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DocuSign Envelope ID: 23D00540- 4B67- 4A91- B622- 510CAEF24EEE <br />ATTACHMENT K <br />501(c)(3) and TAX EXEMPT STATUS <br />Orange County Department of Social Services <br />What is a Private Non Profit Agency? <br />Answer: A private non profit is an organization that is incorporated under State law and whose <br />purpose is not to make a profit, but rather to further a charitable, civic, religious, scientific, or <br />other lawful purpose. The Secretary of State's office grants corporate status to organizations in <br />North Carolina. <br />What is a 501(c)(3) designation? <br />Answer: When the agency becomes a state private non profit corporation, it can then apply for <br />501(c)(3) designation through the IRS. Once the IRS grants 501(c)(3) status, the organization is <br />exempt from certain taxes and any donations to the charitable organization are tax deductible. <br />Many individuals and organizations prefer to make donations to 501(c)(3) private non profits. <br />Who can obtain a 501(c)(3) designation? <br />Answer: Any organization or group can apply for 501(c)(3) status, provided their charter or <br />mission focuses on the non profit's objective. <br />Another option is to apply for a 509(a)(1) status which falls under the 501(c)(3) umbrella. Being <br />a 509(a)(1) designates an organization as a tax -free public charity that receives most of its <br />support from a governmental unit or from the general public. Becoming a 509(a)(1) provides <br />public recognition of tax- exempt status, advance assurance to donors of deductibility of <br />contributions, exemption from certain State and federal taxes, and non profit mailing privileges. <br />Organizations that typically qualify are churches, educational institutions, hospitals, and <br />governmental units. <br />To learn more about non profits, visit www.irs.gov, or call the tax- exempt helpline at 877-829 - <br />4933. <br />How does a Private Non Profit obtain Tax Exempt Status? <br />A private non profit must apply to the IRS for tax exempt status. To qualify, applicants must <br />complete and submit to the IRS Form 1023. Once federal tax exempt status is granted, the <br />private non profit applies for State tax exempt status by completing Form CD -435 and <br />submitting it to the N. C. Department of Revenue. <br />Please attach proof of 501(c) (3) or IRS tax - exempt status to this page. <br />