Legal Question in Tax Law in Illinois

Re: 501(c)(3) - (was 5013c)

If a charitable organization expects to have no more than $5,000 per year of gross receipts (including gifts) then it is not required to apply for recognition from the IRS in order to qualify as a tax-exempt charitable organization described in section 501(c)(3) of the Internal Revenue Code (the �Code�) to which tax deductible contributions may be made. However, all Illinois charities must register with the Illinois Attorney General's office, file annual financial reports. If an organization will not be independently soliciting funds (and therefore does not need to qualify as an organization that can receive donations that are tax-deductible to the donor) it can usually qualify as a tax-exempt organization under section 501(c)(4) or 501(c)(7) of the Code without applying to the IRS. These sorts of tax-exempt social welfare organizations and clubs are also excused from the Illinois registration and filing requirements and�if they have $25,000 or less in gross receipts for a year�from the requirement to file a federal tax return.

For more information, you should obtain a copy of IRS publication 557 or visit the IRS website at http://www.irs.gov/charities/article/0,,id=96109,00.html