tax exempt organizations


Our Tax Exempt Organizations Practice Group advises charities, foundations, corporate sponsors, and professional fundraisers on matters which affect the nonprofit community.



Practice Group Leader: David G. Samuels


Overview

We are one of the few law Firms with a practice group dedicated to addressing the unique regulatory, economic and legal issues of tax exempt organizations. 

In these times of economic strain, professional advisors who understand the particular challenges confronted by nonprofits can make a big difference to an organization's success.  We recognize that the nonprofit sector encompasses a broad array of providers which require specialized knowledge and focused attention.  Our Tax Exempt Organizations Practice Group represents clients in the areas of education, medical research and scientific advancement, health and mental health, support for the arts, the celebration of history and culture, the elevation of human rights, the enhancement of child development, the advancement of religion, economic development and many other charitable causes ... each in the specialized way that best meets its needs. 

David Samuels, who chairs our Tax Exempt Organizations Practice Group, is a graduate of The Harvard Law School and has eight years of experience working in the New York Attorney General's office as Deputy Chief of the Charities Bureau.  Mr. Samuels was identified by New York Magazine as one of the seven best not-for-profit lawyers in New York City. As with the other practice areas at the Firm, our Tax Exempt Organizations Practice Group has a heavy overlap with our real estate practice. Mr. Samuels was named the Best Lawyers® 2016 Non-Profit / Charities Law "Lawyer of the Year" in New York City. “Lawyer of the Year" recognitions are awarded to individual attorneys with the highest overall peer-feedback for a specific practice area and geographic location. Only one lawyer is recognized as the "Lawyer of the Year" for each specialty and location.

Accordingly, we divide further description of this Practice Group between real estate and non-real estate matters.  

Beyond Real Estate

Our Tax Exempt Organizations Practice Group routinely advises our clients in all areas of nonprofit law, including:

  • Entity formation, including the preparation of all formative documents, bylaws, committee charters and corporate policies
  • Obtaining 501(c)(3) status, including IRS submissions
  • Commercial co-ventures, fiscal sponsorships, corporate sponsorships, licensing and special events
  • Corporate matters, including reviewing and drafting a wide range of contractual agreements, executive compensation, governance, and structuring the formation of public charities, private foundations and limited liability companies
  • Mergers or consolidations
  • Dissolutions and sales of charitable assets (including seeking Attorney General and court approval as required)
  • Tax issues, including unrelated business income tax, intermediate sanctions, and private foundation excise taxes
  • Regulatory compliance work, including charitable solicitation regulation
  • Dispute resolution
  • Federal and state litigation, including defending clients who are investigated or sued by government regulators (including, in particular, the New York State Attorney General)
  • Compliance with new reporting responsibilities, such as Form 990
  • Reviewing investment policies, including compliance with the Prudent Investment Act
  • Lifting restrictions on assets
  • Modifying real estate holdings and leases
  • Workforce reduction and/or hiring considerations
  • Fundraising terms and agreements
Real Estate Matters

There are numerous real estate industry players who are used to becoming involved in transactions with other non-tax-exempt parties and, in that regard, the transaction is relatively straightforward (although admittedly sometimes complex) – one negotiates documents, signs them up and proceeds forward.  

However, this can be an invitation for disaster if you are dealing with a church, a synagogue, another religious organization, or certain other types of charitable organizations.  For example:

  • You might require New York Attorney General and/or Court approval – this has to be built into the transaction and requires a lawyer who is well-versed in the attendant risks and issues;
  • You must consider whether the transaction is properly authorized and, in that regard, understand the nature of the entity with which you are doing business.
  • You might need to obtain an independent appraisal to assure that adequate consideration is being received.

Duval & Stachenfeld LLP is well-known throughout the community of tax exempt organizations as one of only a handful of law Firms with a practice which advises on both routine and complex matters arising in the real estate arena.  Due to the many overlaps with the rest of the Firm’s Pure Play in Real Estate, the Tax Exempt Organizations Practice Group has developed a real estate focus to assist its clients.

The following are representative types of matters that we handle for such organizations in the real estate space:

  • Leasing and sub-leasing
  • Acquisitions and dispositions 
  • Sales, leases, exchanges, and mortgages regarding real property of religious corporations (generally requiring AG and Court Approval)
  • Sales, leases, exchanges, and mortgages regarding real property of non-religious corporations
  • Modifying real estate holdings and leases
  • Licensing agreements involving use of space owned by tax-exempt organizations

​Real property tax exemptions (applications and litigation of disputes)


Charitable Bequest Practice

Our Tax Exempt Organizations Practice Group has particular expertise dealing with disputed bequests (whether testamentary or inter vivos) to universities and other not-for-profit institutions.  Our attorneys possess longstanding experience navigating New York’s Surrogate’s Court and handling the sensitive issues that surround a contested charitable bequest.  Specifically, the Charitable Bequest team has represented clients in:

  • Defending the validity of gift instruments, including litigating the testamentary capacity of the donor and advocating for (or against) the validity of competing instruments;
  • Resolving disputes involving bequests among family members, or between family members and the institution;
  • Litigating the proper construction of an ambiguous will; and
  • Contesting putative restrictions placed on gifts, and the extent to which such restrictions might limit the institution’s use of the funds.

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