstrate reasonable compensation, including incentive compensation plans, nonqualified deferred compensation, supplemental retirement plans, qualified retirement plans, and other executive benefits;
Advising on the federal and state tax implications of activities such as insurance and other affinity programs, corporate sponsorships, trade shows, advertising and those other activities and programs that may give rise to nondues revenue and unrelated business income;
Counseling regarding charitable giving and planned giving programs and assisting with the design of specific giving transactions and endowment policies;
Advising with respect to the limitations on political activity;
Structuring and counseling on the federal and state tax ramifications of major events in the life of a nonprofit organization, from incorporation through merger, acquisition, combination, reorganization, purchase, sale and dissolution; and
Representing clients before the IRS and state tax authorities.
Corporate Governance, Organization and Formation
Corporate governance is a vital part of organization management. Sarbanes-Oxley reforms in the for-profit sector have spawned state and federal requirements related to nonprofit governance and management and heightened public scrutiny. To address these requirements and scrutiny, we provide a wide range of corporate governance services for tax-exempt and nonprofit organizations such as:
Reviewing the Articles of Incorporation, bylaws, policies, and procedures, and updating and/or amending as needed;
Helping to comply with the legal requirements of the jurisdictions in which an organization is incorporated and/or doing business, and advising regarding changes in such requirements;
Advising on appropriate governance and organizational structures;
Counseling on conflict of interest questions and matters involving conduct of meetings and parliamentary procedures;
Counseling on trends in corporate governance and recommending ways of dealing with the heightened public scrutiny of nonprofit governance and activities;
Advising on the creation of subsidiaries and title holding entities and the legal relationship between an organization and its subsidiaries or corporate parent;
Advising on chapter development, governance and liability issues;
Advising on extraordinary corporate activities (i.e., merger, acquisition, dissolution, sale of assets, reorganization);
Working with an organization’s Board of Directors to help address the issues listed above, and other legal issues that may arise; and
Counseling organizations on corporate governance issues that are relevant to membership organizations, such as voting.
We also have extensive experience working on issues like accreditation, certification and state licensure, confidentiality and privacy issues as well as professional ethics.
We provide transactional counseling in a broad variety of areas to our tax-exempt and nonprofit clients including drafting, negotiating and advising on management company contracts, hotel, convention center and exhibitor contracts, royalty and publication agreements and agreements involving the licensing and protection of intellectual property rights. We also assist clients in software, computer service and system acquisition agreements. We draft real estate leases, subleases, assignments and purchase and sale agreements on behalf of these clients.
Insurance, credit card and other affinity programs as well as corporate sponsorships and trade shows offer tremendous opportunities, challenges and risks for our clients. We are authorities in helping tax-exempt and nonprofit organizations establish and structure such programs in order to maximize nondues revenue while at the same time minimizing taxes and potential liability concerns that are inherent in such programs. These organizations are also entering into more complex arrangements with other nonprofit, as well as for-profit entities. We advise, draft and negotiate joint venture, collaboration and affiliation agreements on their behalf and merge nonprofit entities.
Government and Legislative Affairs
MLA is a nationally recognized leader in the complex field of government affairs, as we provide our clients with a broad range of legal, governmental and political experience. MLA houses a highly acclaimed Public Policy and Regulatory Affairs practice with more than 60 attorneys and professionals, in seven offices in the U.S. and Brussels. MLA’s Political Law team is a Chambers USA nationally recognized practice that helps our nonprofit clients legally and ethically interact with government at the highest federal and state levels, and provides strategic advice on election law, ethics issues, campaign finance, issue advocacy, lobby disclosure, and pay-to-play. We also establish and counsel on Political Action Committees (PACs) to determine which status best meets clients’ intended purposes and activities. Once established, we advise and assist our clients in complying with the complex and varied disclosure requirements for political activities and verifying whether a political activity—such as sponsoring a fundraiser, hosting a candidate, engaging in issue advocacy, or financing "independent expenditures"—is permissible under the circumstances. We also provide guidance on tax consequences of various lobbying programs. Additionally, we counsel business clients who want to increase their visibility in the federal, state, or local governmental and political communities.
In addition to our experience in the above areas, we offer additional support to our clients through our strategic communications and crisis management services. Our professionals work with clients to develop messages that resonate with decision makers and augment government affairs efforts.
Employment and Employee Benefits
MLA represents a number of tax-exempt and nonprofit organizations that have a small or moderately-sized staffs, and no “human resources” departments. As a result, we frequently counsel such organizations on employment issues that arise in the day-to-day life of the organization, including questions/issues related to maternity or family leave, disability leave, and employee benefits. We have assisted organizations in creating employee manuals, containing basic policies and procedures, to provide a standard reference for such issues as vacation and sick time, performance reviews, as well as anti-discrimination and anti-harassment policies.
In addition, our employer services group is available to provide advice, counsel and training on all aspects of labor and employment law, including:
Pension, health and welfare funds, and other employee benefit programs;
Executive compensation and benefits issues;
Employment standards and discrimination questions;
Separation from employment, including the termination of employees;
Compliance with federal and state wage and hour laws; and
Compliance with workplace safety laws and regulations.
Additionally, we have extensive experience with restrictive covenants and trade secrets. We have obtained temporary restraining orders and preliminary injunctions enforcing restrictive covenants, and have successfully defended against injunction actions in such matters.
Trademark and Copyright
There are numerous aspects to protecting the intellectual property rights of tax-exempt and nonprofit organizations. An organization may need to apply for trademarks or service marks to protect the goodwill associated with its goods and services. We have experience counseling these entities on the application process, as well as maintaining existing registrations and registration renewals. We provide assistance policing the marketplace to prevent infringement of trademark rights. We also assist our clients in filing for copyrights to prevent copying of materials created on behalf of our clients. Further, we advise clients on issues relating to cyber-squatting and domain name infringement. Finally, we have a great deal of experience with licensing and negotiating agreements surrounding such intellectual property.
Antitrust, Competition and Trade Regulation
MLA counsels tax-exempt and nonprofit clients (especially trade associations) on federal and state antitrust laws and unfair competition statutes and keeps clients informed of recent antitrust developments. We render advice on the antitrust implications of various activities such as organization meetings, statistical compilations, government affairs activities and lobbying, standard-setting and certification programs and codes of ethics. We also help our clients establish antitrust compliance programs and guide them and their members with respect to antitrust compliance.
Our attorneys are regular speakers and writers on tax-exempt and nonprofit subjects, and serve as directors and officers of various public service, nonprofit and tax-exempt entities.
Having served tax-exempt and nonprofit organizations for more than 60 years, MLA realizes that these clients are complex organizations with sophisticated legal needs that encounter unique opportunities and challenges. We strive to help clients identify these opportunities and challenges as we assist them in navigating through the many issues that they encounter, using our breadth and depth of experience to achieve positive outcomes.
- Political Law
- Private Client Services
- Public Policy and Regulatory Affairs
- Tax-Exempt and Nonprofit Organizations