In the US, nonprofit organizations are given the 501(c)(3) tax-exempt status. By exempting them from federal income tax, 501(c)(3) seeks to promote the expansion of charity organizations that benefit the public. Organizations that meet the requirements and request for recognition are given this status by the Internal Revenue Service (IRS).
An organization must be set up and run for at least one of the following objectives in order to qualify for 501(c)(3) status: religious, charitable, scientific, testing for public safety, literary, educational, or to promote amateur sports competition on a national or worldwide scale. The organization’s actions must also be largely focused on achieving these exempt goals.
Being a 501(c)(3) organization has various advantages, one of which is that contributors can donate to the organization tax-deductible. This promotes charitable giving from individuals and businesses, increasing the resources available to nonprofit organizations. Additionally, 501(c)(3) organizations are eligible to seek for grants from foundations and other organizations whose funding depends on them having tax-exempt status.
Do student loan debts expire after seven years?
No, after seven years student loans do not expire. Federal student loans do not often fall within the statute of limitations, which means that the government can pursue debt collection at any time. However, there are some situations when the debt can be dismissed or forgiven, such as through Public Service Loan Forgiveness (PSLF) or a disability discharge.
A borrower must make 120 qualifying payments while employed full-time by a qualifying company to be eligible for Public Service Loan Forgiveness (PSLF). The payments must be made according to a qualified repayment plan, albeit they do not need to be completed in a straight line. To repay the debt in full, the borrower must make 120 payments over a period of 10 to 25 years, depending on the repayment option they choose.
A borrower must work full-time for a qualifying employer for at least ten years in order to be eligible for Public Service Loan Forgiveness (PSLF) and make qualifying payments on their federal student loans at the same time. The ten years of employment must have been with a qualifying employer, though they do not need to have been consecutive.
Organizations classified as 501(c)(3) are tax-exempt nonprofits that are set up and run for religious, philanthropic, scientific, literary, or educational purposes. Their ability to lobby and engage in politics is constrained.
On the other hand, 501(c)(7) organizations are tax-exempt social clubs like fraternal societies and country clubs. They do not have the same prohibitions on political and lobbying activity as 501(c)(3) organizations, nor are they needed to be founded for charitable reasons.
A 501(c)(3) organization may give to a 501(c)(6) group, but only if the donation is made for philanthropic or educational purposes and not for political or personal gain. The 501(c)(3) organization must also make sure that the donation is consistent with its own philanthropic objectives and won’t compromise its ability to claim tax-exempt status. To guarantee compliance with all applicable laws and regulations, it is advised to speak with a tax expert or lawyer.