Tax Challenges for Counsel to Nonprofit Joint Ventures and Alliances

Tax practitioners representing nonprofits must understand the different types of structures that can be used for joint ventures and affiliations. The participants’ tax status and nature of the venture’s activities are critical in determining potential tax implications.

Counsel must provide guidance to clients that are tax-exempt participants in a joint venture or affiliation regarding its exempt status, the potential for intermediate sanctions, private benefit issues, unrelated business income tax, Form 990 disclosures, and maintaining its public charity status under Section 509 of the IRC.

In addition to tax statutes and regulations, our panel will review IRS rulings and other guidance with respect to joint ventures. While some guidance is sector-specific, such as joint ventures in the healthcare, university and low-income housing arenas, much is broadly applicable.

Listen as our authoritative panel of tax practitioners addresses key tax issues facing nonprofit or tax-exempt organizations in joint ventures or other business affiliations to choose the best type of structure for the venture, examine the nature of activities and operations of the venture, and deal with other critical issues. The panel will discuss joint ventures using partnership as well as corporate structures, and will also discuss tax challenges from the perspective of the for-profit entity partnering with the NPO.

1. Joint venture structures
   1. Joint ventures using partnerships
   2. Joint ventures using corporations
   3. Impact of new partnership audit rules
2. Risks to NPO in establishing joint venture
3. Nature of the activities and operations of the venture
4. UBIT, required disclosures and other issues
5. New Markets Tax Credits and other tax incentives

The panel will review these and other key issues:

• What factors should tax counsel consider in evaluating the potential benefits and risks with particular entity structure or business models for nonprofits? What issues should counsel to for-profits consider? What is the IRS' present ruling policy?
• What are the potential risks to a nonprofit's tax exemption when establishing a joint venture?
• When is unrelated business income generated?
• How does the tax status of the participants impact tax consequences of a venture or affiliation?

Learning Objectives

Upon completing this seminar, you will be able to:

• Recognize the tax issues that arise when nonprofit organizations establish joint ventures or other business alliances
• Determine how to best structure or restructure the allied business entity
• Discern risks to maintaining the organization’s tax-exempt status
• Identify possible UBIT and additional Form 990 disclosures

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, structuring joint venture deals,preparing complex tax forms and schedules, supervising other attorneys. Specific knowledge and understanding of exempt organization rules, knowledge of nonprofit operating agreements and activity statements; familiarity with the unrelated business taxable income (UBTI) rules and Form 990 disclosure requirements

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