Since the beginning of Russia’s invasion of Ukraine, many Americans have been interested in contributing money or supplies to the humanitarian efforts underway. Some may even consider starting up their own non-profit charitable organizations for such purposes. While this may be a noble cause, it is extremely important to ensure that your non-profit charity complies with all laws and regulations at both the Federal and State level, including tax-exempt status. Failure to follow the rules and guidelines set forth by the IRS may result in the loss of 501(c)(3) or tax-exempt status and can cause several tax issues for both the charity and its directors.
Additionally, most states require charitable organizations to register with both the secretary of state as a foreign, or domestic corporation, and with the applicable state agency overseeing charitable organizations. Consequently, it is critical that organizers of these types of establishments ensure they are properly registered with the applicable state agency and that they continue to file annual reports.
While contributing to humanitarian efforts or other charitable causes are important parts of a well-functioning society, it is even more important to ensure such activities are in accordance with the law to avoid negative tax consequences and protect the future of the charity. Before starting a charitable organization for these, or any other important purpose, we recommend that you speak to an attorney to ensure that these rules and regulations are followed and all other requirements under the law are met.