Any charities and other organizations that want to be officially classified as a nonprofit, in order to be considered Tax-Exempt, must apply to the Internal Revenue Service Code and provide information on the purpose of their organization. If the IRS finds that the organization qualifies as a Nonprofit, it will grant the Tax-Exempt Status.
Different sections of the IRS code establish different types of nonprofits or exempt organizations. Many nonprofits that file for Tax-Exempt Status seek to qualify under section 501(c)(3) of the IRS Code. In fact, so many nonprofits are considered 501(c)(3)’s that the term “Nonprofit” has almost become synonymous with the term “501(c)(3) Organization.” In reality, however, there is a difference between a Nonprofit Entity and an IRC Section 501(c)(3) Organization. The experienced Scottsdale Arizona nonprofit lawyers at Lotzar Law Firm, P.C. can assist you in taking care of filings with the IRS so you can get Tax Exempt Status for your organization.
Understanding the Difference Between a Nonprofit Entity and an IRC Section 501(c)(3) Organization
Internal Revenue Code section 501(c)(3) is just one of many sections of the IRS Code that allows for an entity to be classified as a nonprofit and thus to become Tax-Exempt. Any organization or entity that exists for a purpose other than making money can be classified as a nonprofit, but the organization must fall within a specific section of the Internal Revenue Code to be granted Tax-Exempt Status.
Section 501(c)(3) status is available to charitable organizations or nonprofits that are established to serve a religious, literary or scientific purpose. There are numerous other sections that exist for other types of non profits that wish to become Tax-Exempt Organizations. For example:
- Employee Benefit Associations or Funds may apply for Tax-Exempt Status under IRC section 501(c)(4), 501(c)(9) and 501(c)(17).
- Fraternal Societies may apply for Tax-Exempt Status under IRC section 501(c)(8) and 501(c)(10).
- Veterans organizations may apply for Tax-Exempt Status under IRC section 501(c)(10) and 501(c)(23).
The IRS code sections 501(c)(3) to 501(c)27 all list different types of organizations that can be officially recognized as Tax-Exempt Nonprofits and the IRS website provides an overview of these different sections. Unfortunately, understanding how to comply with IRS rules to be officially classified as a nonprofit can still be very complicated. If you want to get Tax-Exempt Status for your business, call Lotzar Law Firm, P.C. today to speak with a Scottsdale Arizona nonprofit startup lawyer for help.
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