You are Wrong wrote:
501C3 wrote:I most certainly do know what a not-for-profit is and know that NYRR is registered as one. However, that doesn't change the fact that it is run as a FOR profit entity and its tax exempt status is bogus. There are a ton of entities that are registered as tax exempt that shouldn't be and NYRR is no different than any of those. As I mentioned above, I think that we now are going to see even more sham tax exempt entities as for-profit event companies will being changing to tax exempt in order to continue to "hire" volunteers for free and not have to worry about getting sued.
Since the IRS obviously granted NYRR with the tax exempt status (which is not automatic), how does it not qualify as a 401(c)(3)?
So that you know what it means to be tax exempt under 401(c)(3), below is what it means
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.
It has nothing to do with whether the organization ends their fiscal year in the red or black and NYRR has no shareholders or owners like for profit businesses do to distribute any earnings. Other than that, I am not sure what you mean that are "run like a FOR profit entity" I work with both for profits and not for profits and many not for profits would serve their communities and constituencies better if they were run like for profit entities.
In your example, the for profits that donate to soup kitchens or Habitat for Humanity are contributing to existing 401(c)(3)s (Habitat and the soup kitchens (or whatever church or other organization runs the kitchens)) and those for profits have shareholders themselves. They obviously get to write off those donations but the for profits have nothing to do with the business of the soup kitchen or Habitat.
It seems as though there is some debate about the tax status of the group.
As mentioned above, even for-profit groups can be exempted from the FSLA under 29 U.S.C. 213(a)(3)(A) if it is "an amusement or recreational establishment," including "amusement parks, carnivals, circuses, sports events. . . "