Non-Profit Accounting
How does my business qualify to be a Nonprofit Organization?
In order for a nonprofit organization to qualify for
nonprofit status it must fit into one of the categories in Section
501(c) of the Internal Revenue Code. All of these qualification requirements
must be met and upheld in order to avoid termination of nonprofit status.
(Link to Section 501 (c))
R.E.J’s Accounting and Tax
specialties are in 501 (c) 3 and 501 (c) 7.
501(c)
3 organizations are usually referred to as charitable
and must not be organized or operated
for the benefit of private interests. No part of
a section 501(c) 3 organization’s net earning may inure
to the benefit of any private shareholder or individual.
If the organization engages in an excess benefit
transaction with a person having substantial influence,
an excise tax may be imposed on the person
and any organization managers agreeing to the transaction.
Also 501(c) 3 organizations are restricted by how much
political and legislative
lobbying activities they may conduct.
501 (c)
7 organizations are permitted to receive up to 35% of
its gross receipts, including investment income
from outside its membership without losing its
tax-exempt
status.
However, 15% of the organization’s gross receipts
may be derived from the use of the organization’s
faculties by the general
public.
If Interested Contact us
734.284.8833
e-mail
|
