AERC and the IRS

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From: guest 
Email: guest@endurance.net

I'm no tax lawyer but....

The issue with the IRS and AERC's 501(c)3 tax status may be misinterpreted by the membership.

There are a number of 501(c)X types of classifications available from the IRS. Almost all of these classifications are TAX EXEMPT.

However, only one of these is ALSO tax-deductible which is important when those donating to the organization expect to write it off. This is the 501(c)3 type of corporation.

To be a 501(c)3 the corporation must declare itself as this type from the date of incorporation or within the following 18 months. It is difficult/impossible to alter an existing organization from any of the other 501(c) types to a 501(c)3 once the organization has existed.

It sounds like the IRS is declaring that AERC will continue to be tax-exempt (which is no big deal since it is a non-profit org), HOWEVER, it sounds as if the IRS is demanding that AERC downgrade from a tax-exempt AND tax-deductible organization to merely that of tax-exempt due to the method in which AERC has been operated.

If no one currently donates goods, services or funds to AERC expecting a write off then there will be little effect on the organization and its income.

Be warned that once the tax status is changed from a 501(c)3 to another 501(c) type there will be no going back to the tax-deductible non-profit status for AERC.