Blasingame Burch Garrard Ashley PC
Real Estate Business, Tax & Estate Planning Plaintiffs' Litigation
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Entity Formation

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Purchase & Sale of Business

Business Tax Planning

Employment Law

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Bank Representation

Creditor Representation in Bankruptcy

Business & Commercial Litigation

Elder Law / Disability Planning

Estate Planning

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Non-Profit Tax Exempt Organizations

Real Estate Litigation

Condemnation

Guardianships / Conservatorships

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Probate

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Specializing Attorneys

Beaird
Not-For-Profit and Tax Exempt Entities

The creation of a not-for-profit organization or tax exempt entity is a very complex area of the law. Many people confuse the two, but a not-for-profit corporation for state law purposes is not necessarily tax exempt in the eyes of the IRS. In order to be recognized as a tax exempt entity by the IRS, a very detailed tax form known as a Form 1023 (or a Form 1024, for certain entities) must be filed with the IRS. If this form is not filed, the entity may still be a not-for-profit for Georgia purposes, but will be subject to income taxation and will not allow a donor to the entity to claim a tax deduction.

There are also many variations within the area of tax exempt entities. For instance, some entities may be tax exempt from an income tax standpoint, but donations to these entities will not be tax deductible by the donor. Examples of these types of entities are social clubs and homeowners' associations. These entities can be contrasted against charities created under Section 501(c)(3) of the Internal Revenue Code, which are both tax exempt from an income tax standpoint and eligible to receive tax deductible donations. Charities must be formed for the benefit of the public, and cannot benefit only a limited group of people. There is a further distinction among charities. A so-called "public charity" that has a broad range of public support is entitled to more favorable tax treatment than a so-called "private foundation," which is subject to much greater scrutiny by the IRS and more stringent tax rules.

As can be seen from the foregoing discussion, creating a tax exempt entity is a matter in which you need expert advice. We at Blasingame, Burch, Garrard & Ashley are experienced in this area of the law and would be happy to assist you in any manner that we can.

 
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