Nonprofit Law/inurement +

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Question
We are a 501C3 corp. titled as the "Disabled Veterans Rest Camp". I am concerned from a few levels and hope it is within the scope of this forum.

Although corporately titled as "Disabled Veterans Rest Camp" all materials are titled something different for marketing purposes and so ALL veterans will know they are allowed to camp here. OK or not OK?

Camp is run by a board with full financial authority to solicit as well as authorize expenditure of donated funds. Problem I see is they are also Vets and also participate in the camp grounds (permanent trailers on site) in all facets as customers. Is this private inurement? Is this legal?

Lastly and thank you for patience; one hand to type with. Corporate owned vehicles and MANY areas of camp NOT ADA compliant which prevents use by some of the Vets wanting to come in.

Really last part. Camp owned vehicles are sometimes loaned to employees for private use. OK or not legal?

Answer
I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. I will, though give you some information as to the State law issues.

1. You did not give me the state you are in, but most states have laws that prohibit what is called material misrepresentation and, depending upon the circumstances, using a name for the business (profit or nonprofit) that presents to the public a material misrepresentation may cause problems. Also, most states require businesses to register dba's.

2.   The IRS does not allow 501(c)(3) organizations to give someone more compensation than what  is reasonable. Starting on pdf page 10 of www.irs.gov/pub/irs-tege/eotopici93.pdf the IRS discusses many of the factors it would look at to decide whether a compensation is reasonable. When board members or officers are provided with space for living then that is considered compensation but if the organization is not declaring that as compensation, then the IRS would possibly see the provision of living space as private inurement, which is prohibited.  Note, though, that, if the organization requires the workers to be on the site, then the provision of food and housing is not taxable to the employee (but that would require that the employee is at providing work valued at least in the amount of the compensation.
26 U.S.C 119

3. I suggest you contact the ADA http://www.ada.gov/ 800 - 514 - 0301 (voice)
800 - 514 - 0383 (TTY)

4. Use of vehicles is a taxable fringe benefit.
http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf (pdf page 50)

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.  

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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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