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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 teams with volunteer staff and limited budgets. The common characteristic of all is that none of these entities have owners. Rather, they are run by boards, trustees, or members for one or more of the purposes allowed under state not for profit laws.…
You Could Lose Your 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or stops operations that are exempt from taxation.[ii] 378 entity 501(c)(3) exemptions are listed by the IRS as having been revoked through formal hearings since 2005, and many more of these and other types of exempt entities have had their exemptions automatically revoked for failure to file required tax forms.[iii] If your organization wants to become and remain exempt, it…
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or stops operations that are exempt from taxation.[ii] 378 entity 501(c)(3) exemptions are listed by the IRS as having been revoked through formal hearings since 2005, and many more of these and other types of exempt entities have had their exemptions automatically revoked for failure to file required tax forms.[iii] If your organization wants to become and remain exempt, it needs to be ready for a denial of…
The Illinois Policy Institute has examined IRS data, and thinks this is a problem. Texas and Florida appear to be prime destinations, see https://www.illinoispolicy.org/reports/irs-data-show-continuing-illinois-wealth-flight/ The real problem appears, however,  to be attraction of new residents, since an aging population moving to warmer climates may have nothing to do with tax burdens, see https://www.chicagotribune.com/news/ct-census-illinois-population-trend-leavers-met-20190925-55e2uha64rardg7pa5734u6twu-story.html Past increases in income taxes have, somewhat unexpectedly, been associated with increases in high net worth tax filers in Illinois. It is lower income residents who are moving out for other opportunities, and not finding new jobs here. Restrictions on immigration probably have an effect on that…
                          The Illinois Supreme Court’s decision in Oswald v. Hamer (2018 IL 122203, 115 N.E.3d 181, 425 Ill.Dec. 626 (Ill., September 20, 2018)) upheld a General Assembly action changing the statute which was interpreted to deny a charitable use exemption for a hospital in the Provena Covenant Medical Center v. Department of Revenue, 236 Ill. 2d 368, 388, 339 Ill.Dec. 10, 925 N.E.2d 1131 (2010). (Amendment is 35 ILCS 200/15-86.) The Oswald court’s decision noted that it was upholding the amending statute as constitutional on its face, so…
Top Ten Church, Charity, and School Illinois Property Tax Exemption Mistakes By: William A. Price, www.growthlaw.com Don’t apply for property tax relief before you get your federal exemption letter. You have the burden of proof of exemption, and though the IRS “Good Housekeeping Seal Of Approval” is not enough to prove state qualification, it is a required part of the application packet. Don’t apply if your zoning or building code compliance is wrong. Local taxing bodies get notice of property tax exemption requests, and if your site is not correctly zoned, you may have local use prohibitions, not just property…
The practice of law has changed, starting in London, and moving fast around the world. The four biggest law firms are the “Final Four” accounting firms, with law licenses in many countries and over 10,000 lawyer employees collectively. British solicitors (their term for non-trial lawyers, where trial lawyers are barristers) firms like Eversheds, Allen & OIvery, Clifford Chance, and Wilmer Hale have founded “Alternative Legal Services” firms as a controlled part of their operations. Other ALS firms like United Lex have passed the “Unicorn” level of $1 billion per year in sales. Thompson Reuters, itself a major provider of alternative…
  Stock option plans and other stock plans let you compensate your employees or independent contractors for improving the value of the company without making them immediately liable for taxes on the value of their stock or options. There are several variations. These include:   Classic stock options: Employee or Contractor purchase rights, exercisable immediately or after a vesting period. Company gets deduction and employee gets taxable income as capital gain when vests. If related persons (10% or more of company owned), then “Incentive Stock Options”, exercise price must be 110% or more of stock fair market value at time…
The Illinois General Assembly passed, and Governor Pritzker is expected to sign SB 75. This legislation: a. Increases information exchange between state departments concerning candidates for state licenses or those holding same whose licenses may be refused, revoked, or suspended as a result of commission of a civil rights violation. b. Specifies that a “hostile work environment” is not limited to a physical location where an employee is assigned to perform duties. c. Adds “actual or perceived” to  the protected categories “race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy,…
The General Assembly repealed the 1/10 of 1% capital assets of business corporations franchise tax, and the Governor has signed the repeal, P.A. 101-0009. The tax disappears for amounts due below $30 in 2020, below $1,000 in 2021, $10,000 in 2022, $100,000 in 2023, and all amounts in 2024. The tax comes back in 2026 unless the repeal is renewed. The post Illinois General Assembly Repealed The Franchise Tax appeared first on GrowthLaw.…
When Roman tenants stumbled back into the lobby of their apartment buildings after a night of drinking, they probably threw a few coins into a clay pot by the stairway. If they died of drink (or the lead lined pipes, or the diseases that city life still features), the coins in the pot would pay for their burial — or that of anyone else in the building who died. Such owners of a common fund were “parcenarii” — partners, and the partnership is the oldest form of business entity that involves more than one person or family. Creation of a…