Application Requirements for 501(c) and 501(c)(3) Status
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How to form a 501(c)(3) organization or nonprofit.
By forming a nonprofit corporation such as a 501(c)(3), you'll ensure limited liability for those people involved in its management. Incorporating your nonprofit organization can help you to establish the kind of legal protection that separates personal assets from the activities of the corporation
Though other types of nonprofit organizations exist, our customers typically seek 501(c) tax-exempt status with the Internal Revenue Service (IRS).
Our Signature 501(c) and 501(c)(3) Services includes the following:
- One hour, quick start welcome call with a nonprofit expert.
- IRS Form 1023 application completion.
- Additional Schedules completed, if required
- Narratives & Explanations (Your organization's programs and descriptions in a narrative format).
- Completion of 3 year financial budget and projections
- IRS required Conflict of Interest Policy.
- Review of Articles for required IRS language.
- Completed IRS checklist
- Inventory of Documents completed.
- 5 day turnaround from order submission to IRS filing
- Completed application packet USPS priority mailed to IRS, postage paid: Packet includes: Form 1023 checklist, Form 2848 Power of Attorney, Form 1023 Application, Schedules A – H as required, Copy of Articles of Incorporation, Bylaws, Narratives and Explanations of programs and activities, Financial Data, copies of organization's marketing materials and fundraising efforts, scanned, ordered and labeled per IRS protocols.
- Documents USPS priority mailed to you for review and signature.
- A nonprofit advisor available to help you every step of the way.
The Signature Package also includes these valuable services:
- Professional IRS representation and case management – Our team contacts the IRS on behalf of your organization. A completed form 2848 allows our team to receive IRS correspondence and respond to the IRS if the client is unavailable. You will never miss an important IRS notice or deadline.
- Non Profit Advisor Academy – Immediate access to online educational program to help you start, fund and grow your nonprofit. The Academy is 7 modules each containing multiple lessons on crafting your mission statement, creating your organization's vision, defining values, selecting board members and officers, nonprofit governance, tax compliance and receipting of donations, fundraising and much more. You will receive invites to live monthly teleclasses, trainings and alerts of important changes in the tax code. All this is included with your Academy membership.
- Drafting of IRS response letters – Most organizations will receive written questions from the IRS. It is not uncommon to receive dozens of technical questions that must be answered before your application will be approved. Our team will assist in drafting IRS response letters and speak directly with IRS examiner to expedite question and answer process.
- 100% Approval, Money Back Guarantee* – Our team will work with the your business, for as long as it takes to receive a positive letter of determination.
*Does not include IRS user fee or incorporation fees.
Nonprofit Formation with incorporate.com.
It is important to remember that a 501(c) must satisfy certain conditions and requirements imposed by the IRS to obtain and maintain tax-exempt status. incorporate.com cannot provide legal or tax advice regarding these conditions and requirements and it may be necessary for your nonprofit to consult with other professionals, such as lawyers, accountants or tax advisors.
Learn more about 501(c) and 501(c)(3) Statuses
Find out more about 501(c) status in our Frequently Asked Questions section.
DISCLAIMER – incorporate.com does not provide tax or legal advice and the information above should not be relied upon in making any tax or legal decision.
Nonprofit 501(C)Status FAQs
- What is Non Profit Tax Exemption?
- What are the benefits of forming a nonprofit corporation?
- Which form do I file?
- When do I need to file form 501c to receive tax-exempt status?
- How can incorporate.com help me?
What is Non Profit Tax Exemption?
Section 501(c) is a tax law provision granting exemption from the federal income tax to non-profit organizations. There are different types of 501(c) organizations. 501(c) is the most common, but you can apply for tax exemption for any of the IRS accepted types of nonprofits.Back to Top
What are the benefits of forming a nonprofit corporation?
Nonprofit corporations that qualify for 501(c)status enjoy the following advantages:
- Personal asset protection and limited liability for directors and officers
- Tax exemption from federal income tax as a charitable organization
- Grant eligibility to receive private and public grants
- The ability to receive tax-deductible donations from donors
- Perpetual existence, even if a director leaves the business or passes away
- Possible exemptions from property taxes
- Application for special postage rates at a reduced cost
Which form do I file?
For 501(c)tax exemption, you'll file IRS form 1023. For other 501(c) exemptions, you'll file IRS form 1024.Back to Top
When do I need to file form 501(c) to receive tax-exempt status?
In order to receive tax-exempt status as a charitable organization retroactive to the formation date, the initial deadline to file an exemption application is 15 months from the end of the month in which the organization was formed. However, the IRS has granted an automatic extension of the application filing deadline of 12 months, so the due date is extended to a total of 27 months from the end of the month of formation. For organizations not filing an application within 27 months, the organization may apply for a longer discretionary extension through submitting "Schedule E" with the application. After the initial deadline, a company can still file for exemption under 501(c) at any time, but if not within the boundaries just mentioned, the tax-exempt status will not be valid until filed with the IRS.Back to Top
How can incorporate.com help me?
We will obtain the information necessary to complete the 26 page form with the IRS. Next, we'll submit your filing to the IRS, along with any necessary supporting documents. Shortly after the submission, the IRS will respond with additional questions. We will assist you every step of the way in answering their questions, until your filing is complete.Back to Top
What to expect:
- Upon receipt of your worksheet, the 1023 application will be completed and returned for your signature in 5 working days.
- The complete application packet, including narratives, explanations, bylaws, conflict of interest statement and supporting documents to be completed in 14 days, or less.
- You will have to cut a check to the Department of Treasury for either $400 or $850. Our tax division will let you know the amount based on your financials.
- The IRS approval time averages 3-6 months.
- In the meantime, you should be able to operate as a tax exempt entity, enjoying retroactive status, as long as the application goes through in a timely manner.
- We will be in touch with the IRS throughout the process to make sure that everything is going according to plan.