Support you Deserve

We offer a broad range of services to help you secure a sound financial future. You've worked hard to get where you are. You deserve a firm that works hard for you.

Not-for-Profit Entities

Applying for Tax-Exempt Status as a Nonprofit

If you're thinking of starting a nonprofit organization, there are a few things you should know before you get started. First, is understanding how nonprofits work under state and federal law. For example, two things you should understand is that state law governs nonprofit status. Nonprofit status is determined by an organization's articles of incorporation or trust documents while federal law governs tax-exempt status (i.e., exemption from federal income tax). Whether you're starting a charity, a social organization, or an association here are the steps you need to take before you can apply for tax-exempt status.

1. Determine the type of organization.

Before a charitable organization can apply for tax-exempt status, it must determine whether it is a trust, corporation or association. Here is how each one is generally defined:

  • A trust is defined as a relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another. It is formed under state law.
  • A corporation is formed under state law by the filing of articles of incorporation with the state. The state must generally date-stamp the articles before they are effective.
  • An association is a group of persons banded together for a specific purpose. To qualify under section 501(a) of the Code, the association must have a written document, such as articles of association, showing its creation. At least two persons must sign the document, which must be dated. The definition of an association can vary under state law.

2. Gather organization documents.

Each application for exemption - except Form 1023-EZ - must be accompanied by an exact copy of the organization's organizing document, which is generally one of the following:

  • Articles of incorporation for a corporation
  • Articles of organization for a limited liability company
  • Articles of association or constitution for an association
  • Trust agreement or declaration of trust for a trust

Organizations that do not have an organizing document will not qualify for exempt status. If the organization's name has been legally changed by an amendment to its organizing documents, they should also attach an exact copy of that amendment to the application. State law generally determines whether an organization is properly created and establishes the requirements for organizing documents.

3. Understand state registration requirements

Next, you will need to take a look at your state's registration requirements for nonprofits. State government websites have useful information for tax-exempt organizations such as tax information, registration requirements for charities, and information for employers.

4. Obtain Employer ID numbers.

Finally, once your organization is legally formed you will need to obtain employer id numbers (EINs) for your new organization. Organizations can apply for an EIN online, by fax, or by mail using Form SS-4, Application for Employer I.D. Number. International applicants may apply by phone.

Third parties can also receive an EIN on a client's behalf by completing the Third Party Designee section. Don't forget to have the client sign the form to avoid having to file a Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization.

One final thing to note, is that nearly all organizations are subject to automatic revocation of their tax-exempt status if they fail to file a required return or notice for three consecutive years. Once an organization applies for an EIN, the IRS presumes the organization is legally formed and the clock starts running on this three-year period.

Questions about starting a nonprofit? Help is just an appointment away.  Please schedule a free 15-minute phone call evaluation on the Appointments page of this site or by clicking on the https://cp7.cpasitesolutions.com/~bctincje/Appointments.php link.

THE IRS RECOMMENDS    

Federal Tax Obligations of Non-Profit Corporations

Federal Tax Obligations of Non-Profit Corporations
General Information
 
Charities and Nonprofits

Tax Information for Other Nonprofits

Tax information for other nonprofits
General Information
 
Charities and Nonprofits

Your appointments may be scheduled at https://www.remotebusinesssolutionsinc.org/Appointments.php 24/7.  Once on the page, please select the 15-minute phone call option.  A calendar of openings will populate so that you may click on the opening you want.  Complete the required information on the form and hit the submit button when finished.  You will receive a confirmation once complete and an e-mail notification will go to your e-mail box.  Jeanine will be informed of your appointment and will call you at the phone number you provide at the scheduled time.  

SET-UP FOR NOT-FOR-PROFIT ENTITIES

We may be engaged on an hourly or monthly basis to consult and assist you with the set-up of your new not-for-profit (NFP) entity.  You may choose to be advised on how to do this on your own or to have us assist you in the process.  There are numerous applications, licensing items, tax considerations, and required protocols that must be completed in order to become a legally recognized NFP.  Once you become an NFP there will be annual reporting requirements including tax compliance for your truly not-for-profit activities and any for-profit occasional or continuing activities.

Please consider engaging us not only to help you set-up your NFP, but to assist you with managing your required accounting, payroll/contractors, volunteers, and tax compliance services.  This is recommended so that the operators of NFPs can be assured that they are in compliance with laws and protocols for NFP operations, but also to free up the founders and managers of the NFPs from the technical requirements of managing financial systems.

Your appointments may be scheduled at https://www.remotebusinesssolutionsinc.org/Appointments.php 24/7.  Once on the page, please select the 15-minute phone call option.  A calendar of openings will populate so that you may click on the opening you want.  Complete the required information on the form and hit the submit button when finished.  You will receive a confirmation once complete and an e-mail notification will go to your e-mail box.  Jeanine will be informed of your appointment and will call you at the phone number you provide at the scheduled time.   

What Others Say

View Our Client Reviews

BBB Logo
Linked In Logo
Locals Alignable Logo