What is a 501(c)(3)?
Excerpted from: https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-section-501-c-3-organizations
I encourage you to click all the links, explore and then think about if FDMG, as it has been explained to you, would qualify for a 501(c)(3). Please pay attention to the following items in particular:
Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings 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 over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more Information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.
Keep in mind that this video was uploaded on January 19, 2015. As you listen to the video, note that Umar tells the audience that he doesn't have tax-exempt status yet, but will have it by the end of the year.
Did he mean the calendar year or a fiscal year? Note that a fiscal year and an calendar year are not necessarily the same. For example a fiscal year can be from July 1, 2015 until June 30, 2016.
Please note that we are now coming to the end of the calendar year of 2016.
I encourage you to click all the links, explore and then think about if FDMG, as it has been explained to you, would qualify for a 501(c)(3). Please pay attention to the following items in particular:
- an organization must be organized and operated exclusively for exempt purposes set for in section 501(c)(3).
- none of its earning may inure to any private shareholder or individual
- the organization must not be organized or operated for the benefit of private interests
Exemption Requirements - 501(c)(3) Organizations
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings 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 over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more Information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.
Page Last Reviewed or Updated: 28-Jun-2016
Keep in mind that this video was uploaded on January 19, 2015. As you listen to the video, note that Umar tells the audience that he doesn't have tax-exempt status yet, but will have it by the end of the year.
Did he mean the calendar year or a fiscal year? Note that a fiscal year and an calendar year are not necessarily the same. For example a fiscal year can be from July 1, 2015 until June 30, 2016.
Please note that we are now coming to the end of the calendar year of 2016.
Questions
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| NOTE THE DATE OF THIS POST |
- How long had Umar been collecting donations before the date of this video?
- What is the tax-exempt status of Umar and the FDMG now?
- And if he has the appropriate tax-exempt status, why would he use GoFundMe to collect donations?
- If his organization is indeed a nonprofit, why doesn't his GoFundMe has a status as a charitable account?
- Do his donors receive receipts that can be used for tax purposes?
- Can FDMG Academy qualify for tax-exempt status, since it would be deemed discriminatory, by his own admission?
- If his organization is listed as a nonprofit as of June 9, 2014, when was the video actually recorded (and not uploaded)?
Sometimes, owning a business or not, we still need to manage our income, especially when it comes to taxes and that’s the hardest part. Hiring a tax advisor will be a good step to start when you have to deal with small business tax but it is also effective whether your purpose is to manage personal income or manage a business. Thank you for sharing your thoughts! Would love to see more updates from you.
ReplyDeleteThanks for reading. Your thoughts were well-expressed without animosity. That is appreciated. Keep reading the blog and feel free to comment as you wish.
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