Nonprofit Law/Non-profit funds

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Question
QUESTION: I have recently resigned as a volunteer with an animal rescue organization because the president of the organization is registered as a non-profit with the state of Florida, but uses the money raised for his personal and household use while the sick dogs under his care go untreated and the vet/boarding go unpaid. Money has been raised via the internet for specifics dogs, yet months later, the dogs are non-treated for their illness. This person has misrepresented his 501c status to gain monies and goods from other 501c organizations. Is it legal for a non-profit to use money for their own personal and household use?

ANSWER: No it is not legal for a 501(c)(3) organization to fund insiders. Internal Revenue Code section 501(c)(3) which is available at:
http://pages.citebite.com/w8p5e1ayxjv
has, in part, that the 501(c)(3) organization must be "operated
exclusively for religious, charitable, scientific, testing for
public safety, literary, or educational purposes ... no part of the
net earnings of which inures to the benefit of any private
shareholder or individual".

Complaints could go to your State's Attorney General's Office as
that office generally oversees charities within the state. If the
action is criminal then your local district attorney may be
interested in prosecuting as at:
https://docs.google.com/open?id=0B4xNuGSpiyzgT3BybmZKSGxNa1U
which is a pdf file of 4 different news stories.

Complaints to the IRS regarding Exempt Organizations are discussed
at
http://www.irs.gov/irs/article/0,,id=178241,00.html
A referral of an exempt organization may be made by submitting Form
13909, Tax-Exempt Organization Complaint
http://www.irs.gov/pub/irs-pdf/f13909.pdf

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    





---------- FOLLOW-UP ----------

QUESTION: This person if only a non-profit and have made several excuses for not turning in his financials and application for his 501c as he has a personal dealings with the IRS in the past. He feels as though being registered as a non-profit allows him to raise money for dogs and use it for his personal/household needs as he is unemployed. Is this legal for
him to raised money under a dogs name and use it for his own needs while the dog does not get the treatment for which the money was raised?

Answer
If he is not informing people that donations to the nonprofit are deductible by donors on their federal income tax returns, then the issues are state issues under Florida law.  From what you wrote to me he has misrepresented the beneficiaries of charitable funds and that would be illegal under any state's law.

Specifically see http://www.800helpfla.com/soc.html

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

Nonprofit Law

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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