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IRS codes and Nonprofit Taxonomy of Exempt Entities (NTEE)

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Can someone please provide some assistance with this question. Its for an MBA course. It needs to be between 550 and 650 words. Describe the difference between the Nonprofit Taxonomy of Exempt Entities (NTEE) codes and the 29 different categories of Section 501 (c) of the Internal Revenue Code (IRC). Why do we need the NTEE Code if we already have the sector broken out into different exemption types in the IRC? What advantages are there to having both codes? Where can we find the NTEE code for an organization? Please see attached for further information on how to better assist me. Thank you so much in advance for all your help. I really appreciate it. If you can help me please sign off on it so I know that you are able to help me.

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Solution Summary

The differences between the IRS code for nonprofit, tax exempt, and Nonprofit Taxonomy of Exempt Entities (NTEE).

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Nonprofit Taxonomy of Exempt Entities (NTEE) codes are used to classify nonprofit organizations. These codes were established to help provide uniformity among nonprofits and makes it easier to compare statistical information and data (National Center for Charitable Statistics (NCCS), 2015). While the IRS system is set up to identify organizations that qualify for tax exemptions status, it is a fairly simple system. The IRS asked for a better classification system than using the description section of an application to determine its tax exempt status and the NTEE system was created. It is like the North American Industry Classification System (NAICS) codes used by organizations to define all types of businesses. This system is also hierarchical, so it is easier to determine the appropriate classification.

The IRS code categories are simply defined, major group designations. The IRS allows those ...

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