Monday, November 20, 2017

What is a 501(c)(3) Organization?

    This week I'm writing a series of blog posts that go together. The first part of the week will be dedicated to introducing some of the different types of non-profit organizations. Once the different organizations are introduced I will examine the Citizens United case and the effects that case had on the different organizations.

 

    A 501(c)(3) non-profit organization is an organization that is organized for a tax-exempt purpose, and operates exclusively for a tax-exempt purpose. These organizations must avoid any private inurement, avoid substantial lobbying, and avoid any political activity. These can be any corporation, fund, or foundation that is organized exclusively for religious, charitable, scientific, public safety, literary or educational purposes, amateur sports, or for the prevention of cruelty to children or animals. These organizations are exempt from federal income taxation if no individual shareholder derives a personal profit from the operation of the organization. These organizations cannot generate personal profit or any other benefit for individuals or shareholders or engage in political campaigns, including endorsing candidates or influencing legislation. However, they can engage in voter education, registration, and get out and vote drives if they are non-partisan in nature. They may also expend up to one million dollars to lobby for legislation if they declare this money to the IRS.  501(c)(3) organizations must maintain records of finances for public inspection, allow for taxation on unrelated business income, and file a form 990. Any donations made to these organizations is tax deductible. Churches are automatically 501(c)(3) organizations. To learn more about these organizations, click here: https://non-profit-organization.laws.com/501c3

 

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http://lawprofessors.typepad.com/nonprofit/2017/11/what-is-a-501c3-organization.html

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