The “intermediate sanctions” rules under Section 4958 of the Internal Revenue Code have long governed the payment of compensation to executives of public charities. While these rules are highly prescriptive, if followed, they offer taxpayers a significant advantage in the form or a rebuttable presumption of reasonableness. While there was concern among tax-exempts that the tax bill might reduce or even eliminate the presumption of reasonableness, that turned out not to be the case. But the final version of the legislation for the first time imposed a tax on certain excess compensation and excess parachute payments, which we discuss in more detail below.

Continue Reading New Tax Law Brings Penalties for Top Paid Non-Profit Executives

Over the course of this and next week, we will discuss the final overtime rule’s impact and address related workplace issues on which employers should focus in advance of its December 1st implementation date.  Today we focus on the rule’s impact on non-profits and educational institutions. 

On Wednesday of this week, the Department of Labor announced its Final Rule, which is aimed at expanding overtime eligibility for millions of American workers.  At its core, the final version of the rule doubled the minimum salary employers must pay “white collar” workers to maintain their exempt status.  See our post here for a summary of the new regulations.

But what does this mean for non-profits, including educational institutions, which may be harder hit by these changes than private sector employers?  In short, generally the same thing it means for any other employer.

Continue Reading Where do the DOL’s New FLSA White-Collar Overtime Regulations Leave Non-Profits and Educational Institutions?

By Tyrone P. Thomas (follow Tyrone on twitter at

Last week, Alabama Governor Robert Bentley removed Alabama State University Trustee Marvin Wiggins for violating the University’s conflict of interest rules. The removal proved once again that if you are responsible for the oversight of an organization’s governance or operations, you must be mindful of your family’s relationship to that organization. Given the broad range of employment and service provider relationships of public and private universities, now is as good a time as any to assess the content and application of conflict of interest policies.

Continue Reading Conflicts & Nepotism – A Dangerous Employment Cocktail

By Tyrone P. Thomas

As the nation recovers from the latest series of winter storms, let the rise of temperatures serve as a reminder of the incoming season – tax filing season. For institutional non-profits such as colleges and universities, this means the filing of the Form 990, a required informational tax return of the IRS. This year’s 990 reporting will have heightened scrutiny, particularly on executive compensation in the higher education community, in light of recent findings by the IRS from its Colleges and Universities Compliance Project.

Continue Reading It’s The Most Wonderful Time (For 990 Filings) Of The Year

By Tyrone P. Thomas

In a Twitter world of brief news updates, the NCAA’s tweet at 6:55 AM on October 22nd was blunt, but not unexpected – “Miami failed to monitor activities of a major booster, resulting in a decade of violations.” While the culpability of the University of Miami for former booster (and now convicted felon) Nevin Shapiro’s influence over the program has been presumed, calling the sanctions cited in the NCAA’s 102 page infraction report a slap on the wrist may be generous. The NCAA’s investigation of the U provides universities important ammunition to enforce notions of due process in future enforcement matters, while highlighting the importance of conducting independent investigations to validate self-reporting and corrective actions.

Continue Reading NCAA Gives Deference To The U – How Sanctions Against Miami May Affect Future Investigations

My colleague, Tyrone Thomas, writes that “The Governor of New York has taken a strong and outspoken stance aimed at placing those with the largest paychecks at institutional nonprofits under a microscope. Governor Cuomo’s newly formed Task Force on Not-For-Profit Entities will be conducting a review of current compensation levels of not-for-profit organizations that have received funds from the State of New York.”  Please read the entire advisory here.