How to apply for 501(c)3 tax-exemption?
To apply for 501(c)3 tax-exempt status for your nonprofit organization, you will need to follow these general steps:
Determine your eligibility:
Most charitable organizations, including those that engage in educational, religious, scientific, or literary activities, are eligible for 501(c)3 status. However, certain types of organizations, such as political groups, are not eligible.
Incorporate your organization:
To be eligible for 501(c)3 status, your organization must be incorporated as a nonprofit in your state. This typically involves filing articles of incorporation and creating bylaws that outline your organization's structure, purpose, and governance. The articles of incorporation must not only meet state requirements, but also must contain IRS-required provisions for 501(c)3 status.
Obtain an Employer Identification Number (EIN):
An EIN is a unique identification number that the IRS assigns to your organization. You'll need an EIN to apply for 501(c)3 status.
File Form 1023 or Form 1023-EZ:
Form 1023 is the application for 501(c)3 tax-exempt status. It requires detailed information about your organization's activities, finances, governance, and compliance with tax laws. If applying on the Form 1023, you'll need to provide supporting documents, such as your articles of incorporation, copies of any amendments, bylaws, and financial statements.
Pay the application fee:
The application fee for Form 1023 is $600. If eligible for Form 1023-EZ, the application fee is reduced to $275.
Wait for a response: It can take several months for the IRS to review your application and make a determination on your tax-exempt status. During this time, the IRS may request additional information or clarification on certain aspects of your application.
Comply with ongoing requirements:
Once you obtain 501(c)3 status, you'll need to comply with ongoing reporting requirements, such as filing an annual Form 990, 990-EZ, or 990-N and maintaining accurate records of your organization's activities and finances.
Applying for 501(c)3 status can be a complex and time-consuming process. It's important to carefully review the application requirements and seek professional advice if needed to ensure that your application is complete and accurate. Let us assist you with this process. We make the complex process simple for you and guarantee IRS approval.