Make A Great Impression In The Courtroom

Make A Great Impression In The Courtroom

How To Obtain Tax-Exempt Status For A Nonprofit Endeavor

by Richard Ramirez

Every community has certain needs that are not being addressed by business or government. Individual citizens are usually the first to recognize the unmet needs of a community. Groups of like-minded individuals can often make the most impactful changes to society by channeling their efforts through a nonprofit entity.

If you are interested in starting a nonprofit organization, there are several steps in the formation process. The first step is to draft a mission statement. The purpose of the organization should be clearly spelled out, along with a description of the persons or groups that will be served. Once the mission of the organization is clear, you are ready to start the registration process as a tax-exempt entity.

State registration

The IRS requires a tax-exempt organization to be structured as a corporation, a trust, or an association. Once you have chosen an entity type for your nonprofit organization, you will need to register the entity with your state. Before settling on a specific name for the organization, make sure that another group is not already using a name too similar.

In addition to state registration, your organization will need an employer identification number (EIN) from the IRS. State registration and an EIN are both needed to apply to the IRS for tax-exempt status.

Types of nonprofit activity

Tax-exempt status is granted by virtue of section 501 of the Internal Revenue Code. Most nonprofit charities fall under the specific code subsection 501(c)(3). There are a host of other specific code subsections for specialized nonprofit groups, such as credit unions and railroad retirement trusts.

IRS application for exempt status

IRS Form 1023 is a lengthy form used to request tax-exempt status for a 501(c)(3) organization. Fortunately, there is a shorter version of the form that smaller nonprofit entities may file. The instructions for Form 1023-EZ contain a list of questions that you can answer to determine if your organization is eligible to use the shorter Form 1023-EZ.

You don't have to delay operations while waiting on IRS approval. While the application is pending, you can consider your entity to be tax-exempt. In addition to revenue being exempt from federal income tax, donors may take a tax deduction for a contribution to a 501(c)(3) organization. After your entity receives approval from the IRS, potential contributors should be able to use the IRS lookup tool to confirm your tax-exempt status.

Your organization may need a website to put forth your message, as well as to accept contributions. Contact a business like Legal For Good PLLC for further assistance in starting a nonprofit organization.


About Me

Make A Great Impression In The Courtroom

Hello, I'm Phillip Kerr and I just love the legal profession and courtroom drama. Have you ever watched judge shows on TV? I know that these shows are not an accurate representation of the courtroom, but there is something you may have noticed. Some individuals come into the courtroom well-dressed, articulate, respectful and with the knowledge and documents necessary to support a case, while others come unprepared, slovenly dressed and appear as if they do not have a care in the world. How you present yourself and the knowledge that you have of the law will have an impact on how you are treated, even if you have legal representation. This blog is designed to assist those who are going to trial in doing just that.