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Author Topic: Trying to create a donation drive to raise funds for CZ. Need legal help !!  (Read 3527 times)
Milton Beychok
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« on: November 10, 2010, 06:20:13 UTC »

We are trying to set up a method for accumulating donations from CZ members and disbursing those donations to pay for hosting our servers. An account has been established at PayPal to receive and accumulate donations from CZ members.

We are concerned that the holder of the PayPal account may be incur an income tax liability. The legal costs for setting up a 501(c)3 non-profit, tax free entity are much too costly and can take months to accomplish

Setting up what is known as an "unincorporated, non-profit association" [ see Code of Federal Regulations 12 CFR 330.11 (c) ] also involves legal costs and may also take too long to accomplish.

Does anyone have a friend or relative who is a lawyer and who can advise us as to a non-costly and quick method of insuring that the PayPal account holder will not incur an income tax liability by accumulating donations and disbursing them to pay our bills??? Is there some written agreement that can be signed by three or more members of our Management Council that will shield the PayPal account holder from incurring a tax liability?

Please, we don't need personal opinions or advice from non-lawyers. We need help from a knowledgeable tax lawyer who is willing to lend us a hand pro bono (i.e., at no cost).

If you know someone who can help us, let me know as soon as possible ... like yesterday!

Milt Beychok
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Mary Ash
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« Reply #1 on: November 10, 2010, 18:28:21 UTC »

Milt,

Work your contacts and find someone who has worked with nonprofit organizations. I am sure you know somebody.

Or use Citizendium's legal counsel.

MA
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Jess Key
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« Reply #2 on: November 10, 2010, 18:28:58 UTC »

Or use Citizendium's legal counsel.
What legal counsel?
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Joe Quick
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« Reply #3 on: November 10, 2010, 18:51:47 UTC »

Or use Citizendium's legal counsel.
What legal counsel?

LOL.
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Mary Ash
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« Reply #4 on: November 10, 2010, 19:46:34 UTC »

I am surprised no attorney has not volunteered to help out. Sigh...

I guess you could always talk to Howard since he seems to have some knowledge of 503s.

You might also look for a grant writer as they have knowledge of nonprofit financing.
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Martin Baldwin-Edwards
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« Reply #5 on: November 10, 2010, 20:44:24 UTC »

May I suggest that the MC delete or update this page?

http://en.citizendium.org/wiki/CZ:Donate
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Howard C. Berkowitz
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« Reply #6 on: November 10, 2010, 21:02:53 UTC »

I am surprised no attorney has not volunteered to help out. Sigh...

I guess you could always talk to Howard since he seems to have some knowledge of 503s.

You might also look for a grant writer as they have knowledge of nonprofit financing.

Well, it's more my housemate who actually wrote the IRS-accepted 501(c)(3), although I helped. I suspect she'd be willing to help.  She was finishing the program for IRS Registered Agent (I think that's the term for a non-laywer, non-CPA who can represent to the IRS) when illness struck.

I'm most knowledgeable on the political rights of 501(c)(3), 501(c)(4), 527, etc.
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http://en.citizendium.org/wiki/User:Howard_C._Berkowitz
Could you be writing an article rather than arguing here?
Milton Beychok
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« Reply #7 on: November 10, 2010, 21:36:18 UTC »

Martin, we have already discussed that and intend to do it as soon as we have the time to do so.

Milt
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Anthony DiPierro
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« Reply #8 on: November 12, 2010, 20:04:51 UTC »

Well, it's more my housemate who actually wrote the IRS-accepted 501(c)(3), although I helped. I suspect she'd be willing to help.  She was finishing the program for IRS Registered Agent (I think that's the term for a non-laywer, non-CPA who can represent to the IRS) when illness struck.

Well, Milton doesn't want "personal opinions or advice from non-lawyers", and an Enrolled Agent (http://www.irs.gov/taxpros/agents/article/0,,id=100710,00.html) is not necessarily a lawyer.

As an Enrolled Agent and tax professional who has successfully set up a non-profit organization and done the taxes for it and others, I'd go on, but Milton doesn't want "personal opinions or advice from non-lawyers".
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Hayford Peirce
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« Reply #9 on: November 12, 2010, 20:27:54 UTC »

I'm sure that Milton would reconsider if enough of us twisted his arm, Anthony.

Milton, consider your arm being *seriously* twisted!
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Milton Beychok
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« Reply #10 on: November 12, 2010, 22:55:54 UTC »

Anthony DiPierro:

Of course I would like to hear from someone who knows the subject and has the relevant experience and expertise!! I just sent you a personal email asking for your help and I am awaiting your reply to that email.

Thanks very much,

Milt Beychok
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Anthony DiPierro
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« Reply #11 on: November 12, 2010, 23:15:50 UTC »

I've responded to Milton privately.  Publicly, I'd like to at least respond to this:

"The legal costs for setting up a 501(c)3 non-profit, tax free entity are much too costly and can take months to accomplish."

Your number one issue right now is to get a tax id for the entity ("Citizendium Foundation").  That has nothing to do with 501(c)(3) status, and takes days or hours, not months.  You probably first want to set up a non-profit corporation.  Again, nothing to do with 501(c)(3) status (*), and takes days or hours, not months (especially since you already have a board and a charter).

(*) Worst case scenario, if you don't quite get your corporate purpose right when you incorporate, you might have to amend the articles of incorporation before you can file for 501(c)(3).
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Martin Baldwin-Edwards
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« Reply #12 on: November 13, 2010, 00:51:53 UTC »

Thanks, Anthony. I am very concerned that CZ appears not to exist legally and bureaucratically speaking, and this has to be remedied without delay.
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Milton Beychok
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« Reply #13 on: November 13, 2010, 01:28:55 UTC »

Martin:

Both Anthony's comments here, and in his email response to my email contact, are now before the MC.

Milt
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Martin Baldwin-Edwards
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« Reply #14 on: November 13, 2010, 01:51:34 UTC »

Thanks, Milt. i didn't mean to imply that the MC is not doing enough. I think we all appreciate the real progress that has been made in a very short timeframe.
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Hayford Peirce
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« Reply #15 on: November 13, 2010, 03:22:11 UTC »

Without wanting to appear guilty of lese-majeste, would it be heretical to suggest that possibly Larry (whom I supported in 99% of all issues over the years) might have left us in the lurch, or, to choose another metaphor, seriously up the creek?

For those of you with long memories, you might recall that it was I, yr. obd. servant, who first brought up in the Forums, as a "Thought Experience", the really weird idea that Larry had decided to withdraw from active participation in CZ and, by his increasingly frequent non-existence, was actually preparing us for "Life Without Larry".

Which is exactly what he admitted to a few months later....

I'm truly sorry to have foreseen subsequent events so accurately....

And now it looks even worse....
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Howard C. Berkowitz
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Posts: 3872


« Reply #16 on: November 13, 2010, 03:37:25 UTC »

Without wanting to appear guilty of lese-majeste, would it be heretical to suggest that possibly Larry (whom I supported in 99% of all issues over the years) might have left us in the lurch, or, to choose another metaphor, seriously up the creek?

For those of you with long memories, you might recall that it was I, yr. obd. servant, who first brought up in the Forums, as a "Thought Experience", the really weird idea that Larry had decided to withdraw from active participation in CZ and, by his increasingly frequent non-existence, was actually preparing us for "Life Without Larry".

Which is exactly what he admitted to a few months later....

I'm truly sorry to have foreseen subsequent events so accurately....

And now it looks even worse....

While the metaphor is sexist, I'm reminded of the young fellow that asked how to teach a girl to swim.

"Gently put an arm around her waist, and start to stretch her arm...

"It's my sister."

"Oh. Throw her off the dock."

Most people, I think would think that teaching to live involves a certain degree of parental transition.  Among the most egregious lacks of transition was forming a corporation.
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http://en.citizendium.org/wiki/User:Howard_C._Berkowitz
Could you be writing an article rather than arguing here?
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