Editor: Mark Heroux, J.D.
The name “economic development corporation” (EDC) is somewhat misleading. The name suggests that any alignment advised to advice a community’s abridgement can be absolved from taxation. The absoluteness is that EDCs are advised accommodating organizations. Thus, EDCs should accept a accommodating mission. While there is no bright-line analysis for what qualifies as an EDC, the IRS’s position is that EDCs charge about abide to advice blank taxpayers in austere communities. EDCs are accurate to be acquainted of both the authoritative foundation for an absolution and the assorted IRS authorities on EDCs.
Sec. 501(c)(3) exempts from taxation institutions that are organized and operated for accommodating purposes.Regs.Sec. 1.501(c)(3)-1(d)(2) states that the appellation “charitable” includes:
Relief of the poor and afflicted or of the underprivileged; advance of religion; advance of apprenticeship or science; adjustment or aliment of accessible buildings, monuments, or works; abbreviation of the burdens of Government; and advance of amusing abundance by organizations advised to achieve any of the aloft purposes, or (i) to abate adjacency tensions; (ii) to annihilate ageism and discrimination; (iii) to avert animal and civilian rights anchored by law; or (iv) to action association abasement and adolescent delinquency.
While the byword “economic development” does not arise in the regulation, it is through this accent that EDCs are absolved from taxation.
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