Non-public schools have an opportunity to receive funds through the newly effective Illinois “Invest in Kids” Act. The Act offers an innovative way for qualified Illinois private schools to receive additional funding, for supporters of these schools to claim an income tax credit against their 2018 tax liability, and for Illinois students to receive scholarships.
The IRS’s recent Rev. Proc. 2018-5 included a number of updates and changes to the procedures for the IRS’ issuing of determination letters for exempt organizations pursuant to a filed Form 1023 or 1023-EZ Application for Recognition of Tax Exemption. Among the most significant and impactful changes are those related to the User Fees and to the questions asked on the streamlined Form 1023-EZ.
When a nonprofit provides assistance instead of or alongside the government, does that qualify as “charitable activity” under Section 501(c)(3)? Think disaster assistance, affordable housing, parks and recreation facilities, drug and alcohol recovery programs, and other health care services. The answer is seemingly obvious: yes, that all counts as charity – and rightfully so. But is it enough that a nonprofit only lessens a government burden, but does not otherwise provide charity, to qualify for Section 501(c)(3) status? And just what does “lessening a government burden” mean within this IRS context?