Most states and even some localities require nonprofits to register or obtain permits for the privilege of asking their residents for donations. This type of fundraising activity is called “charitable solicitations” and is heavily regulated to prevent fraud and harassment of the public. While it varies by state, county, and city, any activity that invites someone to …
Any organization that has received an IRS determination letter recognizing it as a 501(c)(3) organization may offer donors a tax deduction for their donations. However, for your donors to receive a tax deduction, your nonprofit must properly acknowledge charitable contributions it receives by following the requirements described below. What is a Donation Acknowledgment? As summarized …
Introduction A California Nonprofit Public Benefit Corporation is required to file several forms each year to remain in good standing as a nonprofit corporation and maintain 501(c)(3) status. This blog summarizes the main annual filing forms, which forms to file, due dates, and potential ramifications for failure to comply. Why These Forms Are Crucial The …
Review of Unrelated Business Taxable Income While 501(c)(3) organizations are generally recognized as tax-exempt, they may have to pay tax on income derived from certain revenue-generating activities (as opposed to income from donations) known as unrelated business taxable income (UBTI). Income may be considered UBTI if it (1) is from a trade or business, (2) …
What is unrelated business taxable income (UBTI)? Although tax-exempt organizations (referred to herein as a “nonprofit”) are generally exempt from federal income tax, they may have to pay income tax on net income derived from business activity that is unrelated to their tax-exempt purpose, called “unrelated business taxable income” (UBTI). This type of tax is …
What is Political Campaign Intervention? Participating in, or intervening in, any political campaign on behalf of, or in opposition to, a candidate for elective public office is called “political campaign intervention.” 501(c)(3) tax-exempt organizations are strictly prohibited from engaging in any political campaign intervention, direct or indirect, including supporting or endorsing a candidate for public …
