Qcd penalty?
Made a QCD to what thought was a 501c3 last year only to find out the orgabization has applied for their 501c3 but it has not been approved yet. What are the consequences and next steps to correct?
Made a QCD to what thought was a 501c3 last year only to find out the orgabization has applied for their 501c3 but it has not been approved yet. What are the consequences and next steps to correct?
Permalink Submitted by Dan Zaehring on Sat, 2022-08-13 21:41
To quote from the IRS website “When the IRS approves a timely filed exemption application, exempt status is recognized back to the date the organization was created. Thus, while an application is pending, the organization can treat itself as exempt from federal income tax under section 501(c)(3).” If for any reason the pending application is denied, the tax return where the distribution was treated as non taxable would have to be amended — much like a regular charitable donation if the exemption was denied.