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Tax-Exempt Organizations

A Focused Practice With Depth

Chambers USA (2019) praises us for our “focus and depth within the tax-exempt sector.” We have decades of experience advising nonprofit corporations and charitable trusts on tax matters, including Texas Children’s Hospital on a variety of governance, transaction and finance matters; the Texas Medical Center on tax issues related to the development of the TMC3 campus; and a number of significant private foundations, including Houston Endowment Inc., The Brown Foundation and the T.L.L. Temple Foundation, on tax issues of particular importance to private foundation.

Our team is highly regarded for its experience and knowledge of complex tax rules and regulations, such as:

  • the private inurement proscription
  • the private benefit limitation
  • section 501(r) compliance for hospitals
  • excise taxes applicable to private foundations
  • section 4958 (intermediate sanctions) compliance
  • lobbying and electioneering rules
  • structuring investments to avoid unrelated business income tax
  • IRS examinations and rulings
  • tax-exempt finance

In addition, we provide legal guidance to nonprofit corporations in connection with a variety of business transactions, such as mergers and acquisitions, sales and purchases of physician practices and debt offerings. We also advise tax-exempt organizations on corporate governance matters, helping them draft and interpret governance documents and policies, as well as negotiating gift and naming rights agreements with donors.

Our clients include hospitals and healthcare organizations, senior living facilities, colleges and universities, independent and parochial schools, museums and arts organizations, conservation organizations, advocacy groups, student loan organizations, grant-making foundations and charitable trusts.

Recognition for Excellence

Our client work has earned our lawyers and practice national recognition within the legal industry.

  • Chambers USA – Texas: Tax
  • Legal 500 US – Taxes: Non-contentious
  • U.S. News  Best Lawyers – National Tax Law (Tier 1); Austin Tax Law (Tier 1), Houston Tax Law (Tier 1), Seattle Tax Law (Tier 1)
IMAGE: People in a hospital
Image: Hands with jars of food

Market-Leading Engagements

We provide tax advice on signification transactions involving tax-exempt organizations.

  • Amateur sports organization that conducts the biennial World Amateur Golf Championships in connection with its organization and tax-exempt status
  • Congaree Foundation on the organization and qualification of new entity as a charity
  • East Texas Medical Center Healthcare System on the sale of substantially all assets to Ardent Health Services, which included the formation by Arden and The UT Health Science Center of a partnership to invest more than $125 million in the new UT Health East Texas health system and discussions with the Texas Office of the Attorney General to ensure that the transaction would not be challenged by the Office of the Attorney General
  • Healthcare organization in structuring joint ventures and partnerships with for-profit entities to protect continued tax-exempt status of exempt participants
  • Healthcare organization on the rules and regulations enacted as part of the Affordable Care Act, including Internal Revenue Code Section 501(r)
  • Hospital with respect to the status of services providers as employees versus independent contractors
  • Independent school addressed governance and compliance issues, including providing board training, a review of organizational documents, and the drafting of policies related to the operation of the school and its fundraising activities
  • Multi-hospital health care system in connection with an Internal Revenue Service examination of its partnerships with proprietary healthcare providers