[CCWG-Accountability] Regarding Non-profit and public-benefit legal structure

[Greg Shatan]

Carrie:

That's exactly how it works, and the only way it works.  Remember that the
US is a federal system with two pertinent tiers of laws -- state and
federal.

Organizations are created under state law, not under federal law (with
extremely rare exceptions).  Federal tax exemption is handled (by
definition) at the federal level.  A not-for-profit organization must first
incorporate under state law, and then proceed to seek a federal tax
exemption as a non-profit under 501(c)(3) (or other relevant subsections
for particular types of organizations).

In other words, an organization cannot apply for federal tax exemption
under 501(c)(3) *until* it has incorporated as a non-profit under the law
of a state of the U.S. [While there are organizations other than
corporations that may qualify for federal tax exemptions, such as trusts
and "community chests," they are not relevant to this discussion.]

Hope this helps.

Greg Shatan




On Thu, Jan 8, 2015 at 8:02 AM, Carrie <carriedev at gmail.com> wrote:

> Thank you Bruce. But according to Ed 's California corporation
> registration number they have registered already as a ca corp. please
> explain how this occurs being a corp on CA at the same time registered as a
> non profit w the IRS ?
>
> Sent from my iPhone
>
> > On Jan 8, 2015, at 7:57 AM, Bruce Tonkin <
> Bruce.Tonkin at melbourneit.com.au> wrote:
> >
> > Hello Edward,
> >
> >>> I'm unaware of any current plan to shift ICANN status from non-profit
> to profit, although some have called for such a change (see, for example:
> http://thehill.com/blogs/congress-blog/technology/227726-icanns-number-is-up
> ).
> >
> > That is right - there is no plan from either the Board or staff to
> change from being a non-profit entity, and I haven't heard any SO or AC
> make that suggestion either.
> >
> >
> > Regards,
> > Bruce Tonkin
> >
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