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Nonprofit Law/501c3 nonprofit audit

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Question
QUESTION: Can you tell me if someone is threatening to audit a 501c3, what does that entail? What is the process of auditing a 501c3 like?

Thanks.

ANSWER: Some 501(c)(3) organizations have provisions in their bylaws to allow certain members or directors to require an audit.  As for persons outside of the 501(c)(3) organization, there is no one that I know who has authority to require an audit except a government authority.  Let me know the position of the person who is "threatening to audit" and then I will reply further.

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 is from an outside member of a family who we helped to raise money. She is leaving us messages threatening to audit? should we take it seriously? She has not sent any attorney letter as of yet.

Answer
If someone sues your organization, during the stage called "discovery" generally the courts allow them to ask for your financial information and you would be required to turn that over to the plaintiff (the person suing).  Otherwise, that person may file a complaint about your organization to a government authority, like the IRS and they have authority to audit (look over your financial records).

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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