|
1. Organizational Document. The
Organizational Document of the non-profit
organization has to be prepared and filed with
the filing office of the state where the
organization is intended to be created. The
organizational document is in some states an
Articles of Incorporation document containing
specific required language depending on the type
of non-profit (i.e., religious, public benefit,
etc.).
2. Bylaws. The bylaws of the non-profit
organization contain important provisions about
how the non-profit organization will be
governed, including provisions designed to
protect the directors and officers from business
liabilities. Drafting and adopting the bylaws of
the non-profit organization is generally one of
the central requirements that needs to be
complied with rigorously in order to show that
the non-profit organization is a "separate"
entity, and therefore, the directors and
officers should enjoy limited liability
protection.
3. Employer Identification Number - EIN.
After the Organizational Document is approved by
the state, applying for a federal tax ID (EIN)
is one of the first things which must generally
be done. You cannot even open a bank account on
behalf of the non-profit organization unless the
non-profit organization has obtained the federal
tax ID (EIN). This is also one of the
formalities required to "separate" the
non-profit organization from directors and
officers in order to be afforded limited
liability protection. Furthermore, an EIN is
required in order to have a complete IRS 501 3
(c) form (see below).
4. IRS 501 3 (c) form. The IRS 501
3 (c) form, a long 15 pages plus document, has
to be prepared and filed with the IRS. The IRS
501 3 (c) form is the application for
non-profit/ tax exempt and "tax deductible
contributions" status. A copy of the
Organizational Document and Bylaws, as well as
evidence of the claimed non-profit activity of
the non-profit organization is also generally
required. There is also a filing fee of $300 or
more depending on the actual or expected gross
revenue of the non-profit organization. If the
IRS 501 3 (c) application package is complete
and without errors, the IRS will generally issue
a verdict within 30-45 days.
5. State Tax Authority Filing. Tax
non-profit / exempt status of the non-profit
organization must also be granted by the tax
authority of the state where the non-profit
organization was formed and/or operates.
Otherwise, the non-profit organization may be
subjected to the regular state business income
taxes. The good news is that once the IRS grants
the non-profit/ tax exempt status to the
non-profit organization, obtaining the
corresponding equivalent status from the state
is generally only a formality.
|
|
|
|
|
1-800-314-3972
M-F 8-6 PST
