Covington represents tax-exempt organizations on a wide variety of sophisticated tax and other legal matters. Our clients include associations, educational institutions, public policy think tanks, philanthropic organizations, museums, sports leagues, churches, scientific and medical research organizations and governmental and quasi-governmental organizations. In addition to our tax lawyers, many of Covington’s lawyers in other practice groups regularly advise our tax-exempt organization clients, including attorneys in our corporate, real estate, government contracts, employee benefits, technology, media, antitrust, election, litigation and legislative practices.
Our tax lawyers handle sophisticated tax and related issues for tax-exempt organizations. This work includes both advising on the creation and operation of such organizations to ensure that they are in compliance with the applicable laws (including evolving standards of fiduciary duties) and representing clients before the Internal Revenue Service (including challenging threatened revocations of exempt status and seeking private letter rulings on difficult or sensitive matters). The firm’s experience in this area extends to the special problems of political (section 527) organizations, restrictions on legislative and political activities, the self-dealing and other special rules applicable to private foundations, the rules applicable to supporting organizations and donor advised funds, the “intermediate sanctions” / excess benefit rules, public disclosure requirements, the unrelated business income tax (UBIT), the creation, operation and use of for-profit subsidiaries, the application of the lobbying expense deduction disallowance rules and structuring affiliations among tax-exempt and for-profit entities. We counsel U.S. organizations with respect to activities abroad (cross-border philanthropy), non-U.S. entities with respect to activities within the United States and forming and qualifying U.S. affiliates of non-U.S. organizations. Currently, and over the years, the firm has represented organizations exempt under numerous provisions of the Internal Revenue Code, including sections 501(c)(3) (both public charities and private foundations), 501(c)(4) (social welfare organizations), 501(c)(6) (trade associations), and organizations with federal charters granted by the U.S. Congress.
We regularly advise individual, corporate and foundation donors and charitable organizations on complex structured and planned charitable gifts, including current and deferred gifts involving donor control issues, such as donor advised funds.
In addition, we represent tax-exempt organizations, boards, committees and trusts -- as well as individual directors, officers, trustees and fiduciaries -- in a variety of corporate governance matters specific to not-for-profit organizations.
Representative Matters
- We recently advised a prominent economic institute with respect to possible structures for a U.S.-based fundraising arm to raise support for a proposed global institute for governance.
- We serve as general outside counsel to the Council on International Educational Exchange, which facilitates student exchange programs at the university-level in over 80 countries.
- We are in the early stages of advising a newly formed U.S. foundation which will promote traveling art tours through South America.
- We recently advised on a joint venture between a U.S. educational organization and a for-profit telecommunications giant to produce a new cable television station dedicated to educational programming for children.
- We are in the process of advising a Canadian quasi-governmental entity in connection with its request for tax-exemption as a 501(c)(6) association.
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