About Doug Mentes, Esq.

Doug Mentes, Esq. Articles written 126

Douglas Mentes is an alum of Drake University with a degree in journalism, who has covered news in Washington, D.C., Minneapolis and Salt Lake City. He has a law degree from William Mitchell College of Law and ran his own law firm for more than 10 years in St. Paul, Minnesota, earning designation as a Super Lawyers Rising Star. He practiced in the areas of family law, real estate and probate, handling several successful appeals. He currently covers bankruptcy law for Thomson Reuters.

Articles written by Doug Mentes, Esq.

How Do I Maintain Tax-Exempt Status?

For Georgia’s nonprofits, compliance is simple, but penalties are significant

Obtaining tax-exempt status for nonprofit organizations can be a lengthy and time-intensive process. And maintaining that status can also be a lot of work, as the nonprofit must, at all times, continue to meet its federal statutory obligations. This includes avoidance of: Serving private interests instead of its exempt purpose Income or assets benefiting organization insiders Excessive lobbying Political campaigning Earning too much unrelated business income from nonexempt activities Nonprofits …

When Is a Nonprofit Lobbying?

In California, excessive lobbying could lead to loss of tax-exempt status

It’s perfectly legal for section 501(c)(3) organizations to lobby. The allowable amount of that lobbying will vary, however, depending on whether a nonprofit has elected under section 501(h) to use the expenditure test or remain with the default substantial part test. Organizations can, though, get more bang for their buck by understanding how the Internal Revenue Service (IRS) distinguishes lobbying from activities that are not grassroots lobbying, measuring lobbying or direct …

Can Nonprofits Endorse Politicians in California?

501(c)(3) organizations can’t, but there is room for election involvement

Nonprofit organizations are often concerned about matters of public policy and advocacy, since the nonprofit may be directly involved in the policy issues. Having informed nonprofit entities involved in policy discussions is often a benefit to the public, but before straying into public policy, 501(c)(3) organizations must understand the Internal Revenue Service (IRS) rules—one of the most basic being that the activities of endorsing politicians and lobbying are distinct. Lobbying activities …

Why Choose to Form Your Business as an LLC?

It’s the best choice for some New Jersey businesses, but owners must compare all options

In the array of business entity choices, the Limited Liability Company (LLC) comes right in the middle. It offers some of the benefits of incorporation (C or S corporations) and some of the benefits of sole proprietorships and partnerships. There are some drawbacks but perhaps the biggest benefit of the LLC business structure, is the flexibility it offers its owners. It provides the owners discretion over taxation and discretion over how formal, or informal, the owners wish to operate. …

How Much Can Nonprofit Founders Pay Themselves?

Donors serve as the ultimate check on Pennsylvania nonprofits

For nonprofit visionaries that aspire to dedicate themselves full time to their cause, they may be asking themselves, “How much can I pay myself?” The law provides little guidance, only requiring that compensation be reasonable. But, even if your planned compensation is a reasonable salary under the law, you may face a more subjective check: the opinions of your nonprofit’s potential donors. How Much Is Too Much for Nonprofit Salaries? Noel Fleming has practiced law in Pennsylvania for …

How Are Nonprofit Compensation Practices Enforced?

Understanding the scrutiny that your nonprofit could face from the IRS

Large-scale audits and lawsuits against nonprofits over executive compensation packages and misuse of funds garner a lot of media attention. Perhaps these events lead the public to believe enforcement is a risk for nonprofits they donate to. However, the trends show that nonprofits are experiencing less enforcement of issues related to excessive compensation of chief executive officers or nonprofit board members. Who Enforces Nonprofit Compensation Requirements? “Nonprofit organizations are …

Determining Reasonable Compensation for a Nonprofit Job

The IRS guidelines for organizations in Pennsylvania

Compensation for higher-level nonprofit employees is often an issue of concern for nonprofits. No one wants to see a nonprofit—many times organized as a public charity—take advantage of their donors and tax-exempt status. They don’t want to give the appearance it’s over-compensating its nonprofit executives. That may lead to donor complaints and possibly a decline in donations or funding. How can the nonprofit properly compensate its employees and avoid appearances of improper conduct? …

Should I Choose an S or C Corporation for My Small Business?

It’s a critical decision for New Jersey startup owners

Once a small business owner decides their business should incorporate, the decision-making is not complete. Included in that decision is which form of corporation and business structure should the owner choose. S corp vs. C corp? By default, any business startup will form as a C Corporation under IRS rules. The business must designate to form as a subchapter S corporation by filing IRS Form 2553 – Election by a Small Business Corporation. The entity form is called an S corporation because the …

Should My Small Business Incorporate?

In Ohio, this will depend on a few factors

Not all small businesses—defined as employing 500 or fewer employees—incorporate. Many remain sole proprietorships, which don’t require registration with the state of Ohio. In fact, the U.S. Small Business Administration reports that small businesses in the U.S. make up 99.9 percent of all businesses, and 80 percent of those small businesses have no employees. And for those businesses that have no employees, 86 percent are sole proprietorships. Why Incorporate? The most widely agreed-to …

Can a Georgia Nonprofit Increase Its Lobbying?

Taking the 501(h) election typically gives nonprofits more opportunity to lobby

That still allows for some lobbying by the organization but the IRS leaves many nonprofits in limbo with no clear definition of what constitutes a substantial part of their overall activities. If the organization slips up and is found to have conducted excessive lobbying activity, it can lose its tax-exempt status, resulting in all income being subject to tax. The 501(h) Election Instead of facing the uncertainty of the substantial activity test, nonprofits—other than private foundations and …

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