Maine Nonprofit Law E-Bulletin

April 12, 2014

In this issue:
  • Introduction
  • Good News! – Proposed Bill to Substantially Narrow Maine Charitable Solicitations Act
  • Fate of Bill to Overturn Limit on Maine Charitable Deduction Still Uncertain
  • IRS Proposes Restrictions on Campaign Activities for 501(c)(4) Organizations

Good News! – Proposed Bill to Substantially Narrow Maine Charitable Solicitations Act

Who says the LePage Administration can’t get anything right?  The Department of Professional and Financial Regulation (DPFR) is supporting a bill that would dramatically alter the Maine Charitable Solicitations Act (CSA) by dropping all of the statute’s filing requirements for charities.  If passed, only professional fundraising solicitors would have any filing requirements under the CSA.  This is welcome news to those us who believe that the paperwork burdens of the CSA are not justified by the small likelihood of actually preventing or penalizing any charitable solicitations-related fraud.

The bill, LD 1799, came at the behest of the Maine Attorney General’s office and has bipartisan sponsorship.  The proposal to scale back the CSA was introduced in the wake of a December 2013 incident at the Red Barn restaurant in Augusta where their fundraising activities attracted the attention of the DPFR and revealed various ambiguities in the law.  Furthermore, both the Maine AG and the DPFR appear to realize that if a citizen is suspicious about an organization’s fundraising practices, she can turn to a number of public sources of information to learn more about that organization (or to file a complaint), including the Internal Revenue Service, the Maine Secretary of State, the Maine Attorney General, and Guidestar.

At this point, the bill has been assigned to the Committee on Labor, Commerce, Research and Economic Development and a public hearing was scheduled for March 6.  It is unclear if there will be any opposition at the committee or full Legislature level.  If your nonprofit organization would like to support or keep track of this bill, please e-mail Brenda Peluso ( at the Maine Association of Nonprofits to be added to her interested persons list.

Fate of Bill to Overturn Limit on Maine Charitable Deductions Still Uncertain

Meanwhile, the fate of LD 1664 is still unclear.  As I reported in the November 2013 Maine Nonprofit Law E-Bulletin, last spring the Maine Legislature voted to impose a $27,500 cap on all itemized deductions, including the mortgage interest deduction and the charitable giving deduction, retroactive to January 2, 2013.

LD 1664 would carve the charitable giving deduction out of the overall cap.  It is currently being worked by the Taxation Committee.  A work session for this week was recently postponed.  The Maine Association of Nonprofits is strongly supporting this bill and is urging people to contact their legislators to let them know how important the charitable deduction is to Maine charities.  For more information, see

IRS Proposes Restrictions on Campaign Activities for 501(c)(4) Organizations

In November, the Internal Revenue Service proposed new rules that would significantly restrict “candidate-related political activity” by section 501(c)(4) social welfare organizations.

The proposed rules have been met with much criticism by conservative organizations, and even by some liberal groups, as being too restrictive.  The IRS received over 122,000 comments on the rules, most of them in opposition, by the time the comment period closed in late February.  In the face of this headwind, it remains to be seen whether the IRS will drop the proposed rule altogether or will narrow its scope.  It seems unlikely that the rule would be approved as proposed.

One particular criticism is that the proposed rule would make it more difficult for 501(c)(4) organizations to conduct nonpartisan voter registration drives or “get out the vote” drives, as well as nonpartisan candidate forums within 30 days of a primary election or 60 days of a general election.  Note that the proposed rules would not affect 501(c)(3) organizations, which generally can engage in such nonpartisan activities.  But the IRS did request comments on whether the proposed 501(c)(4) rules should be extended to other section 501(c) organizations

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CIRCULAR 230 DISCLOSURE: Any federal tax advice contained in this communication or attachment is not to be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending any transaction or matter addressed in this communication.

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I send E-Bulletins 3 or 4 times per year to provide updates and analyses on legal and policy matters respecting Maine land conservation.  I do my best to keep my messages brief, timely, and useful to conservation-minded landowners, as well as land trust professionals and volunteers.  At the same time, no one should rely on these E-Bulletins as legal advice, and I encourage you to consult a qualified attorney for advice on any particular situation.

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