[clue] 501(c)3

F.L. Whiteley techzone at greeleynet.com
Fri Feb 17 07:15:21 MST 2012

1.  Richmond Tea Party applied for a 501(c)(4) application.  That's social
welfare designation.  The local Tea Party's are probably 527 eligible, like
your local Democratic or Republican parties. IMVHO 501(c)(4) is probably not
acceptable.  Clearly they've not provided sufficient justification.
2.  There are 28 501(c)(X) tax designations, all exempt from federal income
taxes on income/receipts related to their stated purposes.  Unrelated income
remains taxable.
3.  Only one category is charitable, 501(c)(3), the stated purpose must
answer the question "what is the public benefit?" which is the core reason
for existence, the public benefit.  All others are mutual benefit
organizations, thus not charitable.  Quick and dirty see
4.  The IRS only implements the program.  Congress is responsible for the
tax code.  If tax credits for donations were allowed, rather than
deductions, the 501(c)(3) could be an very democratizing social dynamic. One
purpose of tax exempt organizations is to bring to communities needed
opportunities and services while keeping the size of government at bay.  A
very good idea.
5.  I sit on the national board of a 501(c)(3) as a Vice Chair and
Secretary.  A committee I chair is assisting chapters of our organization
with their own determinations as they are not under our national umbrella.
Some chapters of organizations are able to act under national umbrellas.
One such is the Rocky Mountain Elk Foundation.  I also sit on the board of
my local computer users group.  When I was president, we successfully filed
for a 501(c)(3) determination.  I would do it a bit differently now that I
have some experience in such matters.
6.  I highly recommend the following two books for becoming an informed
board member of an organization acting as or seeking a 501(c)(3)
determination.  They are not how-to manuals, those are also available.  You
don't need a lawyer unless the local bar is willing to provide pro bono
advice, but a non-profit accountant may be useful, but only after you become
/047139727X, Starting and Managing a Nonprofit Organization, Bruce R.
prod10065&navCount=1&navAction=push> &navCount=1&navAction=push The Board
Member's Book, Brian O'Connell.
7.  FACT.  The National Football League is a tax exempt organization under
section 501(c)(6), as a business league.
8.  You can gain some insight into nonprofits, tax exempt organizations,
searches, and rules by becoming familiar with
    a.  www.irs.gov
    b. http://www.melissadata.com/lookups/np.asp register for more lookups
    c. http://www2.guidestar.org register for free to view Form 990's, etc
    d. Various Secretary of State business/corporate entity searches
Frank Whiteley
IANAL nor an accountant, just a volunteer

-----Original Message-----
From: clue-bounces at cluedenver.org [mailto:clue-bounces at cluedenver.org] On
Behalf Of M Paul Webb
Sent: Friday, February 17, 2012 06:26
To: CLUE's mailing list
Subject: [clue] 501(c)3

Here is an interesting news article on how the IRS can cause pain over
501(c)3 status, by making formal recognition difficult.

I just did a fast check on the internet, and apparently, the IRS says that
normally filing the form for formal recognition takes 4 hours to understand,
and 8 hours to fill out. I believe all the forms and information can be
found on line. Actually, I think it should be do-able, but it is just a
matter of time. I think I could invest some time on this, if there are
people who want to do it -- I mean working as a small group. Let me know.

(I don't think I understand who my e-mails are going to when I send them).



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