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You are here: Experts > Real Estate > Tax Planning: U.S. > Nonprofit Law > 501(c)(3)
Expert: Harvey Mechanic
Date: 5/9/2008
Subject: 501(c)(3)
Question
QUESTION: Have a friend who had a 501(c)(3) and gave it to another person to use. Is that legal? I am a paralegal and have had some experience with non profits. Seems to me they are more like an license to serve alcohol -- specific to the entity that made the application... thanks.
ANSWER: This forum is only for federal tax questions regarding 501(c)(3) public charities as I have explained in my profile. It appears that a 501(c)(3) organization has allowed certain activities under its corporate name. It would depend upon the activities. However, your question about liquor license possible violation is an issue of state law and the answer may differ in different states. I suggest that you check with your state's liquor control board.
Harvey Mechanic
Attorney At Law
Harvey108@hotmail.com
---------- FOLLOW-UP ----------
QUESTION: This 501(c)(3) was obtained for a faith based ministry -- not a corporation; then another person who has a faith based ministry and then a church began using the original 501(c)(3) simply by changing the address on the bank account. Can a 501(c)(3) simply change hands? Or, does each entity have to apply and obtain their own exemption?
Answer
A 501(c)(3) organization needs to have a structure. If it is not a corporation, let me know what it is. In any case, the changing of control of the organization is an element of state law. I can help you understand that. Yes, each entity needs to apply and obtain their own IRS exemption, but in your situation there may only be one entity that is changing directors.
Harvey Mechanic
Attorney At Law
Harvey108@hotmail.com
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