Organizing an Illinois Not For Profit Entity

By: William A. Price, Attorney at Law, wprice@growthlaw.com, Member, Business and Securities Law Section Council Michael R. Karnuth, Attorney at Law, karnuthlaw@gmail.com, Member, Business and Securities Law Section Council I. Introduction As of 2016, there were 22,743 nonprofit organizations in Illinois. These entities range from hospital systems with over 1,000 employees to high school robotics…

Nonprofit Organization Killers No. 1: Loss of Federal Income Tax Exemption

Corporate or trust income tax at the highest rate (21% for corporations, 35% for trusts, in 2019)[i] applies if a nonprofit entity fails to qualify, engages in prohibited transactions, or stops operations that are exempt from taxation.[ii] 378 entity 501(c)(3) exemptions are listed by the IRS as having been revoked through formal hearings since 2005,…