A Bulletin for Nonprofit Organizations
by the Public Law Center                                                      February
 2012, Volume 7, Issue 1
In This Issue
Nonprofits & Political Activity
Legal Developments Affecting Your Clients
Legal Developments Affecting Your Organization
IRS Updates

Thank you to the Access to Justice Annual Fund Donors 

 PLC's work is life-changing for thousands of children, families, adults and seniors each year. They depend upon PLC for assistance in civil matters that threaten their safety and security in basic areas of living. PLC in turn depends upon the financial support of the Access to Justice Annual Fund to ensure that Orange County's low-income residents receive vitally needed legal assistance. Make your contribution to the 2012 Access to Justice Annual Fund today.

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Community Organizations Legal Assistance Project (COLAP)

PLC's Community Organizations Legal Assistance Project (COLAP) provides free legal assistance to eligible nonprofit organizations as well as to those interested in starting new nonprofit organizations that benefit Orange County's low-income population.  If your organization needs assistance, please email Diamond Tran or call (714) 541-1010 x 293.


To view previous editions of Nonprofit Matters, please visit PLC's newsletters page.

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Legal Disclaimer
Upcoming Workshops
Political Restrictions on Nonprofits-- How to Maintain Compliance*

By Sarah Efthymiou and Antoinette Naddour Balta**


Nonprofit A, organized to provide music instruction for underprivileged students, distributes an on-line voter guide that presents candidates for an upcoming election in a neutral manner and contains links to the candidates' websites. Nonprofit B, organized to protect local beaches, posts information on its website urging visitors to vote for the candidate who supports environmental issues. Both charities are engaging in political activity, but only B's action would be considered a prohibited intervention that could result in a loss of tax-exempt status.


While nonprofits generally enjoy the privilege of being tax-exempt, it is not without regulation. One particular regulation is the restriction on nonprofits from political campaigning. 501(c)(3) organizations are forbidden from directly or indirectly participating in any political campaign on behalf of (or in opposition to) any candidate for elective public office. Violation of this prohibition could result in the revocation of your organization's tax-exempt status and/or the imposition of excise taxes on your organization.




Legal Developments Affecting Your Clients 


In Castro-Martinez v. Holder, No. 08-70343, the Ninth Circuit Court of Appeals reasserted the well established principle that an individual seeking asylum in the US due to private persecution need not report the abuse, but must show that the government is either "unable or unwilling" to stop the non-governmental actors.  The case involved a homosexual man from Mexico who was raped as a child.  For additional information, read the amended Ninth Circuit opinion.  


Day Laborers

Last September, the Ninth Circuit Court of Appeals struck down the City of Redondo Beach ordinance restricting day laborers from gathering on busy street corners to solicit work from motorists. The ordinance was struck down on free-speech grounds. The US Supreme Court recently rejected the city's appeal. For additional information, read the MALDEF news release and the Ninth Circuit's published opinion.


Foster Youth

AB 194 gives current and former foster youth, along with veterans and disabled students, priority status when registering for courses at California State University or California Community colleges.


Home Care Providers

New rules proposed by the Labor Department would provide wage protections for in-home care workers. Currently, workers classified as "companions" are exempt from the Fair Labor Standards Act's minimum wage and overtime pay requirements.



SB 1191 would require every landlord who is in default under a mortgage or deed of trust and who has received a notice of sale from the mortgagee, trustee, or other person authorized to take the sale to disclose the notice of sale to any prospective tenant prior to executing a lease agreement for the property to be sold. The bill would also provide that a violation of those provisions would invalidate the lease and entitle the tenant to recovery of all rent paid under the lease.


Wage Garnishments
AB 1388 prevents income from being garnished as a result of medical debt under specific circumstances.


AB 1111 prohibits a court from garnishing wages or levying a bank account to collect fees or fines from a person under 25 years of age who has been issued a citation for truancy, loitering, curfew violations, or illegal lodging if the person is homeless or has no permanent address.


For text and status updates of state law, visit the Official CA Legislative Information website.  



Legal Developments Affecting Your Organization


Employment-related laws: Governor Jerry Brown signed a plethora of employment-related bills in 2011, many of which took effect on January 1, 2012. Some of the more significant new laws are summarized below. Read more... 


Tax Credit for Hiring Veterans: the VOW to Hire Heroes Act of 2011 provides an expanded Work Opportunity Tax Credit (WOTC) to businesses that hire eligible unemployed veterans and for the first time also makes the credit available to certain tax-exempt organizations. IRS Notice 2012-13 contains additional guidance for tax-exempt employers claiming the credit. For more information, read the IRS news release and related materials (including FAQs).  


IRS Updates


The IRS is suspending the availability of the e-file MeF system to implement some changes and will therefore not be available from January 1, 2012 through February 29, 2012 for electronic filing of Forms 990, 990-EZ, 990-PF and 1120-POL information returns. The 990-N e-postcard filing system will not be affected by the temporary suspension of the MeF system. 


The IRS is granting an extension of time to file to March 30, 2012 to organizations whose due date or first extended due date is January 17 or February 15, 2012. Affected organizations that are not required to file electronically may do the same and, alternatively, may file a paper return anytime before March 30, 2012.  


An affected organization that has not previously received an extension and wishes to extend its filing due date until after March 30, 2012 may request an automatic 3-month extension by filing Form 8868, Extension of Time to File an Exempt Organization Return, by its original due date.  If an affected organization has already obtained an automatic 3-month extension, the IRS will grant the organization an additional 3-month extension if the organization properly completes and files Form 8868 by its first extended due date.  Organizations that have already been granted two extensions for a total of six months may not request a further extension.


See also IR-2011-120, Filing Deadline Extended to March 30 for Some Tax Exempt Organizations.


An updated edition of IRS Publication 557, Tax-Exempt Status for Your Organization is now available.