Tuesday, April 25, 2017

Non-Profit Series: 9. Additional Applications and Accounts for Non-Profits

Written by Sagan L. Carman-Downer

Once you have made the decision to start a non-profit organization and completed the steps to officially form an entity (filing Articles of Incorporation, for example), there are additional steps that may be necessary. This article will explain some of those additional steps.

Apply for Federal Employer Identification Number
One of the next steps will be applying for an Employer Identification Number (EIN or federal tax id). This is a unique number assigned to the organization by the IRS. An EIN will be used for things like opening bank accounts and identifying the organization for tax purposes. The organization will complete a form called an SS-4, which can now be completed online through the IRS website. If completed online, the organization can receive the EIN immediately after the application is submitted.

Set Up EFTPS Account
Your organization may also need to set up an account with the Electronic Federal Tax Payment System. This is a system for the organization to deposit tax money withheld from any employees the organization may have. This will include money withheld from employees’ paychecks for FICA taxes and income taxes. The organization should automatically receive instructions in the mail for setting up this account after they have received their EIN.

Apply for State Identification Number
Even if you have received an EIN through the IRS, you may still be required to obtain an additional tax identification number through the state where your organization is located. Many states require the organization to apply for this additional identification number for state tax purposes. This is likely necessary if you will have employees that the organization will be required to withhold state income tax for, or if you will be required to collect a sales tax or other state tax. This can typically be done by submitting an application for an identification number through the state’s department of revenue.

Additional State Requirements
There may be additional requirements that vary by state. For example, in Nebraska, the organization may have to purchase a workers’ compensation insurance policy. This is an insurance policy that provides benefits to employees who are injured during their employment. Unless the organization meets certain exceptions, they may have to provide this type of insurance for its employees or officers. Another example in Nebraska, is the requirement that the organization complete an application through the Department of Labor for unemployment insurance. If the organization will have employees, they may be required to complete this to provide unemployment benefits to employees.


This list provides information on some of the next steps that the non-profit organization will need to take once they have officially formed an entity. There may be additional requirements depending on the state in which the organization is located, and the type and size of the organization. To ensure that you have completed the necessary steps, submitted the necessary applications, and created the necessary accounts, it is best to speak with an attorney in your state.

Wednesday, April 12, 2017

Non-Profit Series: 8. Tax-deductible Contributions

Written by Sagan L. Carman-Downer

The previous article in this series explained that one of the benefits of a non-profit organization obtaining 501(c)(3) status, is that contributions made by others are tax deductible. This means that the person or business that donates (the donor), can deduct that amount from their taxable income, which may help lower their tax burden. The non-profit that is receiving the donation (the donee), and the donor, must comply with certain federal rules regarding disclosures and recordkeeping. This article will explain some of those requirements for cash contributions. It’s important to note that the requirements discussed in this article are for cash contributions, and will differ if the contribution is in the form of goods or services.

Requirements of Donor
To take the tax deduction, the donor is required to keep a record of the contribution. For a cash contributions (which includes cash, checks, electronics funds transfers, debit cards, credit cards, and payroll deductions), the donor must keep one of the following: a bank record (canceled check, bank statement or credit card statement); a receipt from the donee; or a payroll deduction record. Simply keeping track in a check register will not be enough, one of the above records must be retained in order to deduct the contribution from the donor’s taxable income.

If the donor makes a cash contribution of $250 or more, they must also get an acknowledgment from the donee. This acknowledgment is explained in more detail below.

Requirements of Donee
If the donee receives a contribution of more than $75 from one individual or business, they must provide a disclosure statement to the donor. The disclosure must be written, must note the value of the contribution, and must inform the donee that the contribution is tax-deductible. If the donee does not provide this disclosure statement, the IRS may impose a fine on them.

As mentioned above, if the donee receives a cash contribution of $250 or more, they must provide an acknowledgment to the donor. The acknowledgment must meet the following requirements:

·         It must be written;
·         It must include the amount of cash contributed;
·         It must indicate whether the donor received goods or services for the contribution (including the value of the goods or services); and
·         It must be received by the donee before their tax return for that year is due.


This article provides a general guideline of the disclosure and record keeping requirements for cash contributions to non-profit organizations that have qualified for tax-exempt status under 501(c)(3). There may be additional requirements for larger cash contributions, and the requirements for contributions of goods or services will differ significantly. There are also additional rules on whether the donor can deduct these contributions, and if they can, how much can be deducted. The extent to which contribution is deductible will depend on each individual’s circumstances, so it would be best to speak with an attorney or other tax professional to discuss your specific situation.

Thursday, April 6, 2017

Meet the Staff (Part 2)

At Fye Law Office, we have some great staff. And we want our clients, potential clients, and friends to have the opportunity to learn a little bit about them, and to hear some advice and thoughts from them. Today, you get to meet Kristi, one of the legal secretaries in our office.

Tell us a little bit about yourself.
    My husband’s name is Brad and he works for KAAPA Ethanol at the Minden location.  I have 2 children, Amie and Spencer.  Amie is married to Kyle and has 4 children, JJ, Quincy, Halle, and Maddex.  She is a para at the Holdrege Elementary School, and Kyle works for Husker Irrigation.  Spencer is a Program Director for the YMCA at an elementary and a middle school in Lincoln.  I have 3 step-children, Chelsea, who is the manager of a Caribou Coffee in Omaha, Grant, who is in the uniformed division of the Secret Service protecting Embassy Row in Washington D.C. and is getting married this summer, and Bryce who is an assistant manager of a Hy-Vee in Lincoln.   I live on a farm near Axtell, but I am originally from the Holdrege area.

How long have you worked for Fye Law Office?
     A year and 5 months.

What is your work experience/education/training prior to coming to work for Fye Law Office?
     I worked for several years as a bookkeeper for a couple of local farmers and then took a position at CPI at their Funk location as a grain merchandiser and scale operator for 4 years before deciding to try something new and went to work for a friend of mine at her family’s car dealership in Holdrege.  When the dealership sold, the opportunity to work for Fye Law Office was available and I decided to yet again try something new!  I had absolutely no law background and Tana took a chance with me!

What advice do you have to potential clients who are meeting with an attorney for the first time?
     Be as upfront and honest as you can. Attorneys can only deal with the information they are given and it is better for them to find out right away then to have something pop-up in court and not be prepared to deal with the information.

 What advice do you have to clients in working more effectively with their attorneys?
     A couple of the main things would be to make sure your attorney has an updated address and phone number and if possible set up your voicemail so messages can be left.  Another thing would be to not wait until the day or two before court to try and talk to your attorney.  Their schedules fill rather quickly.

Do you have any memorable experiences since working at Fye Law Office that you'd like to share?
     Without getting into much detail, I’ve had a client tell me they were going to sue me, which scared the crap out of me!!  Other than that, probably just things that clients seem to think they need to share with us!

What do you like about working in a law office?
    We have such a variety of cases that we work with and some of them can be very interesting.  Our office is pretty laid back and we all get along so well!

What is your favorite type of case or matter to work on? Why?
    I haven’t worked on many, but probably the adoptions.  It’s just so rewarding to see these kids adopted by loving families and to finally have some stability in their lives.


Thanks to Kristi for sharing a little bit about herself, as well as her thoughts with all of you.

Wednesday, March 22, 2017

We're Hiring!

Fye Law Office seeks candidates for an Associate Attorney position. Applicants with all levels of experience are encouraged to apply. A successful candidate will have an interest in family law, juvenile law, estate planning/probate. Interest in other areas of law is also welcome. Travel to counties in South Central NE should be expected. Applicants must either be admitted to practice law in the State of Nebraska or eligible to apply for admission.

A cover letter, resume, and references may be submitted to: Tana Fye, Fye Law Office, 713 Fourth Avenue, Holdrege, NE 68949, or fyelaw@gmail.com.

Tuesday, March 14, 2017

Non-Profit Series: 6. What is a 501(c)(3)?

Written by Sagan L. Carman-Downer

The term 501(c)(3) is commonly used to refer to a non-profit organization. But what, exactly, is a 501(c)(3)? This goal of this post is to explain what this term means, and what types of organizations have 501(c)(3) status.

501(c)(3) is not actually a term that describes an entity itself, but instead describes its status (a non-profit corporation can’t technically BE a 501(c)(3), but it can have 501(c)(3) status). The term 501(c)(3) refers to the provision in the United States Code (federal law) that grants certain entities an exemption from paying federal income tax. Section 501(c)(3) is a specific part of Section 501. Section 501, appropriately captioned “Exemption from tax on corporations, certain trusts, etc.,” provides, with detail, what entities are exempt from paying federal income tax. Here is a link to a website that displays the actual language of Section 501 if you are interested in reading it https://www.law.cornell.edu/uscode/text/26/501.

Section 501, as a whole, includes the provisions allowing the exemption. The wording of the section is broken down into subsections, paragraphs, subparagraphs, etc. In the term 501(c)(3), 501 is the section, (c) is the subsection, and (3) is the paragraph. Subsection (c) provides a specific list of what entities are allowed the exemption, each one explained in a separate paragraph. There are 29 categories of entities (and thus 29 paragraphs) listed under Subsection (c) that are allowed the exemption; Paragraph (3) is just one of those 29.

Although there are 29 categories, many non-profit organizations fall under the category in Paragraph 501(c)(3), which provides that the following entities are exempt, “Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes…” The explanation of entities included in this paragraph continues, but many non-profit corporations fall under the “charitable” portion of this paragraph. Thus, if you are a charitable non-profit corporation, you are exempt from having to pay federal income tax pursuant to paragraph 501(c)(3).

Simply stating that a non-profit corporation’s activities are charitable, though, isn’t enough to qualify for this tax exemption. To be exempt under this provision, your activities must meet the federal government’s definition of “charitable.” To learn about what activities are considered “charitable” check back for the next article in this series.

Thursday, March 9, 2017

Meet the Staff (Part 1)

At Fye Law Office, we have some great staff. And we want our clients, potential clients, and friends to have the opportunity to learn a little bit about them, and to hear some advice and thoughts from them. Today, you get to meet Destinee, one of the legal secretaries in our office.

How long have you worked for Fye Law Office?
     Started in October 2015

What is your work experience/education/training prior to coming to work for Fye Law Office?
     I worked for Lincoln County Attorney's office for 2.5 years while completing my AAS in business degree. I then moved to Holdrege. I worked as an office manager for 4 years before taking a job with Tri-Basin Natural Resource District as a secretary then moving into a public education position. I worked there for 4.5 years before starting with Fye Law Office.

What advice do you have to potential clients who are meeting with an attorney for the first time?
     Be as upfront and honest as you can. Attorneys can only deal with the information they are given and it is better for them to find out right away then to have something pop-up in court and not be prepared to deal with the information.

 What advice do you have to clients in working more effectively with their attorneys?
     Keep them up-to-date with any information that may change. It is hard to get a hold of clients when addresses or phone numbers change and we do not know about it. Also, remember that you are not their only client. They are good which keeps them busy.

Do you have any memorable experiences since working at Fye Law Office that you'd like to share?
      It is amazing how open some people are about what is going on. It is also interesting some of the stories the clients can come up with. We have definitely heard some good ones.

What do you like about working in a law office?
    I love how everyday is a different day. Each case is different. It is not the same thing day after day.

What is your favorite type of case or matter to work on? Why?
    I really love doing the adoptions. It is great knowing that a child is finding a forever home. Children need that acceptance it's great to see that happen.


Thanks to Destinee for sharing a little bit about herself, as well as her thoughts with all of you.

Wednesday, March 1, 2017

Non-profit Series: 5. What Happens at Meetings?

Written by Sagan L. Carman-Downer

There are a few different types of meetings that can be held by a nonprofit corporation. Some meetings are required under state law, and others can be held at the discretion or need of the corporation.

The first meeting that will be held will be an organizational meeting. This meeting is typically held after the articles of incorporation are signed and filed with the State. This meeting is held by the initial directors if they are named in the articles of incorporation, or by the individuals that started the corporation if there were no directors named in the articles of incorporation. The purpose of this meeting is to elect directors (if there are none yet), appoint officers and adopt bylaw. Other matters can be addressed at the meeting as necessary.

Corporations are typically also required to have annual meetings. The time and place of these regular annual meetings should be stated in the bylaws. The directors, officers and members are all invited to attend the annual meeting. At this meeting, the president and treasurer will report on the activities of the corporation and the financial condition of the corporation. Other matters that will usually be addressed include re-electing directors and officers if their term has expired (the term of directors and officers should be set in the articles of incorporation or bylaws). Past and future activities of the corporation will also be discussed at these meetings, and decisions can be made about what activities or transactions the corporation will pursue. What actions the corporation takes will be determined by taking a vote of the directors or members. Whether the directors or members are authorized to vote will depend on the proposed action and any provisions included in the articles of incorporation or bylaws specifying voting authority. For example, state law may require that some actions be authorized a two-thirds majority vote in favor by the directors, or the bylaws may provide that certain actions can be authorized by a 51% vote in favor by the members.

Additional meetings, usually called special meetings, can also be conducted in between annual meetings. These meetings are usually held when the corporation needs to make decisions about whether to engage in activities that need to be addressed before the next scheduled annual meeting. To hold special meetings, there must be proper notice provided to those that are allowed to attend. This notice must include the purpose of the meeting (what will be discussed), and the time and place of the meeting. There are usually specific requirements regarding how far in advance of the meeting notice must be provided. This will depend on state law, so it is important to make sure you check your state’s requirements to make sure you provide adequate notice.


Meetings are where individuals involved in non-profit corporations make decisions about what activities they will pursue and how they will spend their money to further their purpose. Annual meetings provide an opportunity to have regular updates about how the corporation is performing. When matters come up throughout the year that need to be addressed before the next annual meeting, corporations can use special meetings to address those things, but they need to ensure that proper notice is provided.