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Discuss how tax-exempt status is granted to public charities, private foundation

The governing body that is tasked with the selection of criteria for granting tax exempt status is the IRS. The IRS however, decides how different organizations and charities can be exempted from paying taxes. Some Pay For Dissertation organizations that have the tax-exempt status include public charities, private foundations, and commercial organizations. Under the Internal Revenue Code, for an organization to have tax-exempt status, it must be organized and operated exclusively for exempt status as outlined in section 501(c)(3). This essay discusses Best Paper Writing Service. the requirements for tax-exempt status to public charities, private foundations, and commercial organizations.

 

 

Private Foundations

            A private foundation may have the tax exemption status if it is subject to tax on net investment income. Furthermore, the contributions by the donors are deductible up to 50 percent of the donors’ gross income. In addition, a privateDo My Paper.  foundation may receive donation funds from another private foundation if it has no control over it (IRS).

Public Charities

Public charities are organizations that are operated exclusively for exempt purposes. For an organization to be a public charity, it needs to adhere to the following criteria;

  • Not operated for purposes of private interests
  • Organization’s earnings must not inure to any shareholder
  • In the event that the organization is engaged in an excess benefit transaction with an individual of undue influence, then an excise tax must be imposed on the organization’s leaders in the deal as well as the individual.
  • Restricted from the political and legislative acts (IRS).

Commercial Organizations

For commercial organizations, nonprofit organizations may have tax exemption status. They however must adhere to the following criteria;

  • Organized and operated exclusively for charitable, scientific, or religious purposes
  • Organization’s earnings must not inure to any shareholder (IRS)

Published by Andrew Author at Best term paper site, paper writing service, online assignment help and Dissertation writing service

 

 

 

 

 

 

Works Cited

IRS. Exemption Requirements – 501(c)(3), https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations. Accessed 14 November 2019

 


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