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BENZIE AREA WOMEN’S HISTORY PROJECT – WENDY K. BAILEY, PRESENTER

Wednesday, March 24th, 2010

The Benzie Area Women’s History Project presented “Which Way Home – Perspectives on Immigration” on March 21, 2010.  One of our attorneys, Wendy K. Bailey, was a presenter for the workshop entitled, “U.S. Immigration History:  From a Legal Perspective.”  We understand the presentation was informative and enjoyed by those who attended.  For more information on the Benzie Area Women’s History Project, click on the following link:  http://www.bawhp.org

Posted 3/24/10

WE OPENED A NEW OFFICE!!!

Tuesday, February 23rd, 2010

Sterling Law Office is proud to announce the opening of a new office in Gaylord, Michigan.  Our newest office is located at 940 N. Center Avenue in Gaylord – phone:  989-705-ADAM (2326), and is open for business!  This expansion allows ADAM and Sterling Law Office to better serve clients across northern Lower Michigan and the eastern UP.                             Posted February 2010

NEW ASSOCIATE ATTORNEY!

Wednesday, October 21st, 2009

We are very pleased to announce that Steven W. Paciorka has joined our firm as an associate attorney!  Mr. Paciorka came to Empire from Kupelian Ormond & Magy, P.C. in Southfield, Michigan.  He holds a B.A. in Political Theory from Michigan State University and graduated with a Juris Doctor, Magna Cum Laude from Michigan State University’s College of Law.  His practice areas include family law, criminal law, commercial law and bankruptcy.  Steven Paciorka is married to Jennifer Walter and has two children, Ivan and Ingrid.  Please check out Steve’s web page under “Attorneys and Staff”.

We have also recently welcomed Marcia Metzen as our new office manager.  She was the office manager of a Chicago, Illinois firm, Schain, Burney, Ross & Citron, Ltd., where she was employed for over 22 years.  Marcia is very happy to have relocated to beautiful Leelanau county!

ELECTRONIC PRIVACY? AIN’T NO SUCH THING

Friday, August 29th, 2008

People going through divorce, custody or any legal skirmish take heed: electronic evidence from text messages, e-mail, instant messaging, and gleaned from networking sites like Facebook, MySpace and Linked-in, is increasingly showing up in court. Evidence from electronic media can be used to document cheating, stalking, hidden assets, fraud and any other pertinent information attorneys and jury consultants may find.

If you think these forms of communication are private and safe, think again. Think, for example, of former Detroit Mayor Kwame Kilpatrick, charged with numerous felonies on the basis of text-message evidence. Skytel, the service provider for Detroit city-owned cell phones, effortlessly retrieved 14,000 cell phone text messages that were sent four-to-six years ago, and these now form the foundation for the charges against Kilpatrick. If you e-mail, text message or otherwise communicate electronically on a government or employer-owned medium, every word you utter may be stored and retrievable.

Messages sent on individual or public (library, internet café) cell phones, computers or e-mail are no safer from discovery. Although Verizon, AT&T and Sprint state that they store text messages only for about two weeks or “not a long period” (whatever that means), hackers, police and private investigators frequently have retrieved old messages archived on carrier servers. Several software products are now sold which allow private individuals to secretly access and spy on others’ (such as a spouse’s) e-mail accounts. A Google survey reported that 27% of men and 21% of women had secretly prowled through someone else’s e-mail. Simple radio kits can also be purchased which let anyone intercept text messages, such as the Wal-Mart employee caught spying on a New York Times reporter. And of course, every bit of information put on blogs or social network sites is no more than a few clicks away from access by anyone.

What can be done to protect one’s electronic privacy? Primarily, never put anything on any electronic medium which you would not want published on the front page of the newspaper – not your PIN number, password, bank and asset information, those feelings of murder in your heart toward your ex, nor photos of the fun and tipsy night out at the local honky-tonk. Put passwords on your phone, wireless network and computer accounts to keep unwanted snoopers out. Erase all personal data from cell phones before recycling or discarding, using the phone manufacturers’ master reset instructions, which can be found on company websites. Just removing a SIM card does not remove a cell phone’s data history.

Remember, also, that whatever measures you take to safeguard your electronic utterances, none of it matters if the person to whom the text message or e-mail is sent has been less careful. Once information is posted or sent electronically, the sender has lost all control over where the information may wind up.

The only surefire guarantee your privacy won’t be invaded electronically is to keep private matters off electronic systems. If divorce, paternity, custody or other family law problems arise, the family law attorneys at Sterling Law Office are equipped to help resolve those problems, and to protect clients from electronic prying which could torpedo them in court.
Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., August 29, 2008

The information presented in this article is for general information only and should not be construed to be legal advice.

EMPIRE FAMILY LAW ATTORNEYS UNTANGLE PATERNITY

Tuesday, June 3rd, 2008

Family law and divorce law in Michigan uphold some unique tenets on the matter of paternity and fathers’ rights to their children. Understanding the laws is of utmost importance in the case of both biological children and non-biological children, as well as for children born either within or outside of marriage. Establishing the paternity of a child also can both protect a man’s freedom from responsibility for a child whom he did not conceive, or conversely can protect his rights to a parental relationship with a child he did not conceive.

Usually if a man wishes to secure the rights of a father to a child who is born out of wedlock, he must take action upon the birth of the child to lay the groundwork. He should have his name inscribed on the baby’s birth certificate as the father, if it is possible to do so, sign an acknowledgement of paternity with the Friend of the Court, file an action with the family court to establish paternity, or adopt the child if he is not the biological father. For men who are involved as father-figures with non-biological children (for example, with a child born to a girlfriend and conceived with a different man), it’s crucial to legally establish the relationship in order to protect the right to continue a relationship with the child in the future, even if the mother and the man don’t stay together.

Equally, if a man is being pursued for paternity and financial support for a child born out of wedlock which he did not conceive and with whom he does not have nor desire a relationship, a very fast and painless swab taken from inside the mouth can provide the DNA to defeat such a claim.

For children conceived or born during a marriage, or even within months after a divorce, but who were not conceived by the husband, Michigan family law weighs in heavily on the side of holding that the husband is the recognized and responsible father. Clearly, how this situation gets legally interpreted and enforced can have life-altering consequences for the husband whose wife conceives outside the marriage or for the man who conceives a child with a woman who is or recently was married to another man.

The “equitable parent” doctrine of state law holds that a husband who isn’t the biological father may be considered the father for all legal and parental purposes if the husband and child mutually acknowledge a father-child relationship or if the mother has helped develop such a relationship. The husband can choose to have the same rights to that child as if he were the biological parent and could prevent the biological father from gaining those rights.

On the other hand, a husband with a non-biological child conceived or born during his marriage can be prevented from denying the paternity and all responsibilities for that child by the “equitable estoppel” doctrine of Michigan family law. Thus a husband could end up having to take parental rights over a child who is not his and whose entry into this world was none of his choosing.

Generally speaking, Michigan paternity law has evolved with the priority of protecting the best interests of children. It is complex and multi-faceted, however, and for those facing paternity issues, the assistance and case-specific advice of experienced and savvy family law attorneys like those at Sterling Law Office is of paramount importance. While litigating matters of paternity does cost money, considering what clients potentially could stand to lose or to gain, it is one of the wisest investments that can be made.
Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., June 3, 2008

The information presented in this article is for general information only and should not be construed to be legal advice.

CUT COSTS, SAVE MONEY ON FAMILY LAW CASES

Friday, April 18th, 2008

Representation by a quality, skilled attorney costs money. As with your family doctor or neighborhood grocer, your attorney also has to pay monthly professional costs such as insurance, office rent and utilities, wages of staff, bar association fees, and so forth to keep the front door open and the lights on for clients. In a divorce, child support, or custody matter, total costs of litigating a case can range from a couple thousand dollars to the tens of thousands, depending upon an array of variables.

Sterling Law Office family law attorneys pursue client legal goals with the most efficient, minimal cost because we recognize that our clients also have budget limits and financial goals, especially in the current difficult economic times. On the client’s part, there are a number of things that can be done to control and reduce legal fees, and other potential costs of a family law case.

For starters, clients can cut down significantly on background research time on their case by fully completing all information that is requested at the initial consult, usually in the form of an intake questionnaire. Every kernel of information, such as account numbers, pension plans, family member birthdays and Social Security numbers, etc., which the client supplies saves time-and-money consuming phone calls and correspondence by the law office. When you prepare for the first consultation with a family law attorney, compose a file to bring along that includes copies of all family financial, educational, property, demographic and other information which is relevant to your case. Leaving copies of such documents with your attorney will give a serious boost to the “paper chase” for your matter, as well as saving time, paper and postage costs of the law office having to make the copies and return the originals to you.

A letter or e-mail offers an economical means of communicating information and questions to your attorney. Receiving information or questions in writing gives the attorney a chance to digest the information, research any questions, and devise advice before communicating with the client. A written document also can help the client organize thoughts and can be kept in the client file for future reference. This is a much more efficient use of the attorney’s and the client’s time than long, explanatory phone calls. Treat your attorney as your legal advisor, not as a therapist or a friend, and if it is a matter of venting emotion, dealing with psychological problems or getting moral support, turn to family, friends or professional counselors.

Because clients are billed for time the attorney spends on the matter, whenever the client can do his or her own negotiating it saves money. In a divorce or custody matter, for example, if the parties can discuss and come to agreement between themselves on any issues, each item worked out by the parties saves attorney time spent preparing for and dealing with the opposing attorney, the Friend of the Court, and other family court departments. Any item which would make up part of a divorce agreement (such as who keeps specific personal property, who pays insurance costs, division of parenting time and holidays, who pays credit card bills, etc.), will quickly build cost savings if worked out by the partners themselves. Thus, use of the professional negotiating skills of the attorney can be saved for issues on which agreement cannot be reached.

Trying to hold on to the family home, while tempting for many people, may not be a good financial choice in a divorce. Spousal support can help cover mortgage payments, but clients need to look at the total cost of maintaining the property, repairs and upkeep, taxes, and mortgage payments to determine if it really is feasible for one person to afford. Whoever keeps the house will also have to buy out the other spouse’s financial interest in the property.

If spouses make a clean and complete separation of their finances when they part, it protects each from having their credit hurt by payment defaults of the other. For example, if the couple continue to hold credit cards in common, one partner can drive up the debt and seriously hurt the other’s credit score. If one spouse promises in the divorce agreement to pay off certain creditors or a mortgage, then defaults on that promise, the creditor or bank can sue both partners if their names are both still on that asset.

It is very important to understand the different tax treatment of alimony versus child support. Alimony generally is taxed as income to the person receiving it, while child support generally is not taxable. Each type of payment has different rules for how long it will continue, as well, and the circumstances which can increase or decrease payments. The experienced family law attorney, like those at Sterling Law Office, will make certain you thoroughly understand the rules governing these two types of payment.

Finally, to save yourself and your heirs substantial costs in probate, taxes and the distress of conflict over inheritance, every client who completes a divorce must review and revise their estate plan, or create one if they haven’t yet done so. Wills, trusts and beneficiaries can all be impacted by a divorce. To ensure that assets are protected for the intended heirs, and that a client’s final wishes are carried out regarding health care, financial control, and other matters, an up-to-date estate plan is necessary.

By implementing the above cost-savings and planning, Sterling Law Office family law clients can remain on stable, solvent financial ground through the course of a marital dissolution. We help our clients disprove the infamous bumper sticker of a Chicago divorce attorney, which reads “Love is grand, divorce is $40 grand!”
Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., April 18, 2008

The information presented in this article is for general information only and should not be construed to be legal advice.

LOCAL CITIZENS SPUR MSC ELECTION REFORM

Tuesday, April 1st, 2008

On February 19, 2008, just ahead of twelve inches of new snow, twenty-four area residents, including GTLA Bar Association members, returned to Traverse City from a twelve-hour bus trip to Lansing to present to Senator Michelle McManus 1,200 petition signatures. McManus, (R), Lake Leelanau, chairs the Michigan Senate Campaign and Election Oversight Committee. Earlier in the day, the Traverse area delegation had asked the Senator to hold hearings on public financing of Michigan Supreme Court elections and public disclosure of all campaign expenditures.

The petition drive and the bus trip grew out of an event last fall organized by a coalition of citizens, myself among them, concerned about the integrity of the Michigan Supreme Court. “Judicial elections are becoming political prize fights where partisans and special interests seek to install judges who will answer to them instead of the law and the Constitution,” read the banner quoting retired U. S. Supreme Court Justice Sandra Day O’Conner at an October 25, 2007 forum, “Courting Trouble, Threats to a Fair and Independent Michigan Supreme Court.” Guest speakers Detroit Free Press columnist Brian Dickerson, Rich Robinson of the Michigan Campaign Finance Network, and Michigan Supreme Court Justice Elizabeth Weaver addressed the overflow crowd of mostly non-lawyers.

“How many of you have been a party to a case before the Michigan Supreme Court?” Mr. Dickerson asked. No one raised a hand. However, after hearing about court decisions affecting a range of subjects from no fault auto insurance to the environment, attendees concluded that each of them had indeed been involved in one form or another and that there exists the appearance that justices deciding these cases may have been answering to their campaign contributors instead of to the law.

$23 million has been spent since 2000 to elect Michigan Supreme Court justices. Nearly half of that sum has gone into unidentified, unreported candidate-focused issue ads disparaging the other candidate. After what some call “justice for sale,” 86% of cases before the MSC involve a campaign contributor as a party. Public financing, full disclosure of campaign funding, and an improved system for conflict of interest recusals are required to avoid the appearance of impropriety. Supreme Court Justice Weaver is also calling for Senate confirmation of Supreme Court appointments and one eight-year term.

To take action on our concerns and to build on the energy created by the forum, the forum organizing coalition established the Michigan Independent Supreme Court Campaign (MISCC). Volunteers from MISCC coordinated the petition drive and arranged the bus trip to deliver the results. From the efforts begun in Traverse City, grass roots groups in other areas of Michigan are planning similar educational events. Senator McManus pledged to move forward on the issue, but the results remain to be seen. While the delegation was at the Capitol, House Democrats did introduce a new judicial candidate public financing bill to join a Senate version already on the table. The efforts may eventually restore public confidence in the Court but it is too late to stop the ugly process for 2008.

While the public is distracted by the upcoming presidential election, special interests will be as focused on this year’s most expensive judicial race in Michigan history. Incumbent Republican Clifford Taylor is expected to wage a high stakes battle against a candidate chosen by the Democratic Party. While the ballot will not indicate their parties’ sponsorship, it will designate Justice Taylor as the incumbent. Always an advantage in the past, in this election year, the incumbency designation could remain an unfair advantage or become a liability, depending on the perception of the electorate and its disgust for the secretly-sponsored offensive campaign that is expected. Visit www.miscc.org for more information.
Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., April 1, 2008

Lea Ann Sterling received her J.D. from The Ohio State University College of Law in 1980 and got to Michigan as soon as she could where she established Sterling Law Office in Empire. Her practice with associate attorney Wendy K. Bailey includes Family Law, Social Security Disability, and Personal Injury. Sterling Law Office appears to be the only firm north of Grand Rapids specializing in Immigration Law where they counsel businesses on worksite compliance and assist families with this complex area. Lea Ann is married to Lanny Sterling and has three children. Among other activities leading some to call her a “renaissance woman,” Lea Ann enjoys writing about history and is the author of Historic Homes of Olde Towne and Historic Cottages of Mackinac Island. She appeared as an expert on the 1788 settlement of Marietta, Ohio in the 2003 documentary “Opening the Door West.” Googling “Lea Ann Sterling” would lead you to believe the name applies to at least five different people, but it’s all her. In addition to GTLA Bar, she is also a member of the Michigan Association for Justice and the American Immigration Lawyers Association.

The information presented in this article is for general information only and should not be construed to be legal advice.

ENTERING CANADA GETS HARDER FOR U.S. CITIZENS

Thursday, March 6th, 2008

Are you planning a business trip, semester abroad or vacation to Canada? If you want to visit, say, Vancouver, Montreal, Niagara Falls, Stratford-upon-Avon, Toronto or any other destination within our northern neighbor’s borders, make sure you have no criminal or operating-under-the-influence convictions in your past. Since 2003, more than 18,000 U.S. citizens have been refused entry at the Canadian border because of such convictions. It doesn’t matter if the conviction was 10 or 20 years ago. If it’s recorded on State Police or FBI databases then Canadian border officers can find it. Any such conviction is grounds to deny entry to Canada.

Immigration lawyers report a recent stepped-up number of individuals who have been refused entry for past convictions. The elevated scrutiny and law-enforcement activity at the borders comes as more and more personal and historical information on individuals becomes available on the internet through initiatives and databases brought into play by the Department of Homeland Security.

Not every person who attempts a border crossing gets this type of background check performed upon them, but every person is a potential target. Border guards select individuals at their discretion for such checks and can do so at any time to anyone. Being subjected to a background check may be determined by arbitrary and unpredictable criteria such as demeanor, apparent race and ethnicity, age, sex, or sometimes perhaps just the officer’s gut instinct or current mood. Tourists, new hires for Canadian jobs, students, would-be gamblers, professional athletes, truckers, and professionals en route to educational meetings are among the many classes of people who’ve been caught in the web of heightened border security and turned back.

To avoid the disappointment (and humiliation) of not being allowed to cross Canada’s border, those with a past conviction can take one of several steps to ensure this won’t happen. If the criminal conviction is a misdemeanor, was resolved over 5 years ago, and if it is the only criminal conviction the person has ever had, then he or she may be eligible to have the conviction expunged from their record. Once it has been expunged, the conviction will not show up in background checks.

Expungement is not allowed for some types of criminal convictions, such as for sexual offenses and felonies which can be punished by a life sentence. Expungement also is not allowed for criminal driving offenses, such as operating-under-the-influence, driving without a license, etc.

Individuals with non-expungable convictions do have some other options available to them. One alternative is to apply for a temporary resident permit, at a fee of $100. The application form for this permit can be obtained at border crossing stations, but generally needs to be done in advance of an attempted crossing, as the permit is not usually granted on the spot. It is good for one visit only. Another means of getting permanent border-crossing approval for people with past convictions is to apply, with the help of a Canadian attorney, for a “rehabilitation certificate.”

Sterling Law Office immigration attorneys will assist clients in expungement of eligible criminal convictions, completing temporary Canadian resident applications, and identifying attorneys in Canada experienced with Canadian immigration law and procedures. In an era of police and government access to virtually everything there is to know about individual citizens, mistakes of the past can bring additional punishment in the present. Sterling Law office advocacy helps prevent that.
Sterling Law attorneys are members of the American Immigration Lawyers Association.

Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., March 6, 2008

The information presented in this article is for general information only and should not be construed to be legal advice.

STERLING LAW STAFF PARTICIPATION IN CONTINUING LEGAL EDUCATION

Saturday, December 15th, 2007

The Federal Bar Association Immigration Law Section, seminar on “U.S. Employers and Immigration Enforcement.” Detroit, Michigan, January 25, 2008, attended by Lea Ann Sterling.

2007 Institute for Continuing Legal Education Family Law and Child Custody Seminar. On video. December 2007 and ongoing, attended by Lea Ann Sterling, Wendy Bailey, and Kenneth Watson.

2007 American Immigration Lawyers Association, Worksite Enforcement and Immigrant Employment Law Conference. Scottsdale, Arizona, November 30-December 1, 2007, attended by Lea Ann Sterling.

2007 Michigan Bar Association Annual Meeting and Institute for Continuing Legal Education Solo and Small Firm Institute. Grand Rapids, Michigan, September 27-28, 2007, attended by Lea Ann Sterling, Lanny Sterling, M. Wreford.
Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., December 15, 2007

The information presented in this article is for general information only and should not be construed to be legal advice.

NEWS FOR FRIENDS OF LIBRARY – INCORPORATION IS ESSENTIAL

Monday, November 5th, 2007

Sterling Law Office attorneys recently worked on articles of incorporation and other state and federal documentation for a local friends of the library organization. The following article gives an excellent summary of why formal incorporation is very important for library friends. This article is reprinted with kind permission of the State Library of Michigan, originally posted on their website www.michigan.gov/libraryofmichigan.

FRIENDS OF THE LIBRARY – PART I: INCORPORATION
There are a number of legal issues that a group of hard-working, helpful volunteers must consider prior to establishing themselves as the official Friends of the Library. Two articles (below) focus on the legal requirements of establishing and operating Friends of the Library groups to help them work effectively and efficiently with public libraries across Michigan. The first article focuses on the establishment options of the group. The second article focuses on legal requirements tied to fundraising and gaining 501(c)(3) status.

One of the most important goals a Friends of the Library group must achieve is to establish a proper relationship with the public library with which it is associated. Each party should understand the legal status of the other, as well as respect each other’s powers and duties. This relationship can either make or break the Friends of the Library. Care should be taken to establish a reporting structure, a policy on gifts to the library and authorization for any activities undertaken in the name of or on behalf of the library.

In Michigan, as in most other states, there are two basic organizational structures to be considered when establishing a Friends of the Library group: unincorporated association or corporation. The choice of one or the other depends on an analysis of factors such as cost, liability and certainty.

A) Unincorporated Associations. Many associations made up of volunteers, especially those organized for short-term projects, are unincorporated associations. Generally, the personal liability of members of unincorporated associations on contracts made by, for and on behalf of the association is “joint and several.” This means that all the members, collectively, or any one member may be liable for the entire value of the contracts of the association. The remaining members, for instance, may be liable for payment on a contract for printing costs if the association itself fails or is unable to pay off the debt of the group. Members of unincorporated associations may also be liable for any civil wrongs in which they participate, authorize or even to which they simply assent by vote or otherwise. These acts may include, but are not limited to, undertakings that amount to discrimination, wrongful hiring or termination, negligence, and lack of supervision.
Even unincorporated associations should be carefully organized with appropriate articles and bylaws. Since the potential for liability for members is omnipresent, the unincorporated group should always seek the advice of legal counsel to ensure that the documentation is complete and proper.

B) Michigan Nonprofit Corporations. In general, the officers, directors and members of nonprofit corporations are not personally liable for the acts of the corporation or each other. Any liability is generally limited to the assets of the corporation. The Michigan Nonprofit Corporation Act, MCL §450.2101 – §450.3192, allows nonprofit corporations to assume much of the liability of their directors and to indemnify their officers and directors for certain acts.

This is accomplished through the proper drafting of the corporation’s articles of incorporation and bylaws. The costs associated with drafting these documents are comparable to those for the unincorporated association. There is a nominal cost for filing the articles of incorporation with the Corporation, Securities and Land Development Bureau of the Michigan Department of Consumer and Industry Services.

In comparison with an unincorporated association, however, the legal results of establishing a Friends of the Library group as a Michigan Nonprofit Corporation are very certain. The Michigan Nonprofit Corporation Act is quite extensive and very specific in its regulation of the operation of covered entities. Additionally, there is a great deal of case law. Legal counsel will be able to predict with more certitude the outcome of different situations and the implications of different options in establishment and operation. Most Friends of the Library groups in Michigan have chosen to become incorporated under the Michigan Nonprofit Corporations Act.

C) Filing to Become a Michigan Nonprofit Corporation. Becoming a Michigan nonprofit corporation is neither difficult nor expensive. The questions asked on the application will prompt the organizers of a Friends of the Library group to ask all the important questions about the purpose and structure of the organization. The statement of purpose is extremely important and should be drafted with the advice of legal counsel in order to avoid unwanted results or implications.

It is at this stage in the process that a decision must be made between a membership corporation or a directorship corporation. A membership corporation is one in which each member generally has the right of one vote on all matters brought before the corporation. While this may seem to embody the democratic ideal, it often becomes cumbersome as nonprofit corporations grow and decisions need to be made in a more efficient manner. Most nonprofit corporations that expect to involve numerous members in their activities choose the directorship form of organization. Legal counsel for the Friends of the Library will be able to explain the fine points of the options as well as draft the appropriate articles of incorporation and bylaws.

FRIENDS OF THE LIBRARY PART II: FUNDRAISING
A) Fundraising. Friends of the Library should also become knowledgeable about the state laws governing all the activities of the group. Most Friends of the Library are engaged in fundraising for the library. With few exceptions, all organizations must apply for and obtain a license to solicit charitable contributions. This license is obtained from the Michigan Department of Attorney General, Charitable Trust Section. Friends of the Library who do not receive contributions in excess of $8,000 during a 12-month period of any year and who use all volunteers and make a financial statement available to the public may be exempt from the requirement. However, as soon as the organization exceeds the $8,000 threshold, an application for a license must be filed within 30 days with the Attorney General’s Charitable Trust Section. They are also a helpful source of information if the Friends are thinking of hiring a professional fundraiser.

Many other laws govern the typical fundraising activities of Friends of the Library. For example, if a group holds a raffle or conducts bingo or similar games of chance, it must obtain a license from the Michigan Bureau of Lottery, Charitable Gaming Division. If the Friends are engaged in the sale of goods, even used books, at retail, a sales tax license and the collection and remittance of sales tax is generally required.

B) 501(c)(3) Status. There are two basic reasons why a Friends of the Library might seek tax-exempt status under Section 501(c)(3) of the Internal Revenue Code: a recognized organization is not subject to federal income tax and donations to the organization are tax deductible as provided by the code. Other advantages of acquiring federal tax-exempt status may occur on the state level. Although recognition as a tax-exempt organization by the IRS does not automatically mean exemption from Michigan taxes, there are various exemptions from income, property or sales and use taxes. For instance, 501(c)(3) organizations whose retail sales do not exceed $5,000 in a calendar year may be exempt from sales tax. Legal counsel will be able to advise Friends of the Library in regard to other advantageous provisions.

501(c)(3) status does not come free of restrictions and requirements. An annual report is required under most circumstances. Tax-exempt organizations are somewhat restricted in their ability to lobby and influence legislation. Income taxes may be imposed on “unrelated business activities.” Friends of the Library should be especially careful about participating in any election campaigns, including ballot questions, without first consulting legal counsel. All of these matters should be discussed on a regular basis with legal and financial professionals.

Although the process of applying for 501(c)(3) status requires care and attention to detail, the advantages far outweigh any difficulties associated with the process. The first step is to obtain the proper forms. Publication 557, “Tax-Exempt Status for Your Organization,” published by the Internal Revenue Service, is a good place to start. This booklet describes the application and approval process, which forms must be used and the types of information required. There is an extremely helpful discussion of which organizations must apply for recognition and which are not required to file.

The application itself must be submitted by Form 1023 and Form 872-C. There is a one-time filing fee. The form may be long, but it is not mysterious. The Friends of the Library, in anticipation of an appointment, can gather much of the information requested through legal counsel. The forms are available free of charge from the Internal Revenue Service.
One of the most important reasons for incorporating a Friends of the Library as a Michigan nonprofit corporation, as well as obtaining 501(c)(3) status, is the assurance provided to library donors that the organization is being operated in accordance with law and with a certain measure of accountability to the public. This assurance can assist in immeasurable ways with any fundraising activities the Friends of the Library may choose.
(Originally published on the Library of Michigan website, www.michigan.gov/libraryofmichigan. Reproduced with permission by the Library of Michigan.)
Posted by Mary Wreford; Approved by Lea Ann Sterling, Esq., November 15, 2007.

The information presented in this article is for general information only and should not be construed to be legal advice.

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