Nonprofit organizations are under the microscope

Nonprofit organizations are under the microscope

On Behalf of | Jan 9, 2023 | Non-Profit Organizations

There seemed to be a time when nonprofit organizations were above reproach. However, there is a major scandal that has been going on regarding nonprofit groups that are misusing federal relief funds connected to the recent global health emergency. With this latest trend seemingly against nonprofit groups, the leaders of such organizations believe that this will set a precedent for tougher times for those groups in 2023.

The nonprofit leaders feel that their organizations will see more regulations and that the enforcement will be stricter than it has been in the past. They also predict that they will see fewer donations coming in. Some speculate that a major reason for these changes is the vast amount of fraudulent activities that were committed in the recent past.

How do I stay compliant if I work for a nonprofit group?

There are several different ways that you can remain compliant when it comes to your nonprofit group, including the following. You can:

  • Apply for state tax exemption: After you receive a 501(c) letter from the IRS, your nonprofit group will become exempt from paying corporate income tax.
  • File annual federal returns for your tax-exempt organization: This is a standard requirement for most tax-exempt nonprofit organizations. The organization will need to declare the entire amount of money that the organization received from every source during its accounting period for that year. The organization must not deduct any expenses or costs.
  • Maintain a registered agent: Every nonprofit in Illinois must have a registered agent with an office address in the state of Illinois.
  • File reports periodically: Every nonprofit organization must file an annual report. If you don’t file those reports regularly, your organization may be in danger of being terminated.
  • Apply for licenses and permits: Your organization may not need a general business license but your city or county may have its own list of requirements. You will need to check with the local government.
  • Apply for charitable registration: If you already applied for that in the past, you should renew your registration
  • Register with the Illinois Department of Employment Security: If your nonprofit organization has employees, it is a requirement that you register with the Illinois Department of Employment Security.

Solid advice from a knowledgeable Illinois attorney

If you are in the nonprofit environment, you will most likely benefit from the expertise of an experienced Illinois attorney who can help you to maintain compliance with regulations for your nonprofit organization. The attorney can also help you to avoid getting into disputes that can be avoided and to resolve disputes that are unfortunately unavoidable.