Opinion 21-25

March 11, 2021

Digest:         A full-time judge may assist a bar association with its application for recognition of 501(c)(3) tax exemption status by providing guidance on the narrative description of the bar association’s activities on IRS Form 1023, provided the application is filed by the association’s attorney.

Rules:          22 NYCRR 100.2; 100.2(A); 100.4(C)(3); 100.4(G); Opinions 19-29; 18-120; 17-148; 15-171; 11-143; 05-66; 02-84; 01-78; 97-14; 95-123; 89-150.

Opinion:

         The inquiring full-time judge belongs to a local bar association, which currently seeks recognition of an exemption under Section 501(c)(3) of the Internal Revenue Code. The judge has an LL.M. in Taxation and worked previously as a tax consultant for a large accounting firm. The judge asks if they may assist the bar association by providing guidance on the narrative description of activities to be utilized in the entity’s tax-exempt application under IRS Form 1023. A separate tax lawyer, who is also on the bar association’s board, will actually draft and file the necessary tax forms and supporting materials with applicable tax authorities and the bar association will hire an accountant to maintain the 501(c)(3) status of the new entity through annual federal and state return filings and related accounting practice.

         A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). A judge may serve as an officer, director, trustee, or non-legal advisor of an organization devoted to the law, the legal system or the administration of justice or of an educational, religious, charitable, cultural fraternal or civic organization not conducted for profit (22 NYCRR 100.4[C][3]). However, a full-time judge is prohibited from practicing law, with limited exceptions inapplicable here (see 22 NYCRR 100.4[G]; Opinion 19-29).¹

         While a full-time judge may assist bar associations in a broad range of activities, we have recognized “the practice of law is not confined to appearances in court, but includes all actions taken on behalf of clients in matters connected with the law” (Opinion 01-78; accord 18-120).

         Both full-time and part-time judges often use their legal expertise and experience to advance permissible bar association sponsored initiatives, whether by serving on a bar association’s professional ethics committee (see Opinion 02-84), participating in a bar association’s settlement project where judges attempt to settle cases referred by the court (see Opinion 89-150), or serving on a committee that makes recommendations to the bar association on issuing grants and administering an endowment to enhance pro bono legal services (see Opinion 97-14).

         We distinguish between the improper practice of law and the permissible status of a “non-legal advisor” (compare 22 NYCRR 100.4[C][3] with 22 NYCRR 100.4[G]). For example, we have cautioned that a full-time judge who is serving on a not-for-profit entity’s board may not give legal advice to the board on leases, contracts, and the like, “even if the judge does not act as the organization’s attorney with outsiders” (Opinion 05-66). Nonetheless, a full-time judge may advise a religious organization on “canon law issues” (Opinion 95-123) or advise a fraternal organization on “matters of parliamentary procedure” (Opinion 15-171). Moreover, we have said that a full-time judge may serve on a not-for-profit club’s Bylaws Committee, “provided that the club’s outside counsel handles legal matters for the club and further provided that the judge will not give legal advice or engage in decisions likely to lead to litigation” (see Opinion 11-143).

         Finally, we have advised full-time judges to avoid even the appearance of providing legal advice in a setting where a participant may perceive the judge as a “legal advisor.” Thus, a full-time judge may not provide individualized assistance and guidance to their fellow congregants in completing healthcare directives, as doing so would, at the very least, create the appearance that the judge was impermissibly providing legal advice (see Opinion 19-29; see also Opinions 17-148; 18-120 [noting “the practice of law is not confined to appearances in court,” but includes “behind-the scenes advice and assistance”]; 22 NYCRR 100.4[G]).²

         We now turn to the present inquiry. The judge proposes to advise the bar association solely on the “narrative” description of the activities to be undertaken by the entity seeking recognition of tax-exempt status. The IRS website and IRS Form 1023 indicate that the disclosures in the narrative portion of a request for tax-exempt status under Section 501(c)(3) include a description of the following:

•    What is the [entity’s intended] activity?

•    Who conducts the activity?

•    When is the activity conducted?

•    Where is the activity conducted?

•    How does the activity further the organization’s exempt purposes?

•    What percentage of the organization’s total time is allocated to the activity?

•    How is the activity funded?

         The requested information involves factual statements of the entity’s general purposes. There is no requirement that the answers be prepared by an attorney. While the judge will presumably draw on skills previously developed in the private sector in fashioning answers to enhance the prospects for IRS approval, responding to these factual inquiries does not implicate any uniquely legal skills. We believe that preparing the responses as described does not necessarily involve providing legal advice, practicing law, or otherwise acting as a legal advisor.

         The request by this judge is narrowly framed. The judge would solely assist in preparing answers to the questions in the narrative section of the Form 1023 application to the IRS. A practicing attorney will actually prepare the final answers and submit the application and the association’s accountant will handle all further steps in the process.

         Accordingly, we conclude the judge may assist in drafting answers to the IRS questions in the narrative portion of Form 1023, provided the application is filed by the association’s attorney.

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¹ Clearly, the inquiring judge does not propose to “act pro se” or “give legal advice to a member of the judge’s family” (22 NYCRR 100.4[G]).

² Although not expressly stated in Opinion 11-143, we note that the club’s retention of outside counsel to handle all legal matters likewise helps reduce the risk of any public perception that the judge is improperly providing legal advice.