IRS 501: Non-Profit Organizations

Considered Non-Profit? Many entrepreneurs and business people are understandably confused about what is required for a corporation to be considered non-profit. A nonprofit corporation, or 501(c)(3), is a charitable organization that is recognized by the IRS. Non-profits do not pay income tax on its earnings or donations. Whenever people donate to a non-profit, they can reduce their taxable income through itemized deductions. Why Form a Non-profit? The primary reason people form a non-profit is to pursue

NON-PROFITS 501(c)(3) All charities are non-profits, but not all non-profits are charities is the standard answer when explaining a 501(c)(3), however both include a company mindset that aims to help a particular product or service to the public. Familiarizing one self to the Internal revenue Service is essential for anyone considering a 501(c)(3) as a business option. The tax-exempt status can seem like a favorable option to spare on expenses and for some industries it is the right answer

What is the primary purpose of an organization? The primary purpose of any organization is to maximize revenue and minimize expenses. Profit is the single most important aspect on the mind of shareholders and/or owners. However, that is not the primary purpose of all organizations. A not for profit organization has a mission that seeks to benefit the greater good of the community, society or the world. Nonprofit Organizations can make a profit however, the financial benefits are not for the owners/shareholders

Non-Profit Tax Compliance Unlike for-profit businesses, the focus of a nonprofit is not on gaining profits for shareholders and owners, but to fulfil a charitable mission for the benefit of the public. Because of this mission focus, the IRS has recognized these organizations as exempt from the federal income tax that is placed on for-profit businesses and individuals. This recognition is not automatic and is not guaranteed. Nonprofit organization must still follow the rules and regulations set forth

by the IRS as a tax-exempt organization under 501(c)(3), the organization must demonstrate that it is organized and operated exclusively for “religious, charitable, scientific or educational purposes” (Hopkins, 170). An organization’s tax exemption can be denied if “an inappropriate portion of its activities is not promoting one or more of its exempt purposes” (Hopkins, 170). The organization must be a corporation, including associations, trust, fund or foundation. It must also meet the non-distribution

Intermediate Sanctions The Internal Revenue Service (IRS) maintains strict governance of charitable organizations with whom receive their tax exempt status under IRC Sec. 501(c)(3). Organizations classified under IRC Sec. 501(c)(3) are monitored by the IRS for transactions with disqualified individuals in which benefits provided by the organization exceed the consideration received by said organization (IRS, 2015). Additionally, transactions determined to be in will result in sanctions levied

Non-Profit Tax Compliance Unlike for-profit businesses, the focus of a nonprofit is not on gaining profits for shareholders and owners, but to fulfil a charitable mission for the benefit of the public. Because of this mission focus, the IRS has recognized these organizations as exempt from the federal income tax that is placed on for-profit businesses and individuals. This recognition is not automatic and is not guaranteed. Nonprofit organization must still follow the rules and regulations set forth

depends what your interests are. To start, determine where you want to offer your gift of money, time, or expertise. Weather-disaster relief, famine, refugees, women, children, medical research, or civil rights, for example. You will find an organization for just about every interest. Direct Relief, Rotary International, Drs Without Borders and the YMCA are a few charities known for their excellent resource management. According to a charity accountability site, www.CharityNavigators.org, “They

Society labels organizations that perform services to aid mankind in a variety of ways, as being a nonprofit organization. These organizations are also labeled as being a tax-exempt organization. In the eyes of the Internal Revenue Service (IRS) these two terms are completely separate. According to the IRS, a non-profit organization is separation from a tax-exempt organization; however one organization can in fact be can fall into one of these two categories or even both (Internal Revenue, 2014)

for non-profit organizations and found there was a real need for people with business and financial experience. So, I used my skills to help a lot of disadvantaged people. This resulted in me seeking additional education to become an Executive Director of a non-profit organization. I am pursuing a degree in Business Administration, Non-Profit Management. One of my greatest achievement was developing a new non-profit and getting our non-profit status from the Internal Revenue Service (IRS) in