Chapter 6
Adhering to Nonprofit Status Requirements
IN THIS CHAPTER
Fulfilling public disclosure requirements
Avoiding trouble overpay and politics
Sending Form 990 to the IRS annually
Filing timely state and local reports
Nonprofits are private organizations, but because they are awarded special tax status and are acting on behalf of the public, they’re required to disclose more information than privately held for-profit companies. Nonprofit status is a privilege that requires due diligence in all areas of government expectations. The IRS determines whether your nonprofit is authorized to be a public charity.
One way to think about it is to compare nonprofits to companies that sell shares of stock to the public. These companies must follow the rules and regulations set forth by the Securities and Exchange Commission (SEC) about disclosing financial information. Nonprofits in the United States and its territories must follow the rules of the Internal Revenue Service (IRS) to make financial information available for public scrutiny. In some cases, state, territory, and local governments ...
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