Integrated Auxiliaries: Tax Privileges and Qualification

An integrated auxiliary is a creature of tax law:  in a nutshell, it is typically a separately formed legal entity operating a ministry extension of a church or other house of worship.  Integrated auxiliaries may range from an afterschool sports ministry to more complex elder care or housing programs.  Because churches are exempt from the initial exemption and annual Form 990 filing requirements under Section 501(c)(3), so too are churches’ integrated auxiliaries.  These significant benefits warrant careful evaluation with respect to formation of church-related organizations and their tax compliant operations.

FEMA is for Churches Too

The Federal Emergency Management Agency recently changed course to allow emergency relief for churches and other religious houses of worship, on par with non-religious organizations and in keeping with the U.S. Supreme Court’s 2017 Trinity Lutheran case involving government grants for religious school playgrounds. How do disaster relief, playgrounds, and religious liberty relate to each other?  In a nutshell, as FEMA has now affirmatively recognized, constitutional religious liberty protections mean that religious organizations may not be categorically disqualified from government grants such as for playground materials, to rebuild their houses of worship, or for other programs they may offer - even if they contain religious elements.

Nonprofits and Interns: The More Things Change, the More They Stay the Same

The U.S. Department of Labor recently issued update Fact Sheet #71, clarifying that the key test for whether unpaid interns are owed overtime and minimum wage under the Federal Labor Standards Act is the “primary beneficiary” determination – i.e., whether the worker or the business benefits more.  By its own terms, Fact Sheet #71 continues to apply only to for-profit businesses, albeit with a nod to nonprofit volunteers.  In addition, it seems assumed that all internships are, or at least should be, carried out on a voluntary, non-compensated basis.  How might a nonprofit think about an arrangement involving a paid intern?