Q: If I own a LLC, can I create a 501-C3 and have it contract my LLC?
My LLC is an event production agency and am looking at producing a major festival in my area. However, I would like the sponsors to be appealed by the fact that their donation would be a tax write off. The name of the non-profit would hold the event title and it would contract my LLC to produce the event. I feel like there is a fine line of legal and illegal here.
A: A non-profit corporation is not necessarily tax exempt. To become tax exempt, a non-profit corporation must file the required application with the IRS. For a tax exempt corporation to maintain the exempt status once it has been obtained, it must operate in accordance with the applicable laws regarding tax exempt organizations. I recommend that you consult with an attorney and/or certified public account who specializes in tax exempt organizations to answer your questions. The purpose of this response is to provide general information only, and not to give legal advice. It does not establish an attorney client relationship.
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