Tax Exempt & State Non-Profit

Our attorneys focus on the special needs of tax-exempt organizations, helping to get new organizations off to a healthy start and staying with them as they grow and develop. Our clients include some of the largest private foundations, associations, and healthcare and educational institutions in Texas. We also represent smaller organizations, individuals, public charities, religious organizations, and hospitals, as well as individuals looking to accomplish philanthropic goals.

In the initial stages of formation, we help our clients examine the organization’s likely sources of funding, type of governance, and potential activities in order to determine the most appropriate tax-exempt structure. We also work with individuals, taking time to thoroughly understand their philanthropic goals and then helping find the best way to achieve those goals, whether it be through direct giving, a donor-advised fund, creation of a private foundation, or other tax-efficient means. Although Texas has no state income tax, certain organizations may qualify for property tax exemption under very specific rules. We seek to coordinate federal and state activities to secure the most comprehensive exemption available to our clients.

Practice Category

As exempt organizations grow and change, numerous challenges can arise. We help our clients address these challenges by providing advice on ongoing issues and helping to ensure that changes in the governance, activities or constitution of an organization are handled in a manner that will not adversely affect its status. Our extensive experience enables us to provide a variety of services to exempt organizations, including:

  • Addressing and resolving issues related to application of unrelated business income tax to tax-exempt organizations
  • Structuring and analyzing joint ventures between nonprofit and for-profit entities
  • Addressing and resolving issues related to prohibited private inurement and private benefit
  • Preparing and updating governing documents of all tax-exempt entities, including corporations, associations and trusts
  • Preparing and filing exemption applications, Forms 1023 or 1024, with the Internal Revenue Service
  • Addressing issues related to board makeup, structure and operation; facilitating smooth board and corporate operation
  • Assisting in maintaining tax-exempt status, including representing tax-exempt entities before the IRS and other regulatory agencies
  • Assisting in issuing tax-exempt bonds; counseling and assisting in implementation of other financing options
  • Assisting private foundations with termination of public charity status

We have expertise in the needs of exempt healthcare organizations including hospitals, hospital groups, and medical foundations. Working closely with our Healthcare practice group, we prepare applications for Section 501(c)(3) status; and provide counseling on maintaining tax-exempt status and the risks presented by various transactions; complying with IRS regulations; completing the Form 990; and addressing private inurement, private benefit and unrelated business income and other tax exempt issues. Where mergers and reorganizations are involved, we ensure that tax exemption requirements are taken into consideration.