Nonprofit Elite’s reputation has been earned…
By helping organizations such as…
And Our Results Speak For Themselves
Apply for 501c3 Status – Form a 501c3 Organization
We’re Your Starting Point!
Nonprofit Elite provides expert counsel and outsourcing services to startup nonprofit organizations, including preparation of your formation documents, help through the 501c3 application process, and a full range of consulting and compliance solutions. No matter where you are in the startup process, we can help.
Nonprofit Elite provided us with consultation, formation documents, and preparation of our 501c3 application – a first class experience from start to finish. Our goal was to do things the right way and that’s exactly what happened. Ben and his team were helpful at every step. We had our IRS approval in three months.”
—Malcolm K. Farmer
President and General Manager
NBA’s G League Texas Legends
Understanding the 501c3 Application Process
Articles of Incorporation
Step one is to incorporate in your state as a nonprofit or public benefit corporation by filing Articles of Incorporation with your Department/ Secretary of State. While there are other ways to form a 501c3 organization, such as creating a trust or non-incorporated organization, state incorporation is by far the most common method. Incorporation costs vary from state to state but typical fees range from $25-$125. The length of time to incorporate ranges from a few hours to several months, depending on the state and your filing method. Most important is that you must include the IRS-required purpose and dissolution language in your formation documents, even though most state forms do NOT mention these requirements.
Tax ID Number and Bylaws
Your next step is to obtain a Tax Identification Number from the IRS, also called an EIN or FEIN, and then create organizational Bylaws. Bylaws are a required governing document that provide rules and management guidelines for your organization and your board of directors. A custom set of Bylaws takes a few days to prepare, and we can obtain your Tax ID Number online from the IRS website in about 20 minutes. There are no state or federal filing fees associated with obtaining your EIN or creating Bylaws, but keep in mind both of these items are carefully reviewed when you file your IRS Form 1023 to apply to the IRS for federal tax-exempt status.
IRS Form 1023
The last step in the 501c3 application process is to file either IRS Form 1023 or IRS Form 1023-EZ with the IRS. This is by far the most complex and time-consuming part of the process; even the IRS estimates 20–100+ hours of preparation time for a first time applicant. We strongly encourage you to contact Nonprofit Elite to determine which form to file, and there is a required User Fee of either $275 or $600 depending on the form. Once completed, you will submit your IRS Form 1023 application to the IRS for review along with signed copies of your formation documents, Bylaws, Tax ID Number, Conflict of Interest Policy, User Fee, and all additional schedules and notes.
Recent Nonprofit 501c3 Related Articles
IRS Taking Longer to Review 501c3 Applications / Form 1023
The last few months we’ve noticed a significant increase in the amount of time that the IRS is taking to review and approve applications for 501c tax exemption. During the first six months of 2012, our clients were receiving their Letters of Determination on average within 3-5 months. More recently, a number of our clients are well into their fifth and sixth month of waiting. Since there is no effective way to expedite the process, we encourage you to plan accordingly and to contact us if you have questions.
501c3 Application Process and Timeline
[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
501c3 Application Mistakes
[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.