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TexLaw, Attorney
Category: Business Law
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Experience:  Internationational Commercial Attorney
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My question concerning Non-profit organization. I have a non-profit

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My question concerning Non-profit organization. I have a non-profit mission organization,
It has been non-profit since 1984. I do not take any personal funds for living expenses,
car expenses, etc. Every penny goes to mission work on the field, some to help a person
take a mission trip, and some to the poor. We do have a tax number from the IRS that
we received at the time of our organization. I have never been contacted from the IRS
about a 501C. I register with the Secretary of State of Georgia annually, and have not
received any notices about a tax form from them. If I have the tax exempt number and
my income is under 5-10 thousand dollars annually.
Please let me know what to do? Thank you so much. Pat
Hi Pat,

You need to file a 501(c)(3) application in order for the corporation's profits to be considered tax free under federal law. Otherwise, the corporation's income should be treated as regular corporate income and the corporation must pay taxes accordingly.

Essentially, what's happened here is that you have flown under the radar with the IRS, and that is why you have not received any notifications from it regarding taxes due. Technically, your company owes taxes on all the money it has received, even if it has given it away. The corporation must obtain approval from the IRS as a non profit under 501c3 before the income it obtains is treated as tax free.

What you need to do is go ahead and submit this 501c3 application (see If disclosure of past income is required, you should consult with an accountant prior to making the disclosure, as it may be a better idea to simply start a new company under which you file for 501c3 status.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
TexLaw and 2 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.

Right now I don't thank you, I will try your advise.