QUESTION
as a first year 501 c 3 organization with the gross receipt less than $7500 dollars can our sponsor still be exempt when making a donation?
Asked on Mar 15th, 2012 on Business Law - Pennsylvania
More details to this question:
Organizations Not Required To File Form 1023
Some organizations are not required to file Form 1023. These include:
¿ Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men''s or women''s organization, religious school, mission society, or youth group.
¿ Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later).
These organizations are exempt automatically if they meet the requirements of section 501(c)(3).
Private foundations. See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation.
1 ANSWER
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I think you are misstating the question you intend to ask. These issues are confusing and not easily understood, sometimes even by tax professionals. It appears that the question you intend to ask is not whether your sponsor is "exempt" but rather whether your sponsor is entitled to take a tax deduction for a contribution to your organization. The reason this question is germane is that your organization is exempt from having to file a Form 1023 and therefore will not receive a determination letter from the IRS both that it is exempt from taxes AND that contributions to it are deductible.
The deductibility of charitable contributions is determined by Section 170 of the Internal Revenue Code of 1986, as amended. In general, the deductibility of the donor's contribution does not depend on whether the donee has filed Form 1032 or received a determination letter. If the donee is organized and operated exclusively for charitable purposes, as a general matter, the contribution will be deductible.
Answered on Mar 15th, 2012 at 9:39 AM