Contact Attorney Richard Keyt: 480-664-7478|rk@keytlaw.com

Top 5 Compliance Problems for 501(c)(3) Organizations

Nonprofit Law Blog:  “IRS exempt organizations audit manager Joe Kroll spoke at a program for the Bar Association of San Francisco yesterday and discussed five common ways charitable organizations jeopardize their 501(c)(3) tax-exempt status.

  1. Private inurement / private benefit.
  2. Lobbying and political activity.
  3. Filing requirements. Small 501(c)(3) organizations that have not previously filed Form 990 or Form 990-EZ may be required to electronically file Form 990-N. Failure to file for three consecutive years will result in revocation of exempt status.
  4. Unrelated business activities.
  5. Employment issues (particularly the  employee-independent contractor-volunteer distinctions).”

Madoff Victims Sue SEC for $2.4 Million

Law.com:  “After the relentless pounding the Securities and Exchange Commission has received for failing to expose Bernard Madoff’s fraud, it was probably only a matter of time before the agency was sued for negligence.  That time came Wednesday, when attorneys at Herrick Feinstein filed a complaint against the government (pdf) in Manhattan federal district court. Herrick represents two of Madoff’s victims — disabled retiree Phyllis Molchatsky and Dr. Steven Schneider — who lost more than $2.4 million between them.”

See a copy of the complaint.

Overlawyered: CA Appeals Court Reverses Trial Court

Workplace Prof Blog:  “In plaintiff’s race, employment discrimination lawsuit against United Airlines, trial court’s grant of summary judgment in favor of defendants is reversed as to eight causes of actions as they must be decided by the jury. Furthermore, the trial court’s order sustaining 763 of 764 of defendant’s objections was a manifest abuse of discretion. . . . Five thousand, four hundred, fifteen pages of material were before the trial court . . . . While not reading the papers cannot be condoned, it can perhaps be understood, as we hesitate to speculate how long it would take a trial court to meaningfully digest over 2200 pages of separate statements, analyze and rule on 764 objections set out in 325 pages, review it all in light of the applicable law, and then write a proper order.”

Feds Want to Control Our Daily Lives

Washington Post:  “[A] handful of Obama appointees have been quietly exercising their power over the trappings of daily life.  They are awakening a vast regulatory apparatus with authority over nearly every U.S. workplace, 15,000 consumer products, and most items found in kitchen pantries and medicine cabinets. . . . The new regulators display a passion for rules and a belief that government must protect the public from dangers lurking at home and on the job — one more way the new White House is reworking the relationship between government and business. . . . In their first few months on the job, FDA Commissioner Margaret A. Hamburg and deputy Joshua M. Sharfstein — both with backgrounds running public health agencies — notified General Mills that it was violating the law with its two-year-old marketing campaign that said Cheerios can lower cholesterol by 4 percent.”

The Future of the Internet

Mises Economics Blog:  “There’s concern throughout the Internet after the Federal Trade Commission announced today

[October 5, 2009] that it has the power to regulate blogs, specifically blogs that endorse commercial products. The unelected FTC – composed entirely of Bush appointees – now mandates that “bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.” This is merely a first step towards regulating the content of blogs themselves, as anyone who offers a personal testimonial about any product will be liable, under the Federal Trade Commission Act, should the FTC disagree with your personal experiences.

If you’re wondering just how big a mess the FTC can make, consider a decision published just last week by D. Michael Chappell, the FTC’s chief administrative law judge. Judge Chappell caught FTC prosecutors in a blatant attempt to lie their way out of a bad situation arising from yet another misguided attempt to micromanage the World Wide Web. It’s a case that demonstrates the FTC’s unique combination of stupidity and narcissism.

Copyright 2009-2015 Richard Keyt
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