Not-for-profit corporation without 501c3

[jtolan1990]

I'm filing taxes for an organization I volunteer for.  It is registered as a domestic not-for-profit corporation in the state of New York, which ultimately makes it a C corporation.  It doesn't have a federal 501c3 status and uses a fiscal sponsor in order to receive donations.

I'm guessing because it's not a federal 501c3, I should file the taxes like a normal C corporation, but has anybody encountered this before?  It's not really a for-profit business, even though it is a C corp, but maybe that only matters for the state it's registered in, and not on the federal returns.  Anybody know which forms it should file with?

[MaryK4]

Your question is a bit vague and this area is very detail dependent, so please see (to get you started in the right direction) the IRS website:  Charities and Nonprofits and New York  Certificate of Incorporation for Domestic Not-for-Profit.

[jtolan1990]

Oh, yes, I should clarify that no one at the IRS or the NYS tax department is able to tell me which tax forms this type of organization requires.  There's no information on their websites that describes how to file taxes for a charity that is only registered on a state level, and not federally.  And nobody on their phone lines is legally allowed to tell an inquirer which forms they should use, because it constitutes financial advice.

[LeonardS]

C corporations can not file as a non-profit. Nonprofits operate under section 501(c) of the Internal Revenue Code. C Corporations pay taxes under Chapter C of the IRS tax code, which is where the name comes from.  

A not-for-profit corporation may be formed under the Not-for-Profit Corporation Law as a “charitable corporation” or a “non-charitable corporation” unless it may be formed under any other corporate law of New York State  Ref: https://Certificate of Incorporation for Domestic Not-for-Profit Corporations.

You are correct in that the answer to your question is based upon a legal decision.  The organization you are assisting should seek legal advice on how to structure their business.  Once this has been done then the appropriate tax returns can be filed.

[jtolan1990]

Let me just make sure I understand what you're saying, because I am pretty sure it matches what I thought was happening in here.

In the state of New York, when a business forms as a Domestic Not-For-Profit Corporation, that is a type of C corporation.  It states it very clearly on the incorporation documents.  My assumption, and I believe yours, is that because the entity does not yet have a federal 501c3 designation, despite being a type of not-for-profit in NY state, it is federally treated as a C corporation and would fill out a normal 1120.

My additional question that the NYS (and NYC) tax department cannot seem to answer is, are there different tax forms required for a not-for-profit corporation than for a for-profit corporation?  It would be easy to just do the CTs, since they line up very well with the federal forms we'll be filing, but clearly the state has a unique designation for this type of business, so it's strange that there isn't more guidance from the state tax department.

[LeonardS]

From the research I have done NYS requires nonprofits to submit Form 990 however this form can not be filed by a C Corp,  I have not found any information on filing requirements for a nonprofit organized under NYS Not for profit Corporation Law.  Again I would recommend that the organization you are assisting seeks legal advice from a qualified professional within NYS who is knowledgable in this area.