Tax Code Regulations And The Federal Government Through The Internal Revenue Services ( Irs )

827 WordsSep 29, 20144 Pages
Introduction The 501(c)3 tax code specifically for organizations that are reserved for educational institutions, churches or other nonprofit organizations including what is often deemed as charitable (Lavarda, 2009). There are two main reasons that an organization will seek to attain a tax-exempt status with the federal government through the Internal Revenue Services (IRS). First, is to provide for their beneficiaries a tax-deductible contribution, which allows taxpayers benefits when paying their federal income taxes and secondly, simply is for organizations the ability to not pay federal income taxes (Lavarda, 2009; Arnsberger, Ludlum, Riley, & Statnton, 2008). Organizations who seek out the tax-exempt status do benefit from the protection that the tax code provides, however due to tax code regulations and reform, organizations that do not heed to the code may be in jeopardy of violating the code. This violation will result in the IRS revoking the tax-exempt status. For emerging organizations that are on the cusp of defining their affiliations in society must determine if applying for tax-exemption status is a profitable move. Due to the scrutiny of these organizations and such organizations must take into account the liability that comes with the tax exemption status. The liability is not one that an organization can take lightly, if an organization does gain tax-exemption status and then later fails to abide by the regulations, the risk is simple; the revocation of the

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