1. TAX EXEMPTION AND RELATED ISSUES FOR THE NOT FOR PROFIT (NFP) CORPORATION REUBEN S. SEGURITAN 7 Penn Plaza, Suite 222 New York, NY 10001 Tel. No. (212) 695-5281; Fax No. (212) 563-2664 Email: seguritanlaw@yahoo.comseguritanlaw@yahoo.com Website: www.seguritan.comwww.seguritan.com

2. SETTING UP THE NFP – Incorporation certificate of authority if NFP is foreign corporation doing business in NYS – 501(c)(3) tax exempt status (Form 1023) 5 year advance ruling period to maintain public charity status – NYS income tax exemption (CT-247) – NYS sales tax exemption (ST-119.2) – Registration with NYS Attorney General (CHAR 410)

3. REGISTRATION WITH NYS ATTORNEY GENERAL – Types of Registration Article 7A to solicit contribution EPTL for incorporated or doing business Dual for combined Article 7A and EPTL – When to Register Article 7 A – 30 days prior to solicitation EPTL – within 6 months of activity Dual – whichever is earlier

4. – Attachments Certificate of Incorporation, By-laws, IRS Form 1023 and IRS tax exemption letter – Penalties for failure to register Article 7A - $1,000 per violation and up to $100 per day for willful non-compliance EPTL - $10 per day up to $1,000 for each failure Dual – combined penalties

5. – Unified registration statement (multi-state) in lieu of Art. 7A only used by 39 states – Exemption See CHAR 410 instructions File CHAR 410 with Schedule E to confirm exemption

6. ANNUAL FILING REQUIREMENTS – Internal Revenue Service Form 990 – if gross receipts is $100,000 or more Form 990EZ – if gross receipts more than $25,000 but less than $100,000 and total assets less than $250,000

7. Form 990N – if gross receipts less than $25,000 Form 990T – if unrelated business income is $1,000 or more Employment tax return Enforcement tool to find out income and expenses, assets, programs, excess benefit transactions, self-dealing and lobbying activities

8. Penalties revocation of tax exempt status if Form 990, 990EZ or 990N not filed for 3 consecutive years $20 per day until filed up to $10,000; $100 penalty up to $50,000 if gross receipts over $1 million no penalty for late filing of 990N When to file 15 th day of the 5 th month

9. – NYS Attorney General (CHAR 500) Form CHAR 500 for all registrants with a copy of Form 990, 990 EZ and 990T Additional attachments Article 7A and dual – accountant’s audit and financial statement if revenue over $250,000; accountant’s review and financial statements if revenue over $100,000 to $250,000

10. When to file Article 7A and dual – 4 ½ months after end of fiscal year EPTL – 6 months after end of fiscal year Exemption Article 7A and dual – contribution not exceeding $25,000 and did not use professional fundraiser EPTL – gross receipts did not exceed $25,000 and assets did not exceed $25,000 Penalty – same as in CHAR 410

11. ORGANIZATION AND GOVERNANCE – Bylaws – Board of directors – Legal duties of directors Duty of care Duty of loyalty Duty of obedience

12. – Enforcement of director’s duties by Attorney General by another director by 5% of members – Personal liability of directors accidents and employment volunteers not liable unless with gross negligence or intent to harm

13. – Corporate protection liability insurance indemnification of officers, directors and employees placing risks on contractors

14. OTHER COMPLIANCE ISSUES – Prohibited activities political campaigns substantial lobbying private benefit or inurement – Record Keeping documentation of income and expenses organizational documents retention period

15. – Disclosure annual returns tax exempt documents – Fundraising written acknowledgement for contribution of $250 or more quid pro quo contribution of $75 or more use of professional fundraisers

16. raffles license required if net proceeds is $30,000 or more verified statement if net proceeds is $5,000 or more restrictions who, where, when to sell separate bank accounts final accounting or verified statement

17. – Dissolution board resolution membership approval asset distribution