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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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is there an advantage in being both a 501c3 and a 501c19

Resolved Question:

is there an advantage in being both a 501c3 and a 501c19
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

So far there is no tax advantages of being 501c3 or a 501c19, but there are different rules and requirements. The organization may generally qualify for both statuses.

 

501(c)(3) - An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes: Religious, Charitable, Scientific, Testing for public safety, Literary, Educational.
The organization must file its application for recognition of exemption on Form 1023.

Contributions to domestic 501(c)(3) Organizations, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return.

501(c)(19) -Veterans' Organizations - A post or organization of past or present members of the Armed Forces of the United States may file Form 1024 to apply for recognition of exemption from federal income tax.

Donations to war veterans' organizations are deductible as charitable contributions on the donor's federal income tax return. At least 90% of the organization's membership must consist of war veterans. The term war veterans means persons, whether or not present members of the U.S. Armed Forces, who have served in the U.S. Armed Forces during a period of war (including the Korean and Vietnam conflicts, the Persian Gulf war, and later declared wars).

 

See more details in IRS publication 557 - www.irs.gov/pub/irs-pdf/p557.pdf

Let me know if you need any help.

 

Customer: replied 4 years ago.
Relist: Incomplete answer.
The reply was not responsive to the question. I needed to know the advantages if any, or in the alternative, the disadvantage of being both 501c3 and c19. I did not need an answer describing in brief detail the definition of c3 and c19.
Expert:  Lev replied 4 years ago.

There is no tax advantages of being both 501c3 and 501c19 organization.

As long as the organization qualifies for either status - it will get exemption from federal income tax.

 

For donations to be deductible as charitable contributions on the donor's federal income tax return - 501c19 has additional requirements mentioned above.

 

If you are looking for any specific advantages or disadvantages - please clarify.

 

Customer: replied 4 years ago.

My organization is already a c19, but is thinking about becoming a c3. Both types offer specific advantages individually. However, we are not certain if it is advantageous to become both or convert to just c3 to be able to accept charitable contributions.

Expert:  Lev replied 4 years ago.

As long as the organization has either status - it is eligible to solicit and accept charitable contributions - so far having both statuses will not provide any additional advantage.

If you plan to drop 501c19 in future - and want the organization to be treated under 501c3 status - you might obtain both the second status - but tax wise - there is no any additional benefits

 

As I mentioned - the 501c19 organization has additional requirements for donations to be deductible as charitable contributions on the donor's federal income tax return - at least 90% of the organization's membership must consist of war veterans.

In case your organization doesn't met this test or will not met in future - having 501c3 status will protect your donors.

 

However - as long as the organization has either status and donations are deductible for donors - having both statuses instead on either one - will not give any additional benefits.

 

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22763
Experience: Taxes, Immigration, Labor Relations
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