The IRS issued Notice 2019-09, which provides interim guidance in a fairly lengthy Q&A format relating to Code Section 4960, enacted on December 22, 2017. Code Section 4960 imposes a 21 percent excise tax on the amount of compensation in excess of $1 million and any excess parachute payment paid by an applicable tax-exempt organization to a covered employee. The interim guidance is intended to assist taxpayers in applying Code Section 4960 while the Treasury ... Keep Reading »
The Hidden Cost of Settling a Qui Tam Claim
Historically, taxpayers who made settlement payments to the government or relator under False Claims Act actions could offset those often considerable costs by deducting all or part of the payment for federal income tax purposes. But the Tax Cuts and Jobs Act, enacted in December, dramatically shifted the tax treatment of such payments, resulting in the potential loss of valuable tax benefits. Now more than ever, companies must carefully consider the tax treatment of ... Keep Reading »
Stop “Partnering” and Begin “Strategically Allying”
Tax exempt organizations often enter into relationships with other organizations that are collaborative in nature rather than merely quid pro quo. These relationships are frequently referred to as “partnerships” by tax exempt organizations because the connotation is one of teamwork and working toward a common goal. However, under state law, entering into a “partnership” can result in a host of liabilities that none of the “partnering” organizations intend. In addition, ... Keep Reading »
Mergers & Acquisitions
For better or worse, the economy has caused an increase in the consolidation of tax exempt organizations as less robust organizations have sought refuge for their programs in larger, more recession-proof organizations and as organizations of similar size or financial status have joined together to weather the economic storm. Whatever the reason, tax exempt organizations are increasingly finding themselves in the relatively uncommon territory of mergers and acquisitions. ... Keep Reading »
Intellectual Property
Tax exempt organizations often overlook their ownership and use of intellectual property, particularly their trademarks and copyrightable materials. Intellectual property (IP) use should concern a tax exempt organization because the organization must both (a) protect its IP; and (b) ensure that it is not infringing on someone else’s IP rights. Protecting the tax exempt organization’s IP requires identifying the IP and preferably registering it to secure rights in it. ... Keep Reading »