One of the great misconceptions surrounding nonprofit corporations is the idea that they all qualify for tax exemptions. The truth is that jumping through all the hoops to obtain tax-exempt status is hard work and many nonprofit organizations pay taxes like their for-profit counterparts. For those that do qualify for tax-exempt status, the most common designation, known as a 501c3 status, is available for entities that qualify as public charities and private foundations. This one designation, however, doesn’t come close to providing options for the wide range of nonprofit organizations in existence. To accommodate many other kinds of nonprofit organizations seeking tax exempt status, the IRS has created 33 different tax-exempt statuses for which nonprofits can apply. Download the article to learn more.
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