This page is a source of information about current amendments to state and federal laws, changes to rules, audit standards, and other topics that may impact legal compliance for charities. It will also announce benefits provided to charities as a result of changes to state or federal laws.

 

November 2011 -- Last May Governor Snyder signed into law changes to the Michigan Tax Code that eliminate tax credits that donors to community foundations, food banks, homeless shelters and public institutions such as schools and universities. These incentives to give to Michigan charities will end December 31, 2011. For additional discussions of these changes follow these links to Michigan Public Radio and Council of Michigan Foundations.

August 15, 2011 -- Several months ago the Attorney General's Charitable Trust Section launched a new online search page. The new page allows donors and charities to check out the registration status of charities and provides access to financial information for those charities. The search also includes access to the registration status of public safety organizations that solicit donations and professional fundraisers that contract with charities and public safety organizations.

Registered charities should visit the page and locate their information to verify that it is complete and accurate. The Charitable Trust Section wants to be notified if you see any discrepancies.

May 9, 2011 -- The former Michigan Department of Energy, Labor and Economic Growth has been changed to the Michigan Department of Licensing and Regulatory Affairs. While the change took effect April 25, 2011, all links to the department using the old URL continue to work. The Bureau of Commercial Services that houses the Corporations Division remains in the Department of Licensing and Regulatory Affairs, and all links should continue to work.

 

References on Staying Legal MI will be changed in the coming weeks.

 

 April 1, 2011 -- The amendments discussed below in the December 22, 2010 update took effect yesterday, March 31, 2011. The text of the pages on this website have now been updated to refer to "registration" with the Michigan Department of Attorney General, rather than the previous licensing procedure. The threshold for the registration requirement has also increased from $8,000 to $25,000. Please refer to the discussion below for more detail.

December 22, 2010 -- Governor Granholm signed into law amendments to Michigan's Charitable Organizations and Solicitations Act -- the law that requires charities soliciting donations in Michigan to obtain a license from the Michigan Attorney General's Charitable Trust Section. The new Public Act 377 of 2010 will become effective March 30, 2011. Changes to other pages on this website that discuss charitable solicitations will not be made until the law is in effect at the end of March 2011. Here is a brief summary of the changes:

• Raises the threshold for the license requirement from $8,000 in annual charitable contributions to $25,000
• Changes the language of the law to provide for registration, rather than licensing, to clarify that a registration is effective upon filing of all of the required information
• Increases penalties for violations of the public trust through misleading, fraudulent or illegal solicitations within the state of Michigan

For more discussion of the amendments go to the Michigan Legislature website for analyses of Senate Bill 1528.

March 24, 2010 -- MNA this month introduced the newly updated and revised Michigan Nonprofit Management Manual, 5th Edition. This extremely useful tool covers every aspect of nonprofit management and legal compliance, with chapters authored and reviewed by experts in the various areas of management, including planning, evaluation, governance, finance, transparency, and more. The manual is available at MNA's online bookstore at a cost of $75 for MNA members, $95 for nonmembers.

 

March 23, 2010 -- Below is a discussion of the new United States Supreme Court decision that impacts lobbying by corporations.

 

March 22, 2010 -- Below is a discussion of the new filing fees for the IRS Form 1023, with links to the IRS Web site for further information.

 

March 22, 2010 -- Below is a discussion of IRS plans to implement CyberAssistant software to assist organizations in completing the Form 1023.

 

February 16, 2009 -- Below is a discussion of the New Forms Introduced by the Attorney General's Charitable Trust Section for charitable solicitation licenses, charitable trust registration and verification of exemption from either or both of those requirements.

 

 

New Forms Introduced by the Attorney General's Charitable Trust Section

New Item February 16, 2009

The Attorney General's Charitable Trust Section has changed the forms charities will use to apply for a charitable solicitation license or to register as a charitable trust registration. In the past, organizations first filed an initial questionnaire, and the Charitable Trust Section determined if licensing and/or registration would be required. Now, the presumption will be that organizations soliciting charitable donations in Michigan need a charitable solicitation license and organizations holding charitable assets in Michigan must register as charitable trusts. One form will accomplish both the license application and registration.

If an organization wishes to be obtain verification of exemption from the license and/or registration requirement(s), they must submit a Request for Exemption form, along with all requested attachments. For more information go to the Charities Page of the Attorney General's website, or visit either the Public Charity or State Laws pages of the Staying Legal MI website.

 

 

Changes in IRS Rules 

 

New item posted March 22, 2010
Organizations that have had average annual gross receipts of not more than $10,000 during the past four years, or new organizations that anticipate average annual revenues in their first four years of operation will not exceed $10,000, can pay a reduced filing fee of $400 to file their IRS Form 1023 to apply for 501(c)(3) tax exempt status.

Organizations that have had average annual gross receipts of more than $10,000 during their past four years, or new organizations that anticipate average annual gross receipts of more than $10,000 during their first four years, must pay $850 to file the IRS Form 1023.

Filers paying the reduced fee of $400 will be required to sign a certification to be filed with their application verifying that gross receipts are accurately represented on the application.

For more details, go to the IRS Web site.

 

 

Federal Regulations

 

New Item March 23, 2010

United State Supreme Court Citizens United decision -- lobbying by corporations

While the decision issued by the Court in January 2010 changes and opens up news ways that many for-profit and nonprofit corporations can become involved in political campaigns, the prohibitions against direct or indirect involvement in political campaigns remain in place for 501 (c)(3) charitable corporations.

 

For information on allowable lobbying and advocacy activities for charities, go to the Lobbying/Advocacy page of the website.

 

IRS News:

 

Higher fees for IRS Form 1023 filing

As of January 2010, user fees for processing of the Form 1023 increased. Organizations that have had, or will have, gross annual receipts of less than $10,000 over a four-year period must pay a $400 user fee. Organizations that have had, or will have gross annual receipts of $10,000 or more over a four-year period must an $850 user fee. The payment must be submitted with the Form 1023 filing.

 

Fees are subject to readjustment January of each year and are published on the IRS website.

 

IRS Filing for Small charities

The new filing form, the e-Postcard, for small charities is now available through a website provided by Urban Institute. Organizations with a fiscal year that ended December 31, 2007, or any date after that are required to file the e-Postcard if their gross receipts are less than $25,000 during the fiscal year. For more information, go to the IRS website.

 

Electronic Filing

The IRS now has electronic filing available for Form 990, 990-EZ and 990-PF. Some larger charities that have a large number of employees are now required to file electronically. Also Form 8868, Application for Extension of Time to File an Exempt Organization Return, may be filed electronically. To read more and find out about the e-filing process, go to the IRS website.

 

Easier Filing for Form 1023 -- delayed
The IRS had promised introduction of an online CyberAssistant tutorial format program to help organizations complete and file the IRS Form 1023. The IRS, however, has delayed the introduction of this promising new opportunity until 2011 after testing procedures revealed issues that required correctin prior to release. Whn the CyberAssistant is available, those using the online tutorial will qualify for a reduced filing fee. For more information go to the IRS Web site. A good way to stay updated on the introduction of this new opportunity is to subscribe to the IRS Exempt Organizations newsletter.

 

 

 

Current Michigan Attorney General Charitable Trust Section News:

 

Electronic Filing

The Charitable Trust Section now has electronic filing for the following forms:

• Application for License to Solicit Donations (both initial filing and renewals)

• IRS Form 990 and 990-EZ

• Initial Charitable Trust / Charitable Solicitation Questionnaire

• Charitable Trust Registration Statement and Inventory forms (with Initial Charitable Trust / Charitable Solicitation Questionnaire only)

To find out more about the procedures for electronic filing go to the Charities page of the Attorney General's website.