If you are interested in starting a nonprofit or have general questions on nonprofit law you have come to the right place! The questions that follow will help you determine if an organization is eligible to apply for recognition of exemption from federal income taxation under section 501(a) of the Internal Revenue Code and, if so, how to proceed.
The Internal Revenue Service has published two new brochures to help tax-exempt charities understand the tax laws conferring tax-status.
Publication 4220, Applying for 501(c)(3) Tax-Exempt Status, is designed to help prospective charities apply for tax exemption under the tax law.
If you want to see an in-depth discussion of exemption requirements under section 501(a) of the Code, rather than going through a step-by-step analysis of an organization’s eligibility to apply for recognition of exemption from federal income taxation, see Types of Exempt Organizations or download IRS Publication 557, Tax Exempt Status For Your Organization.
First Things First. Does The Organization Have an Appropriate Legal Form?
For the Internal Revenue Service (the IRS) to recognize an organization’s exemption, the organization must be organized as a trust, a corporation, or an association.
Is the organization a trust, corporation, or association?
You may direct your technical and procedural questions concerning charities and other non-profit organizations to IRS Tax Exempt and Government Entities Customer Account Services at (877) 829-5500 (toll-free number). The call center is open 8:00am to 6:30pm Eastern Time. Or you may write at:
Internal Revenue Service
TE/GE Customer Account Services
P.O. Box 2508
Cincinnati, OH 45201
If you need one on one assistance The Center for Non Profit Creation, will be happy to assist you in the process of creating a nonprofit from start to finish, acting as your agent, filling out all the paperwork with the IRS as well as incorporating within your state. You can contact them by clicking the above link or by calling Kris Stroscher toll free at 310-557-0804 or email directly by clicking here!
However, if you want to try to fill out all the forms yourself:
You MUST read this first: http://www.irs.ustreas.gov/pub/irs-pdf/p557.pdf
The IRS has revised Form 1023, the exemption application form for section 501(c)(3) organizations, and its instructions.
Frequently asked questions explain the revisions and the transition from the prior to
the new version of the Form.
Exemption Requirements
A brief description of the requirements for exemption under IRC Section 501(c)(3).
Application for Recognition of Exemption
Procedures for applying for exemption under Internal Revenue Section 501(c)(3).
Private Foundations
A brief explanation of the rules for classifying charitable organizations as private foundations, and the effect of private foundation classification.
Unrelated Business Income Tax – General Rules
A general description of the unrelated business income tax requirements for
tax-exempt organizations.
Contributions
A brief description of the disclosure and substantiation requirements for contributions
to charitable organizations.
Publication 1771 – Charitable Contributions – Substantiation and Disclosure
This publication explains the federal law for organizations (such as charities and churches) who receive tax-deductible contributions and for taxpayers who made contributions. Also, with the new IRS regulations, anyone can request a copy of an organization’s Form 990. Find out more here: http://www.qual990.org/value_of_990.html
Canada Revenue Agency (CRA) links
CRA requires electronic records to be stored in Canada. Books and records maintained outside Canada but accessible electronically in Canada do not meet the requirement of being kept in Canada.
Find other helpful CRA information at the links below:
- Maintaining books and records
- Computer-Generated Official Donation Receipts
- Split receipting
- Sample official receipts (format requirements for tax receipts)
- Correcting or replacing official donation receipts
- Deemed fair market value
- Gifts of services
Techsoup Canada – Buy software at a fraction of the regular price and access essential information about technology.
Charity Village – Canada’s supersite for the nonprofit sector. Find more than 3,500 pages of news, jobs, resources, how-to articles, volunteer and event listings, educational opportunities, and more. A lot of the material on this site is applicable to US charities.
Additional Information
Federal Tax Code – Exempt Organizations
Links to provisions of the Internal Revenue Code and Treasury Regulations for exempt organizations.
Federal Tax Regulations – Exempt Organizations
Federal Tax Regulations – Exempt Organizations
Listing of Published Guidance
Listing of guidance published by the Internal Revenue Service in 2010 on issues of interest to tax-exempt organizations.
Priority Guidance Plans
An archive of IRS-Treasury priority guidance plan documents for tax-exempt organizations.
Archive of Published Guidance
An archive of published guidance of interest to tax-exempt organizations.
Field Memoranda
Periodic memoranda (within the Exempt Organizations office) which highlight recent tax law developments.
Advance Releases
The Service releases the full text of revenue rulings, revenue procedures and other technical items in advance of publishing them in the Internal Revenue Bulletin.
Internal Revenue Manual (IRM) Online
Policies, procedures, instructions and guidelines used by the Tax Exempt & Government Entities Division of the IRS.
Electronic Reading Room
A comprehensive list of documents and other information available electronically on the IRS.gov site.
New e-mail Service Available for Technical Guidance
IR-2004-105 – Tax professionals and others interested in federal taxation can have technical guidance from the IRS e-mailed to them.
DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.
