What is a 501(c)(3) organization and who is eligible to receive 501(c)(3) status?

Is a 501(c)(3) organization prohibited or restricted from engaging in certain activities?

How does a non profit organization apply for recognition of 501(c)(3) status with the IRS?

There is a 2-step process associated with seeking tax exempt status as a 501(c)(3) organization. First, the founders of the charitable organization must incorporate their non profit entity with their State of choice and then obtain a Federal Employer Identification Number for the new organization. Once incorporation is accomplished at the State level, the second step for the charitable organization is to complete and file Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, with the IRS. The IRS application is fairly detailed and you may wish to seek professional assistance with preparation of the application. However, there is no legal requirement that the application be prepared by a professional. You can do it yourself.

Is there a fee charged by the IRS to file the 501(c)(3) application?

Yes, you must submit payment of a user fee to the IRS along with the 501(c)(3) application (Form 1023). The fee will be either $750.00 or $300.00 depending upon whether your average annual gross receipts, or expected annual gross receipts, will exceed a certain threshold dollar figure over a 4-year period. Assuming your charitable non profit is newly created, if your average annual gross receipts will exceed $10,000 annually over the first four (4) years, the user fee is $750.00. However, if your average gross receipts will not exceed $10,000 annually over the first four (4) years, the user fee is $300.00.

If you decide to retain our services, our service fee does not include the IRS user fee. Accordingly, you would be responsible for payment of the IRS user fee directly to the IRS.

When should I file the 501(c)(3) application with the IRS?

If you file Form 1023 within 27 months after the end of the month in which you were legally formed, and the IRS approves the application, the legal date of formation will be the effective date of your exempt status. If you do not file Form 1023 within 27 months of formation, you may not qualify for exempt status before the date the IRS receives your application. In this case, your organization’s exempt status will be postmark date of receipt of your application by the IRS.

Can you prepare my charitable organization’s 501(c)(3) application?

Yes, we can assist your charitable nonprofit with preparation of the 501(c)(3) application (Form 1023) to be filed with the IRS. In order to get started, you would need to complete our Information Questionnaire. Please feel welcome to contact us so that we can send to you our Information Questionnaire via email, fax or mail. We charge a reasonable fee for our services. Please contact us for further information.

Does it matter if my non profit organization is outside of Florida?

No, it does not matter where your non profit is, or will be, incorporated. We can assist any charitable non profit with preparation of the 501(c)(3) application (Form 1023) with the IRS.

What happens after my 501(c)(3) application is submitted to the IRS?

Once your application is received, the IRS tax specialist reviewing an application may request additional information in writing. If all information received establishes that an organization meets the requirements for tax exemption, the IRS will issue a determination letter recognizing your organization’s exempt status. The IRS Determination Letter is an important document that should be kept in the organization’s permanent records.

Do I need to register my charitable organization with the State?

Generally, a charitable organization is required to register with the State of Florida if the charitable organization will solicit donations from people within the State. Such registration, which must be renewed annually, applies to charitable organizations, sponsors, professional fundraisers and professional solicitors. However, the registration law does not apply to bonafide religious or educational institutions, government agencies or political groups. For more information, you can contact the Florida Department of Agriculture and Consumer Services concerning the Solicitations of Contributions Act.

Most States have similar registration requirements for charitable organizations who intend to solicit donations from the public. The National Association of State Charity Officials maintains a website that provides informational links to the various states in regards to charitable solicitation registration requirements. The website can be accessed at www.nasconet.org.