Director Liability

The Internal Revenue Code provides that Directors of certain 501(c)(3) Organizations can be held personally liable for some rather sizeable excise taxes if the Organization makes "improper" expenditures, such as for lobbying or political activities.

Must Directors be US Citizens?

This issue is usually not raised during the 1023 application review. Other than non-relatedness, there are very few requirements that the IRS imposes on directors. As long as the director is qualified under state law and capable of fulfilling his/her fiduciary duties, citizenship and residency should not raise an issue for the IRS. There is not a question on the 1023 that would require citizenship/residency of a director be disclosed. Nevertheless, if the organization has a connection with a non-US entity the IRS examiner frequently questions citizenship of  the Directors.

Non-Profit Corporate Governance

The IRS is increasing Audits of Non-Profit Organizations! A major section of the audit is corporate governance and record keeping. ...More

Ronald J. Cappuccio, J.D., LL.M.(Tax)
Counsellor at Law
1800 Chapel Avenue West
Suite 128
Cherry Hill, NJ 08002
856-665-2121