[WikiEN-l] World domination. Step one

Thu Jul 10 01:24:46 UTC 2003

A non-profit can accept donations without a 501(c)(3) status,
it only means the donations are not tax exempt for the donor
if the 501(c)(3) status is not given (and maybe the organization
will have to pay taxes if it does not spend the donations on some
valid expense within its purpose). As well any determination letter
is usually valid retroactively from the date the organization came
into existence so if any tax payments are sent to the IRS to make
sure the organization is not penalized the money is refunded when
the exemption is recognized.  See IRS Pub. 557 at page 4, col. 3
(Rev. May, 2003).  This is true if 1023 is filed within a 15 month
period from formation (page 17).

In any case if the organization has a clear exempt purpose and
does not receive more than $5,000 in income per year. See
IRS Pub. 557 at page 18, col. 2.  The word foundation does not
refer to the use of this word in the organization's name, 
'foundation' is a term of art used in tax law to distinguish public
charities from organizations that are private foundations that fail
the public charity support test (page 27) or are a 509(a)(1)
organization (page 30) and most likely your organization is
a "publicly supported organization" under that category (page
31-34).

Therefore you "foundation" does not necessarily have
have to apply to the IRS for exempt status if it is not endowed
by an individual but receives wide public support. You can start 
receiving donations right away in such a case.

Unless, of course, the reason for starting this not for profit
organization is to obtain an excess benefit.

If you don't believe me (and why should you believe me, I am
only a not-for-profit organization lawyer, why would I know 
anything?) you can check this by looking at the IRS publication
http://www.irs.gov/pub/irs-pdf/p557.pdf It does not seem
to me to be intelligent to assume that you cannot accept donations
when there are indications you possibly can. (this is not a solicited
legal opinion, if you wish a legal opinion, please contact my office
as I have previously stated I would be willing to do pro bono work
for your folks).
Good luck.
alex756
----- Original Message ----- 
From: "Christopher Mahan" <chris_mahan at yahoo.com>
To: <wikien-l at wikipedia.org>
Sent: Wednesday, July 09, 2003 7:54 PM
Subject: Re: [WikiEN-l] World domination. Step one

> 
> --- Jimmy Wales <jwales at bomis.com> wrote:
> > webmaster wrote:
> > > ...What's being done about this?  What can I do to help?  I know
> > >there is a website for a company somewhere that will do donation
> > >transactions for non-profits for free (I'll go look into that
> > now.)
> > >Anyhow, who is working on this, and what can I do to help move it
> > >along?
> > 
> > Well, you could forward any information you find on to me, but
> > there's
> > not a lot we can do.  We're waiting for the IRS to say that we're a
> > 501(c)(3), and they are waiting on me to finish the application. 
> > :-)
> > 
> > --Jimbo
> 
> 
> We're also waiting for you to finish the application :-)
> 
> 
> =====
> Christopher Mahan
> chris_mahan at yahoo.com
> 818.943.1850 cell
> http://www.christophermahan.com/
> 
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