Nonprofit Law/Transfer of money

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Question
Mr. Mechanic,

I am the founder of a 501c3 focused on improving children's health through education. We have raised funds to send money to India for a project there; however, we have not obtained Foreign Contributions Regulation Act (FCRA) status at this point, an Indian government regulatory status allowing non-profits to receive foreign donations. I have three questions around the legality of money transfer into India for charitable purposes:

1) The FCRA states that a non profit cannot receive foreign donations without FCRA status. However, it doesn't detail if a foreign organization can open a bank account in India without this status. Do you know if that is the case?

2) Can Indian citizens transfer money on behalf of the organization while FCRA status is pending?

3) What due diligence, if any, is needed from the organization end when sending money for charitable purposes out of the US (for tax purposes or otherwise)?

Thank you in advance for your help and your overall willingness to help, it is much appreciated.

Best regards,
Priyank

Answer
I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. I will not, therefore, be commenting about Indian laws.  However, see the IRS publication at
http://www.irs.gov/pub/irs-wd/0504031.pdf for details about international grants to and international activities of U.S. exempt organizations, and, especially page 3-4 about grants to foreign organizations starting on page 3 at "Deductibility - Control Rules".

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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