Non Prof Final X answer matrix 120808

Non Prof Final X answer matrix 120808 - Law of Non profit...

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Law of Non profit Corporations Fall 2008 (October 30, 2008) Prof Jesse J. Avila Final Examination Question 1 Answer Matrix Question 1. A. What is your advice to Believer’s Board? What is your advice to Castro? Advice to Believer’s Board Non profit tax exempt status as a Church A key question is whether Believers qualifies as a church. Answering that question determines other related issues, such as whether individual donations to it are deductible from federal income tax. Churches are customarily exempt from taxation, but exemption is not guaranteed unless the Church first obtains an IRS/ Treasury determination letter (p 51). Courts hesitate to apply too rigid a test to churches, due to 1 st Amendment considerations. Most courts would probably apply the Treasury 14 factors addressed in Revenue Ruling 59-129. Believers will have problems with that test. For example, it has no regular meeting place; no regular or stable congregation; very short history. Its continually- revealed purposes shows that it has no stable, coherent belief: at best, its purposes are in formation or infancy. The cryptic philosophical summary is ambiguous for establishing a religious purpose. There is no adherence to a supreme being (which is not required but would assist Believer’s case). Nor is the modification to the articles purpose statement a creed or summary of belief. Reference to the analyses in Living Faith, p 216 and Ethical Society might be helpful. PAC possibility/ 501 (h) election / 527 Organization Substantial lobbying (but not campaigning) would not be an issue if Believers had remained a public benefit corporation, organized a 501 c 4 (social welfare) non profit organization, then set up a political action committee. Discuss whether Believers, as a 501c(3) (but not as a church), could have elected under 501(h) to spend up to $1 million in lobbying expenses. Could it qualify as a 527 organization? Conversion from public benefit corporation to church In hindsight, the conversion from public benefit to corporation to church was risky for Believers. A big question is, how did Castro’s former attorney amend the purpose clause? We’re never told exactly how. So we can’t do a really very good organizational analysis of its effect.
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The operational activity in support of a bona fide church is skimpy. Basically, a group or groups of people meet in widely diverse and distanced areas of California to plan political action according to an agenda set by revelations from a “Cosmic Oneness.” It might be useful to discuss Christian Echoes case, p 266. Though it is a stretch to call it a church, Believers might still have qualified as a “religious” organization, since the religious organization concept is broader than that of “church.” Lobbying and campaigning Operationally, the references to raising funds and holding workshops are meant to trigger mention of a possible commercial purpose (and maybe destination of income)—but that is not a serious issue. The
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This note was uploaded on 10/24/2010 for the course PR 123 taught by Professor Gramer during the Spring '06 term at Loyola Law School Los Angeles.

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Non Prof Final X answer matrix 120808 - Law of Non profit...

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