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Tax News: NJ Voluntary Compliance Program for 501(c)(4)

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The State of New Jersey requires any charitable organization that solicits donations from New Jersey residents to register with the Division of Consumer Affairs within the Attorney General’s office. See N.J.A.C. Title 13 Chapter 48 Charitable Fund Raising

Confusion has arisen before as NJ and IRS differ on their respective definitions of a charitable organizations. NJ's definition is broader than the IRS definition. See IRC 501(c)(3) However, New Jersey’s statute for the purpose of this registration defines a charitable organization broadly to include both tax-exempt entities active as 501(c)(3) charitable organizations and 501(c)(4) social-welfare organizations.

In response, the Division of Consumer Affairs announced a temporary voluntary compliance program for 501(c)(4) organizations that have not previously registered with the Division of Consumer Affairs in accordance with the statutory requirements. For any 501(c)(4) that has never registered with the Division of Consumer Affairs, the Attorney General has agreed to forego collection of any penalties provided that the required documentation is filed by October 1, 2020.

501(c)(3) organizations are not currently eligible for this voluntary compliance program. Similarly, 501(c)(4)s that previously registered with the Division of Consumer Affairs but has failed to comply with annual reporting requirements are not eligible.

The specific registration requirements depends on a number of factors, including the gross annual revenue raised by the organization, with higher-revenue entities subject to more robust reporting (including, in some cases, the filing of an independent auditor’s report).

For any questions or assistance, please contact the Tax Attorneys at Fazzio Lawwe are in your corner!

Category: Tax

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