That is some pretty strong language, but illegal business controls can be an incredibly effective way to protect your business from fraudsters and thieves. Just like the government, some of the best known names in the business world have had their operations shut down by the IRS for failing to file their taxes.
The best way to protect your business is to have some sort of legal business. Many of the biggest names in the tech world are still in business because they can’t afford to lose their licenses. The biggest example of this would be Apple, who still had some of their production facilities in the US, but was forced to shut them down for tax reasons. Google, Microsoft, and other tech giants have all had their operations shut down for similar reasons.
If you haven’t been keeping your books up to date, you are probably at risk of losing your business. The fact is that the IRS is the most comprehensive government agency in the world, and will look into everything you do. Even though they have no way to track things down, they probably have a list of who is breaking the law and why. The reason the IRS is the most effective government agency is because they are constantly looking into things.
So for example, you may own a small business that you do not have the legal right to, but you are a tax-exempt organization. If you are not sure what that means, just call the IRS and they can give you that information. For the sake of this article, I am going to assume that you are a 501c3 Nonprofit, and that you are a nonprofit in good standing with the IRS (which is the equivalent of a private foundation).
According to a recent press release, the IRS is now working on a “new initiative to allow tax-exempt organizations to operate under a variety of different name-and-form names.” I don’t know about you, but I don’t think I would spend a lot of time calling the IRS about this and hope the IRS is smart enough to realize I don’t have the legal right to do anything I want.
The IRS recently announced they would be adding 501c3 Nonprofits to their list of approved nonprofits. This is a good thing because now you don’t have to worry about getting caught by the IRS. They’re not as aggressive about catching the folks who are actually running these nonprofits as they are about catching the ones who only have a few cents in the till. The good news is that if you are a 501c3 Nonprofit, it should be relatively easy to just use a different name.
501c3 Nonprofits are very similar to 501c4 organizations in that they are generally tax-advantaged to a lesser degree. In fact, the IRS defines a 501c3 Nonprofit as an “Entity Organization” which means it’s a non-profit organization that is considered to be a “business”. In other words, they are a business that does not have to report their income on their tax forms (and don’t need to be registered with the IRS).
A 501c3 Nonprofit can receive nonprofit status in just about any state, and it has been around since the early 90s. Unfortunately, in the last decade or so, the IRS has been cracking down on 501c3 organizations, and some of the major ones are starting to close up shop. The good news is that there are a few good places to go to check out if you are a 501c3 Nonprofit.
One of the easiest ways to check out a 501c3 Nonprofit is to go to the IRS website and look up its state-by-state description. This site also has a good list of the major ones that aren’t likely to be closing up shop anytime soon.
A good way to check out a 501c3 Nonprofit is to check its website. Not only can you see a list of all the local organizations in that state, but you can also see the 501c3 Nonprofit’s tax ID number. The IRS website will also link to the Nonprofit’s IRS Form 990, which can be found on its own website.