Can your contributions to a charity that has its IRS application pending be still tax exempt? The answer is that it depends on the final outcome and determination of the IRS. While an IRS application is pending for the charitable organization to receive its final tax exemption status, the organization can still treat itself and any contribution it receives as tax exempt. This is because while the IRS is sorting through the application and it is pending the IRS once the application is approved will recognize it back to the date that the organization was created.
There are particular tax forms that the organization will still have to file while the application is pending in order to comply with IRS regulations but meanwhile it will still be able to accept contributions. The catch is, though, that the contributors to the organization will not have an advance assurance that the contributions are tax-deductible because the organization application is still pending. Yet, if the organization finally qualifies for the exemption for the period in which the contribution was made, i.e., while the application is pending not before they applied, the contribution will be automatically treated as tax exempt for the donor.
However, if the organization does not qualify for the exemption, then whatever the donor gave to the organization will not be tax deductible. Therefore, you can give to a charity while its exempt status is pending but, if it is a large amount of money or a large item that was donated, you will have to keep your fingers crossed that their application is approved.
If you need to discuss non-profit organizations and tax-exempt entities in Miami-Dade, Broward, Monroe, Collier or Lee County Florida, schedule a consultation with the experienced attorneys at EPGD Business Law. Call us at (786) 837-6787 or e-mail us to schedule a consultation.
*Disclaimer: This blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*