501c3 Articles

[custom_frame_right shadow="on"][/custom_frame_right] What steps are involved in the 501c3 application process, and how long does it take to gain approval?  For a brand-new nonprofit organization, the 501c3 application process usually includes the following: - Create Articles of Incorporation (Certificate of Formation) and file with state - Apply for EIN (Tax ID#) - Create Bylaws - Prepare IRS Form 1023 or Form 1024, Application for Recognition of Exemption, including narratives, financial information, schedules, and additional notes - Respond to any IRS follow up questions or requests

[custom_frame_right shadow="on"] [/custom_frame_right] Sometimes we’re approached by clients who have already filled out IRS Form1023 but want us to review their work before filing —  and we are happy to do it.  Here are three common mistakes that we see again and again:  1. Incomplete Purpose Clause and/or Missing Dissolution Clause in Organizing Document (Articles of Incorporation) – Section 501c3 of the Internal Revenue Code requires that your organizing document state your exempt purpose(s), such as charitable, religious, educational, and/or scientific purposes.  Likewise, the code states that upon dissolution of your organization, your remaining assets must be used exclusively for exempt purposes, such as charitable, religious, educational, and/or scientific purposes.

Understandably, this is one question that we hear over and over again from startup nonprofit organizations looking for 501c3 tax exemption from the IRS. Just yesterday I heard from a woman who told me that an online startup “service” had told her it was possible to have her 501c3 application successfully processed within 30 days. Of course, now she wanted to know if we could do it even faster. The truth is, the IRS can take between 2-5 months to review your 501c3 application packet, depending on a number of circumstances. These include the time of year, type and classification of the nonprofit organization, and complexity of your application. Most recently, our clients have received their Letters of Determination within 2-3 months, a relatively quick response compared to previous years. While a 30 day response is not totally out of the question, especially for churches or nonprofit organizations with no paid employees, such a turnaround is extremely rare. [...]