Do you need to better understand 501(c)(3) regulations but don’t know where to begin? Especially if you’re based in Chicago, it’s a daunting task to take on. Navigating nonprofit regulations can be frustrating and complex and finding the right counsel to help you is absolutely critical.

Fortunately, UpCounsel is available to provide access to experienced lawyers with specialized experience in 501(c)(3). More than a one-time counsel session, UpCounsel is sure to have everything you need for a full legal team, whether you are a small business or Fortune 1000 company. Here you can find high quality attorneys who regularly assist companies in nonprofit regulations - all with an average of 14 years of experience.

So what, exactly, does 501(c)(3) mean and how does it pertain to you? What’s included in 501(c)(3) regulations, and how can UpCounsel help make sure you’re navigating them correctly? Let’s take a look.

What is 501(c)(3)?

501(c)(3) is a subsection of the U.S. Internal Revenue Code created to provide tax-exempt status to qualified charitable, educational, religious, literary and other organizations. Simply put, 501(c)(3) organizations can receive tax deductions from donors, and the organizations are also exempt from paying taxes.

In order for an organization to qualify as a 501(c)(3) nonprofit, it must meet several conditions:

It must be organized and operated only for exempt purposes specified in the code.

It must not be organized or operated for the benefit of private interests.

Its net earnings may not benefit any private individual.

Other Internal Revenue Code Section 501(c)(3) organizations, such as charities and educational institutions, may not be financially supported by the organization outside of certain exceptions.

Organizations must also meet specific asset, income and operational requirements, as well as submit an IRS application known as a Form 1023, as well as other documents.

Staying Compliant with 501(c)(3)

Since 1965, the federal government has limited the amount of income that a 501(c)(3) organization can earn in unrelated business income. The establishment of certain avenues—such as collaborative agreements with other organizations—has made it possible for 501(c)(3) organizations to receive additional income.

However, it’s important to follow proper rules and regulations surrounding unrelated business income, or else there are major consequences for negligence. Charitable institutions must adhere to rules such as maintaining a board of directors and filing an annual report.

Organizations must also ensure that they’re properly classifying 501(c)(3) expenses, as some may involve taxable income and must be allocated accordingly. The elegant legislation enacted by the Internal Revenue Code gives organizations more freedom than it does restrictions. Because of this, it is essential to have clear understanding of compliance regulations and to stay away from any potential legal problems.

Work with UpCounsel for Benefits of 501(c)(3)

UpCounsel is a great source for quality legal counsel on the topic of 501(c)(3). They have access to Chicago-based lawyers with in-depth knowledge of local regulations, so you’re sure to get the legal advice your organization needs.

UpCounsel is founded on the core belief that access to high quality attorneys should always be at your fingertips. Our nationwide network of expert attorneys is trusted by businesses and organizations of all sizes and our attorney profiles and customer reviews make it easy to find the right counsel.

From nonprofit compliance to legal operations, UpCounsel’s team of experienced attorneys can help you get the advice you need at an affordable price. And with our customer satisfaction guarantee, you have the peace of mind of knowing you’ll get the legal help you require.

Make the Most of Your 501(c)(3) Regulations

Organizations that obtain 501(c)(3) status can experience a wide array of benefits. That said, making sure your nonprofit organization is properly operating in accordance with all laws, rules and regulations governing nonprofits can be confusing and overwhelming.

The right legal partner who fully understands local regulations can help you make sure your organization isn’t inadvertently flouting the law. With UpCounsel, you can connect with experienced lawyers to ensure you’re always compliant. Additionally, our network of legal professionals respects the unique demands of nonprofits, so you can rest assured you’re receiving tailored counsel.

Topics:

501c3,

nonprofit regulations,

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