discuss: LDP can't get non-profit status without incorporating
Subject:
Re: [discuss] LDP can't get non-profit status without incorporating
From:
David Lawyer ####@####.####
Date:
3 May 2007 10:42:09 -0000
Message-Id: <20070503104220.GE2208@davespc>
Sorry that this message is 2 weeks old, but it's one that got lost.
It happens all the time when I leave the computer terminal before I've
finished an email and then my wife turns off the power, and then
something else come up and I forget that I hadn't finished the letter.
It reappears when I attempt to recover a file using vim from ~/tmp.
So here it is.
On Tue, Apr 17, 2007 at 11:24:26PM -0700, Rick Moen wrote:
> Quoting Stephanie Erin Daugherty ####@####.####
> > As for other benefits, the LDP once incorporated would be free to
> > pursue 501(c)3 status, allowing it to take tax deductible donations
> > and exempting it from income tax.
>
> 1, As a practical matter, LDP is miles away from having to worry about
> having (USA) income taxes assessed against it -- which should be
> apparent from the fact that IRS doesn't even want to get reports from
> groups bringing in less than $25,000/year in gross revenues.
The $25,000 exemption is for 501(c)3 organizations. It's only $5,000
if you are not 501(c)3 but would be eligible to become 501(c)3. At
least this was my take on it and I don't have the citations. I've
seen others assert $25,000 even if you're not 501(c)3 but I think this
is in error. An interesting question is what a non-501(c)3
unincorporated organization is supposed to do if they have over $5000
gross income? I suppose that they need to pay income tax on it but
what form needs to be filed and what is the venue?
> 2. Many of the individuals and groups who might consider making
> monetary (and similar) contributions to LDP don't need it to be
> 501(c)(3), for those contributions to be tax-deductible, because they
> are claimable as some other type of expense, e.g., marketing expenses or
> some other business category.
>
> > A corporation also provides one other benefit - continuity of
> > operations.
>
> It's a misconception that it even helps. Groups that don't have their
> acts together aren't necessarily rendered any stronger by incorporation,
> and in fact it adds an extra layer of burdens on the staff, in the form
> of the annual mandatory IRS filings.
Amen. I was a member of a mismanaged but incorporated church. When
key people died, got fired, or resigned under threat of being fired
(including ministers) there was serious loss of continuity. The
organization even forgot that it partly owned certain parcels of real
property and eventually lost them without even knowing they had lost
them (were it not for me when I later tracked them down from info in
the archives). Even now almost no one knows this happened since this
info was suppressed. One parcel turned out to be worth millions.
[snip]
David Lawyer
