PROFESSIONAL FREEDOM TAX SERVICE
Tax Service Blog
Tax Service Blog
|Posted on July 11, 2013 at 11:28 AM|
First, does the Organization have an Appropriate Legal Form? The organization must be organized as a trust, a corporation, or an association.
When you incorporate the organization’s articles it must contain certain provisions. In addition, an organization's assets must be permanently dedicated to an exempt purpose. This means that if an organization dissolves, its assets must be distributed for an exempt purpose described in section 501(c)(3), to the federal government, to a state or the local government for a public purpose. To establish that an organization's assets will be permanently dedicated to an exempt purpose, the organizing document should contain a provision insuring their distribution for an exempt purpose if the organization dissolves.
Second, the organization must apply for a EIN (Employer Identification Number) You can apply for an EIN online at http://www.irs.gov/ or by completing Form SS-4. You may also obtain an EIN via telephone, by calling 1-800-829-4933.
Next, The organization must have an exempt purpose, it must be charitable, religious, scientific, literary, and/or nonprofit organizations.
Has the organization existed for at least three tax years?
If not, then new organizations must give financial statements for the current year and proposed budgets for the next two years, including a detailed breakdown of revenue and expenses. A section 501(c)(3) organization provides this information on Part IX, Form 1023 which will be discussed below.
Once the above three are complete, now you must complete and sign the correct application and attached exact copies of the organization's organizing documents .
To be recognized as exempt, an organization must submit a completed, signed, and dated application. If an organization is seeking recognition of exemption under section 501(c)(3) of the Code, it must complete and file Form 1023, Application for Recognition of Exemption.
Please note. Organizations described in section 501(c)(3) are commonly referred to as charitable organizations.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual.
Please note. A user fee is required for applications. User fees are discussed in part XI on Form 1023.
If you have completed everything above, then you are now ready to submit the organization's completed application to the following address:
Applications shipped by express mail or delivery service should be sent to: