23.1 TAX EXEMPT ORGANIZATIONS

Question 1

WHAT ARE THE QUALIFICATIONS FOR 501(C) ORGANIZATIONS?

Answer 1

GIVEN TAX EXEMPT STATUS FROM FEDERAL INCOME TAX ONCE APPROVED BY THE IRS. THE ORGANIZATION MUST BE ONE OF THOSE SPECIFICALLY IDENTIFIED IN THE TAX CODE AND MUST APPLY FOR AN RECEIVE AN EXEMPTION.

FORM 990-N IS REQUIRED FOR MOST TAX-EXEMPT ORGANIZATIONS IF GROSS RECEIPTS < 50K

FORM 990-EZ FILLED BY ORGANIZATIONS WITH GROSS RECEIPTS BETWEEN 50 - 200K

FORM 990 FILLED BY ORGANIZATIONS WITH GROSS RECEIPTS WITH GREATER THAN 200K

FYI AN EXEMPT ORGANIZATION HAVING GROSS INCOME OF 1K OR MORE FROM AN UNRELATED BUSEINSS MUST FILE FORM 990-T.

THE ENTITY MUST BE OPERATING AS A
1) CORPORATION
2) COMMUNITY CHEST, FUND, CHARITY, LABOR ORGANIZATION, SOCIAL CLUB
3) PENSION AND PROFIT-SHARING TRUST
4) PRIVATE FOUNDATION

FYI PARTNERSHIPS AND FEEDERS (TRANSFERS PROFIT TO CHARITY) ARE NOT ALLOWED.

Question 2

WHAT IS THE DIFFERENCE BETWEEN A 501C PRIVATE AND 501C PUBLIC FOUNDATIONS?

Answer 2

PRIVATE: TYPICALLY HAVE A MAJOR SOURCE OF FUNDING AND RECEIVE LESS THAN A 3RD OF FUNDING FROM THE GENERAL PUBLIC,
- PRIMARY ACTIVITY IS USING THE FUNDS GENERATED FROM THE ENDOWMENT TO PROVIDE GRANTS TO CHARITABLE ORGANIZATIONS AND INDIVIDUALS
- MUST FILE 990-F

PUBLIC: AT LEAST 1/3 IS RECEIVED FROM THE PUBLIC. THE DONATIONS MUST BE USED EXCLUSIVELY FOR CARRYING OUT THEIR EXEMPT PURPOSES. (CHURCH, HOSPITALS)