Reference no: EM133144278
Question - Robert Thompson has come or help. He is considering accepting a job with the Let's Read organization, which proclaims to be a public charity under Section 501(c)(3). Robert has heard rumors that the charity is not what it claims to be. He has tried to read Internal Revenue Service (IRS) Publication 557, Tax-Exempt Status for Your Organization, but he is more confused now than before. A meeting with Robert was on Monday to explain organizations that have Section 501(c)(3) status and he has provided some information about Let's Read and would like to analyze the information and explain the results. A guide is needed to assist Robert in his use.
This is the summary of information that Robert provided.
The Let's Read organization is a public charity under Internal Revenue Code (IRC) Section 501(c)(3). It had total support of the following:
United Way support $10,000
Grant from state 25,000
Grant from city 10,000
Contributions from individuals 261,000
Investment income 1,000
Revenue from sale of books 12,000
Total $319,000
$261,000 was received from contributors, $240,000 came from four contributors, each giving $60,000; the other $21,000 came from small individual contributions.
Respond to the following:
What calculates the total amount of support that qualifies as public support in meeting the public support test to escape private foundation status.
Is this organization considered a public charity? Why?
If the organization had received $200,000 from one individual and the remaining $61,000 from many small individual contributions, would the not-for-profit (NFP) entity still be classified the same to the second bullet point?