New tool for increased transparency!

By | Nonprofit

The Center for Public Integrity has come out with an amazing new search tool that enables anyone that is interested to better understand how money flows in the nonprofit sector.  The tool is in part intended to combat the lack of transparency that exists around funding for “dark money” organizations involved in the political process.  However, I think it is also a great tool for donors, potential employees and volunteers, and other interested parties to better (and definitely more efficiently) understand more about who funds any organization.  Plug in your favorite organizations and see what you find!

The data in the search function does not cover everything — according to the Center for Public Integrity, they have about 850,000 990s downloaded and in the system from about 250,000 organizations.  However, this is a great beginning to enabling more information gathering without having to download and review the 990s yourself.  This is an example of the type of information mining that we thought would come out of the requirement that the IRS release 990 data in machine readable and searchable formatting.

New requirement for some 501(c)(4) organizations

By | Nonprofit

Since late December 2015 we have been on the lookout for implementing regulations regarding the new notice requirements on certain 501(c)(4) organizations.  The IRS has now issued Revenue Procedure 2016-41 and the Treasury Department issued final and temporary regulations implementing the new requirement that organizations must notify the IRS within 60 days of their creation if they intend to operate as an organization described under Section 501(c)(4).

Section 506 was added to the Internal Revenue Code as a part of the Protecting Americans from Tax Hikes Act of 2015.  Section 506 requires that certain Section 501(c)(4) organizations must provide notice to the IRS within 60 days of the organization’s creation if it intends to operate as a 501(c)(4).

Who it does and does not apply to:

  • The new requirement does not apply to organizations that, on or before December 18, 2015, applied for a determination letter using Form 1024 or filed at least one 990-series return.
  • It does apply to organizations in existence on or before July 8, 2016 that have not applied for a determination letter using Form 1024 or filed at least one 990-series return.  Organizations not excluded for meeting either of the above requirements are subject to a transition rule that gives them until September 6, 2016 to file the required notice and not be subject to penalties.
  • It does apply to new 501(c)(4) organizations formed after July 8, 2016.

Organizations subject to the Section 506 notice requirement must electronically file Form 8976.  This filing is made at*  The individual filing the notice should be able to receive confirmation of the filing or notice of non-acceptance.  The filing must be accompanied by a $50 user fee, which will be made through

Organizations that fail to file the Form 8976 are subject to a $20/day late filing penalty, up to a maximum of $5,000.  Certain responsible persons may also be jointly and severally liable for an additional penalty of $20/day up to a max of $5,000.  Either penalty can be abated if reasonable cause can be shown.

The above requirements may vary depending on the specific facts associated with your organization.  If you want help understanding how the new requirement applies to your organization, or you would like help with the new filing, please contact our office.



*blog post updated 7/19/16 to reflect change in URL for registration/filing

A bad sign?

By | business

From the offices here at Rubric HQ, we can see one of the signs mounted high on the new Wells Fargo towers near the Vikings stadium. Because of an injunction issued by a federal court on June 23, 2016, however, we may not be able to see that sign much longer.
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Minnesota’s Revised Limited Liability Company Act

By | business

We Minnesotans like to be different. Just look at our football stadium, our beer, or our music scene. When Minnesota first created a limited liability company act, it did so in a unique way – most other states modeled LLCs after partnerships, but Minnesota mirrored laws governing corporations. In 2014, Minnesota decided to revise the limited liability company act, making it much closer to the majority rule. But as you may expect, the Revised Limited Liability Company Act retained characteristics unique to Minnesota. Read More

Minneapolis Paid Sick Leave Ordinance

By | Nonprofit

On May 27, 2016, the Minneapolis City Council voted unanimously to approve an ordinance that will require employers to provide paid sick leave to most workers.

While I don’t typically advise clients on employment law issues, I want to bring it to your attention so that you may start to prepare for when the law goes into effect.

The ordinance will take effect July 1, 2017, and will require employers with six or more employees to provide one hour of paid sick time per 30 hours worked, to a max of 48 hours per year. Additionally, companies with five or fewer employees will be required to provide up to 48 hours of sick leave to their employees; however, that time can be unpaid.

Here is an article outlining some of the requirements, as well as penalties that can be imposed for non-compliance. I would strongly advise reaching out to employment counsel to ensure your organization can meet the requirements and avoid any penalties. Please do not hesitate to contact me if you need assistance locating an employment law attorney.

1023-EZ fee going down July 1st

By | Nonprofit

The IRS just announced today, via Revenue Procedure 2016-32, that it will be reducing the user fee (filing fee) for the 1023-EZ from $400 to $275, effective July 1st.  While it is cheaper, faster, and easier — I still continue to caution users of the 1023-EZ. For my real inital thoughts (the snarky ones), please contact me privately (or perhaps read about it on Twitter).

Minnesota’s amended architectural barrier law

By | business

Minnesota’s Human Rights Act (Minnesota Statutes 363A) duplicates and often expands rights protected under federal laws. One provision that has garnered attention recently is 363A.11 – public accommodations. This provision parallels federal protections found in the Americans with Disabilities Act, specifically addressing architectural barriers that prevent persons with disabilities equal access to public accommodations.

Under the ADA, a person excluded from a business due to an architectural barrier can bring a lawsuit seeking an injunction – an order that the business remove the barrier. While the plaintiff could recover attorneys’ fees, damages are not available under the federal ADA. Under the Minnesota Human Rights Act, though, a plaintiff may recover damages.

Although these laws have been in place for more than a quarter century, they’ve come under scrutiny recently because a group used the state law as means to leverage monetary settlements from businesses without actually requiring the businesses they sued (or threatened to sue) to remove the architectural barriers. This had the unique effect of uniting business groups and disability advocates. Read More

EO Update Opportunity – TEGE Gulf Coast

By | Nonprofit

I am happy to announce that I, along with Heidi Christianson at Nilan Johnson Lewis, will be co-hosting a remote viewing/participation opportunity on June 10th.  The TEGE Council Gulf Coast Area will be putting an an Exempt Organization Update and is allowing remote locations to participate via Web-Ex.  This is a great opportunity to hear speakers you normally only hear at larger, national conferences!  For more information about the agenda and to register, please visit their website here.

Nilan Johnson Lewis is generously offering bagels and coffee for attendees that morning starting at 7:30.  Lunch will be on your own at some of the wonderful food trucks that populate the area, or in the skyway.  Nilan Johnson Lewis will not validate parking.

I have been told by the TEGE Gulf Coast folks that CPE has been applied for and approved for this program.  Currently there is no CLE credit provided (however that may change).