Comments on: The Other Nonprofits – 501(c)(4), 501(c)(6) & 501(c)(7) http://www.501c3.org/blog/the-other-nonprofits/ Wed, 08 Feb 2012 00:41:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Greg McRay http://www.501c3.org/blog/the-other-nonprofits/#comment-13460 Greg McRay Sun, 05 Feb 2012 04:30:12 +0000 http://www.501c3.org/blog/?p=761#comment-13460 Tony...A 501c3 can give to a non-501c3, so long as it is designated for an exclusively charitable purpose. The donating 501c3 must have a complete accounting of the use of funds by the non-501c3, as it is accountable for making sure the expenses qualify as charitable. Tony…A 501c3 can give to a non-501c3, so long as it is designated for an exclusively charitable purpose. The donating 501c3 must have a complete accounting of the use of funds by the non-501c3, as it is accountable for making sure the expenses qualify as charitable.

]]> By: Tony http://www.501c3.org/blog/the-other-nonprofits/#comment-13192 Tony Sat, 28 Jan 2012 19:36:10 +0000 http://www.501c3.org/blog/?p=761#comment-13192 Dear Greg, Really appreciate all the information in this thread! Our question: we are a 501 c 3 church with a determination letter, and we tithe monthly to other 501 c 3 organizations. We have a non 501 c 3, but still a 501 c (other) entity on our requisition list. Can a 501 c 3 give to a non 501 c 3 if the non 501 c 3 is still a 501 c (other) organization? Couldn't find an answer anywhere ... Many thanks, Tony Dear Greg,

Really appreciate all the information in this thread!

Our question: we are a 501 c 3 church with a determination letter, and we tithe monthly to other 501 c 3 organizations. We have a non 501 c 3, but still a 501 c (other) entity on our requisition list. Can a 501 c 3 give to a non 501 c 3 if the non 501 c 3 is still a 501 c (other) organization? Couldn’t find an answer anywhere …

Many thanks,
Tony

]]> By: Greg McRay http://www.501c3.org/blog/the-other-nonprofits/#comment-13158 Greg McRay Fri, 27 Jan 2012 23:16:08 +0000 http://www.501c3.org/blog/?p=761#comment-13158 Your accountant is well-meaning, but very misinformed. It IS possible to get status all the way back, but you have to know what to do. We do this all the time. I do NOT recommend using a new corporate entity, lest your old one find itself on the hook for corporate taxes and penalties/interest. In addition, the law requires disclosure that the new organization is a successor organization, which guarantees tax problems. The safest bet is to use the old organization and apply for status that is retroactive. We can help you do that. Your accountant is well-meaning, but very misinformed. It IS possible to get status all the way back, but you have to know what to do. We do this all the time. I do NOT recommend using a new corporate entity, lest your old one find itself on the hook for corporate taxes and penalties/interest. In addition, the law requires disclosure that the new organization is a successor organization, which guarantees tax problems. The safest bet is to use the old organization and apply for status that is retroactive. We can help you do that.

]]> By: Greg McRay http://www.501c3.org/blog/the-other-nonprofits/#comment-13155 Greg McRay Fri, 27 Jan 2012 22:55:02 +0000 http://www.501c3.org/blog/?p=761#comment-13155 You are certainly allowed to <em>receive</em> a grant as a 501c7. The question is, "How likely is that?" Probably a long shot. You are certainly allowed to receive a grant as a 501c7. The question is, “How likely is that?” Probably a long shot.

]]> By: Maria http://www.501c3.org/blog/the-other-nonprofits/#comment-13154 Maria Fri, 27 Jan 2012 22:42:49 +0000 http://www.501c3.org/blog/?p=761#comment-13154 Thank you for your swift answer. Thank you for your swift answer.

]]> By: Heather http://www.501c3.org/blog/the-other-nonprofits/#comment-13152 Heather Fri, 27 Jan 2012 20:26:19 +0000 http://www.501c3.org/blog/?p=761#comment-13152 Thank you Greg! $400 is much more reasonable then $850. However, now i have another question. I was speaking to a tax accountant I know this morning and she indicated that if we applied for the exemption status and tell the IRS we have been around for almost 10 years (operating as a DBA before 2011) then we would automatically be denied because we have never filed a 990 in the past. She said we would then be required to re-apply for exemption going forward only and we would be on the hook for preparing 1120s for the past years for which I really have no records. We did get a brand new EIN effective 1/1/11 and incorporated in 10/11 so she suggested we just complete the 1023 as if we have only been existance since 2011. Do you agree? We are such a small group and are all volunteers but my name and SSN are on the EIN aplication so I don't want to end up having this come back and bite me for trying to do the right thing. Thank you Greg! $400 is much more reasonable then $850. However, now i have another question. I was speaking to a tax accountant I know this morning and she indicated that if we applied for the exemption status and tell the IRS we have been around for almost 10 years (operating as a DBA before 2011) then we would automatically be denied because we have never filed a 990 in the past. She said we would then be required to re-apply for exemption going forward only and we would be on the hook for preparing 1120s for the past years for which I really have no records. We did get a brand new EIN effective 1/1/11 and incorporated in 10/11 so she suggested we just complete the 1023 as if we have only been existance since 2011. Do you agree? We are such a small group and are all volunteers but my name and SSN are on the EIN aplication so I don’t want to end up having this come back and bite me for trying to do the right thing.

]]> By: Greg McRay http://www.501c3.org/blog/the-other-nonprofits/#comment-13130 Greg McRay Fri, 27 Jan 2012 05:42:18 +0000 http://www.501c3.org/blog/?p=761#comment-13130 Unfortunately, there is no path for converting from one tax-exempt status to another...the IRS does not allow it. A new corporation must be formed and Form 1023 completed in order to make this change. See: http://www.501c3.org/501c3-services/start-a-501c3-nonprofit Unfortunately, there is no path for converting from one tax-exempt status to another…the IRS does not allow it. A new corporation must be formed and Form 1023 completed in order to make this change. See: http://www.501c3.org/501c3-services/start-a-501c3-nonprofit

]]> By: Greg McRay http://www.501c3.org/blog/the-other-nonprofits/#comment-13129 Greg McRay Fri, 27 Jan 2012 05:37:37 +0000 http://www.501c3.org/blog/?p=761#comment-13129 Sounds like you do qualify for 501(c)(7) status. Because your expenses are over $5,000, you have to decide whether to file Form 1120 and pay taxes or apply for IRS tax-exemption. The good news is that your filing fee is not $850...it's $400 since your revenue is under $10,000. The form is indeed daunting, but we provide this service if you go that route. We can make it pretty easy for you. Give us a ring for more info. Sounds like you do qualify for 501(c)(7) status. Because your expenses are over $5,000, you have to decide whether to file Form 1120 and pay taxes or apply for IRS tax-exemption. The good news is that your filing fee is not $850…it’s $400 since your revenue is under $10,000. The form is indeed daunting, but we provide this service if you go that route. We can make it pretty easy for you. Give us a ring for more info.

]]> By: Heather http://www.501c3.org/blog/the-other-nonprofits/#comment-13124 Heather Fri, 27 Jan 2012 00:52:58 +0000 http://www.501c3.org/blog/?p=761#comment-13124 Hi- first let me say this is such a great website because this is so confusing! I am the treasurer of my local Moms Group. I believe we meet all the requirements of 501(c)7. Our Gross revenues are around $6k. Annual expenses about half of that. All of our expenses are club related. We have been around for years but previously were a DBA set up under the founders name. Just this year I was told to get an EIN and incorporate in CT to protect the Board from liabiltiy. We are now officially a non-profit Connecticut corporation. However, what are my tax filing requirements? Do I need to do an 1120? We are also on the fence about trying to get the official Tax-Exempt status since the $850 fee is prohibitive and the form itself is daunting. Also, I was told I Would need to prepare 3 years of financial statements which will be a huge process since the only records I have for the years before I took over are basically bank statements. Hi- first let me say this is such a great website because this is so confusing! I am the treasurer of my local Moms Group. I believe we meet all the requirements of 501(c)7. Our Gross revenues are around $6k. Annual expenses about half of that. All of our expenses are club related. We have been around for years but previously were a DBA set up under the founders name. Just this year I was told to get an EIN and incorporate in CT to protect the Board from liabiltiy. We are now officially a non-profit Connecticut corporation. However, what are my tax filing requirements? Do I need to do an 1120? We are also on the fence about trying to get the official Tax-Exempt status since the $850 fee is prohibitive and the form itself is daunting. Also, I was told I Would need to prepare 3 years of financial statements which will be a huge process since the only records I have for the years before I took over are basically bank statements.

]]> By: Greg McRay http://www.501c3.org/blog/the-other-nonprofits/#comment-13117 Greg McRay Thu, 26 Jan 2012 18:55:25 +0000 http://www.501c3.org/blog/?p=761#comment-13117 It's a one-time filing, but your organization will have to report annually to the IRS with Form 990. We have quite a few articles on the website here that deal with that. It’s a one-time filing, but your organization will have to report annually to the IRS with Form 990. We have quite a few articles on the website here that deal with that.

]]>