The goals of a not for profit organization are usually to raise money to provide services to someone else.  However, just because you you refer to your business as a “Not for Profit,” it doesn't mean that it’s tax exempt.  To be consdered a true tax free organization, your organization must file the appropriate documentation and be approved by the Internal Revenue Service (IRS).

The federal tax law offers many tax benefits to those organizations that have been recognized as a legitimate not for profit organization, falling within section 501c3 of the Internal Revenue Code. The code requires that if an organization would like to take advantage of the “tax free” benefits that are available, they have to comply with the code and obtain the official tax exempt status.

For the officially tax exempt organization, you now need to be concerned with restricting your activities to be in compliance with IRS guidelines of operating, so you can maintain and keep your tax exempt status. This is imparative, as IRS rules are strict and expect them to be adheared to.

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