NOVEMBER 2016

STATE LAW

 California

A recent court decision declared that the Attorney General could not require the filing of the Schedule B as part of registration for the plaintiff in the case who demonstrated that its’ supporters were being harassed. This decision is only an “as applied” ruling. It does not invalidate the requirement for other organizations. With the current Attorney General leaving office, it is unclear whether the State will appeal.

Michigan

A bill that was introduced to clarify and expand the criteria to be used for local community real estate tax exemption for tax exempt organizations will not be voted on in this season of the legislature. The bill was intended to limit the ability of municipalities to levy tax on local tax exempt organizations.

Mississippi

As of January 1, 2017 all filings must be done online. Paper forms will no longer be accepted.

Oregon

Federal authorities have charged South Beach Missions in Oregon City with promoting an illegal tax shelter by encouraging taxpayers to set up their own affiliated churches. South Beach Missions has registered close to 500 affiliated corporations.

Vermont

According to a new report issued by the Attorney General, paid fundraising in the state has been declining over the past three years. The report estimates a drop of 50% from 2013 to 2016.

 OTHER MATTERS

 FTC & NASCO Announcement

These two major regulatory agencies will host a conference entitled “Exploring Consumer Protection Issues in Charitable Solicitations.” The announcement was made on the Federal Trade Commission’s website and encourages submission of comments from the public including original research and academic papers. The conference will be held on March 21, 2017 at the Constitution Center, 400 7th Street, SW, Washington, D.C. 20024. It is free to the public.

FTC Opinion

The Staff has issued an opinion reversing its opinion of 2009 on the use of Soundboard Technology. This technology allows the delivery of a recorded message that is monitored by a live operator. The advantage of the system to the telefunding world is several-fold. First, the increased efficiency reduces cost, and second, it guarantees the delivery of a perfect presentation without human error or misrepresentation.

IRS

The IRS has announced that effective April 1, 2017, there will be new internal guidance for its agents on issuing information document requests. Under the new process, taxpayers will be more involved in the process and the examiners will be more willing to discuss the issues being examined and the information needed for the examination prior to issuing the request for the information. It is hoped and expected that the new process will open up more meaningful communication between the agent and the entity that is under examination.

New Report from the League of American Orchestras

A transition has taken place on how your local symphony is being supported. Until recently, most symphonies and orchestras received the majority of their support from ticket sales. However, a new report released just this past week indicates that the transition is now complete. Symphonies and orchestras, on average, now receive more of their support from charitable donations (assuming most orchestras have converted to 501(c)(3) status) than they do from actual ticket sales.

Postal Service News

The Alliance of Nonprofit Mailers reports that the Postal Regulatory Commission has approved new postal rates for 2017. The new rates will go into effect on January 22, 2017.

The Alliance also reports that the U.S. Court of Appeals has denied the USPS appeal of the exigent surcharge renewal.

 Overtime Pay

 A federal judge in Texas has enjoined (for now) the new Federal rules that would have expanded overtime pay to more than 4 million workers (who previously were not covered). The rule issued by the Department of Labor was to go into effect on December 1, 2017. The rule would have made overtime pay available to full-time salaried employees up to $47,476 a year (which is double the current threshold).

The United Kingdom

The Charity Commission reminds everyone that as of November 1, 2016, new rules for charitable fundraising start. They affect the trustees’ annual report of larger charities that fundraise from the public, as well as the content of agreements that must be in place when professional fundraisers or other businesses participate in the raising of money on behalf of charitable organizations.

A Veterans’ organization was raising funds with professional fundraisers who identified themselves as volunteers. As a result, The Charity Commission ordered Support the Heroes to suspend all fundraising activities and moved on to freeze the organization’s assets.