The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and went into effect for taxable years starting January 1, 2018. Among its many changes to the tax code are certain provisions prohibiting tax exempt organizations from deducting expenses for certain fringe benefits provided to their employees. The change puts tax exempt organizations on a level playing field with for-profit entities with regard to certain employee benefits.
Megan C. Spratt
Ms. Spratt counsels trade and professional associations, charitable entities, and other nonprofit organizations on a wide variety of legal matters, including tax, lobbying, regulatory compliance, merger, contract, and corporate issues. Prior to finishing law school, Ms. Spratt served as a Judicial Intern for The Honorable Marvin J. Garbis of the U.S. District Court for the District of Maryland and as a Mayoral Fellow with the Mayor's Office of Neighborhoods in Baltimore, Maryland.
- Recipient: Maryland Distinguished Scholar
Memberships & Activities
- Member: District of Columbia Bar Association
- Member: Maryland State Bar Association
- Member: American Society of Association Executives
- Member: American Bar Association
- Member: Association Law & Policy Editorial Advisory Committee, American Society of Association Executives
- ASAE Certificate in Association Management
Nonprofit, Corporate & Governance Issues
- Corporate governance issues applicable to nonprofits, including governance policies requested by the Internal Revenue Service, amendments to articles and bylaws, Sarbanes-Oxley compliance, restructuring, best practices, and state corporate filing requirements
- Board issues, such as board size, committee structure, recruitment, orientation, and elections
- Advise on corporate combinations, including mergers, consolidations, and transfers of assets; Conduct due diligence prior to mergers and draft due diligence reports
- Analyzed a charitable, educational organization’s Articles of Incorporation and Bylaws to determine its precise membership requirements
- Performed a legal audit for a large, nonprofit association in the financial services industry
- Incorporate and obtain tax exempt status on behalf of a fire rescue organization; incorporated a local, community healthcare organization
Joint Ventures and Subsidiaries
- Analyzed issues regarding the management of a professional association's various affiliations and chapters, including chapters overseas
Tax Advice, including Unrelated Business Income Tax Issues
- Federal and state tax laws applicable to 501(c)(3) and 501(c)(6) organizations and their affiliates
- Unrelated business income tax issues
- Applications for federal and state tax exemption
- Reinstatement of tax exempt status that has been revoked by the Internal Revenue Service
- Charitable solicitation and other fundraising activities
- Provided legal advice to a trade association in the retail sector on the tax treatment of revenue arising from its magazine
Nonprofit Labor & Employment Advice
- Employment advice, including employment agreements, employment policies and handbooks, and noncompete agreements
- Intellectual property, copyright and trademark licensing
- Counsel on international legal issues affecting global nonprofit organizations
- Advise on a wide variety of certification and accreditation issues
- Negotiate and draft terms of agreements with hotels, convention centers, and independent contractors, such as website design firms, publishers, certification exam administrators, and meeting management companies
- Advised a school on its obligations under the Americans with Disabilities Act
- Counseled an international certification organization on how to manage its various international offices to ensure the consistent administration of its credential worldwide
More associations are instituting automatic membership dues renewal programs, where members’ credit cards are stored and charged periodically. While this payment structure is very appealing to many associations, certain legal issues should be carefully considered before proceeding.
On September 8, 2015, the Department of Justice issued technical assistance on testing accommodations under the ADA. The document covers who is entitled to testing accommodations, what types of testing accommodations are required, what documentation may be required of the individual requesting the accommodations, prohibited flagging policies, and how test scores for those receiving accommodations should be reported.
The new guidance from the Equal Employment Opportunity Commission, the first update on the issue in more than 20 years, clarifies when and how an employer may consider job candidates' past arrest and conviction records without violating federal discrimination law.
Many nonprofit Section 501(c)(6) organizations set up separate foundations to carry on certain charitable or educational activities for the parent organization. We have helped many nonprofit organizations set up subsidiary foundations--this is very common and can enhance the activities and fundraising options for the parent organization. Provided below is background information on setting up a foundation.
As computer technology continues to make rapid advances, the issue of what constitutes an appropriate accommodation for test-takers under Title III of the ADA is being re-examined by the courts. Specifically, in the case of Enyart v. National Conference of Bar Examiners, Inc., the U.S. Court of Appeals for the Ninth Circuit ruled that accommodations should be evaluated under a “best ensure” standard, rather than a reasonable/effective standard.
The IRS recently announced that its modernized e-file system will not be available from January 1, 2012 through February 29, 2012 for electronic filing of Forms 990, 990-EZ, 990-PF and 1120-POL information returns. The system will not be available during this time period so that certain changes can be made to IRS systems for the 2011 tax year. However, the 990-N e-postcard filing system will not be affected by this temporary suspension.
Legal audits provide a good opportunity for nonprofit organizations and associations to prevent unexpected liability by addressing and resolving problematic issues before they escalate. Risks of liability are a serious concern for nonprofit organizations and associations. A legal audit is particularly important if the association or nonprofit organization has recently undergone a change in management, so that preexisting problems are not attributed to the new leadership.
What Associations and Nonprofit Organizations Need to Know about the New DC Nonprofit Corporation Act
Nonprofit corporations incorporated in or registered to do business in the District of Columbia will have a new law to contend with starting on January 1, 2012. Although the new nonprofit law offers some benefits, it is more verbose, more complicated, and less user-friendly than the current law.
There is no denying that social media’s importance to organizations, including nonprofit organizations and associations, is growing exponentially. Blogs, Listservs, YouTube.com, and social networks like Twitter and Facebook offer nonprofits a range of benefits, enabling them to market themselves in new ways, disseminate their messages and missions, educate users, connect with other nonprofits, recruit volunteers, solicit donations, and increase audience interaction. These benefits, however, come with certain risks.
Organization Failed to Qualify as a Public Charity because its Supported Organizations were not Easily Identifiable
D.C.’s federal appellate court recently affirmed a trial court’s decision that a Section 501(c)(3) Maryland nonstock corporation did not qualify as a public charity under Section 509(a)(3) of the Internal Revenue Code because the foundation’s “supported organizations” were not identified sufficiently.
Whiteford, Taylor & Preston is pleased to announce that Dorothy Deng and Megan Spratt were awarded certificates in recognition and completion of the ASAE University Certificate Program in Association Management.