Charitable Organizations

In Connecticut, most charitable organizations operate as non-stock corporations with tax exempt status under section 501(c)(3) of the Internal Revenue Code. Virtually all legitimate American charities are classified as “publicly supported organizations” under section 501(c)(3) of the Internal Revenue Code. Generally, these are organizations which receive at least one third of their financial support from donations from the public. This is contrasted with a private charitable foundation, which can receive its financial support from as little as one individual or entity. It is preferable for an organization to be a publicly supported organization because such an entity is not subject to certain federal excise taxes and restrictions which are applicable to private charitable foundations. Under limited circumstances, an organization which does not meet the one third public support test can nonetheless have the federal tax exemption and legal benefits of a publicly supported organization. Generally, this is a charity which is classified as “supporting organization” under federal tax law. A supporting organization is an entity which exists only for the purpose of providing financial support to one or more publicly supported organizations. In addition, a supporting organization must comply with other rules, including rules relating to its relationship to the publicly supported organization it supports.

Federal and State income tax exemption for a publicly supported organization is not automatic. Your non stock corporation must be properly formed under Connecticut law and the formation documents must contain the precise language required by the Internal Revenue Code, Treasury Regulations and Revenue Rulings. If exempt status is not obtained in a timely manner, there are serious negative ramification to donors to the entity and potentially the organizers as well. In addition, organizations under section 501(c)(3) of the Internal Revenue Code must file IRS form 990 or 990-EZ on an annual basis. You need a competent tax attorney to form a non stock corporation which will be the publicly supported organization, prepare and file IRS form 1023 and to respond to further inquiries from the Internal Revenue Service. Attorney Rubino has successfully formed many charitable organizations under Connecticut law and has prepared and filed IRS form 1023 on behalf of those charitable organizations, resulting in tax exempt recognition for those organizations under section 501(c)(3) of the Internal Revenue Code. He can competently and professionally prepare and file all documents required to form and gain section 501(c)(3) tax exempt recognition for your private charitable foundation.

Attorney Rubino can assist you in every aspect of establishing and operating a charity as a publicly supported organization including:

  • formation of Connecticut non-stock corporations
  • drafting of all corporate documents with IRS required provisions
  • preparation of IRS application for Section 501(c)(3) tax exemption, IRS form 1023
  • legal and tax counsel to ongoing operations of a publicly supported charity

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