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Nonprofit Law/STATUTE OF LIMITATIONS

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Question
WHAT IS THE STATUTE OF LIMITATIONS FOR A NON PROFIT 501 (C-3) FOR ANY PRIVATE INUREMENT OR EXCESS BENEFIT TRANSACTIONS. THEY DO NOT NEED TO FILE 990.


I talked with you before and am in discussions with my church and they brought this up?


Thanks Joe

Answer
Whether a 501(c)(3) organization is required to file Form 990 or not, they are still subject to the regulations as to private inurement and excess benefit.  I don't know if I sent you the links to the regulations, but they do not refer to filings but to 501(c)(3) organizations.

As to the limitations on the IRS taking action, see IRS publication 4221-pc "Compliance Guide for 501(c)(3) Public Charities" which is available at http://www.irs.gov/pub/irs-pdf/p4221pc.pdf on  pdf page 32:
--- Start of Excerpt ---
Generally, the statute of limitations runs three years after the date the return is due or filed, whichever is later. An organiza­tion may be required to retain records longer for other legal purposes, including state or local tax purposes.
---End of Excerpt---

That 3 years relates to limitations as to returns or filings, but does not apply when the issue is something other than what is in a filing. It is not the burden of the IRS to show a limitation of action.  The burden, in a defense, is on the taxpayer.  Therefore, if the organization thinks they have found something in the Code or Treasury regulations that provides a statutory basis for a limitation on action, please send me that link and I will reply further.  Otherwise, there is no applicable limitation. There is nothing, for example, as to a limitation in the Regulations as to Excess Benefit transactions.
http://www.law.cornell.edu/uscode/text/26/4958


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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