What Is 501(c)(3) Application Process?

In order to obtain Section 501c3 application status, we strongly recommend the assistance of an attorney. The IRS says a 501(c)(3) tax exemption application takes an average of ten hours to complete. If you choose to apply for 501(c)(3) tax exemptions yourself, allocate a whole day to the process. When it comes time to start the 501c3 application process, you will need to know how the IRS evaluates these applications:

501c3 setup paperwork: Everything You Need to Know

501(c)(3) 501c3 documents can be referred to in an introduction but are often the IRS Determination Letters issued to 501c3 organizations. 501c3 documents prove an organization's tax-exempt status to donors and when otherwise required.

• Introductory clause indicating whether the person certifying the articles is the owner or a designated agent of the corporation.
• Article I – Indicate the name of the organization.
• Article II – Assign the address of the nonprofit corporation's principal office in the state of incorporation.
• Article III – Explain the nonprofit organization's charitable tasks. The purpose may be broad and state the corporation's charitable, educational, or scientific objectives.
• Article IV – Describe the trustees and the organization's status. The trustees and the status of the nonprofit can change over time.
• Article V – You will find here details about the nonprofit's operations which demonstrate that it is a nonprofit. With certain exceptions, political activity and distributions to private individuals are prohibited under this section.
• Article VI – This article describes the disposition of assets when a nonprofit dissolves. At that time, all assets should be distributed to 501c3 organizations or state, local, or federal governments.
• Signatures – An authorizing signature should be found at the end of the Articles along with the date of signing.

How do Setup a 501c3?

The following steps will guide you through the formation of your how to start a 501c3 nonprofit corporation.

1. Choosing a name is important.
2. Prepare the articles of incorporation.
3. Make sure you are exempt from taxation.
4. Make sure you are exempt from state tax.
5. Establish bylaws.
6. Make appointments to the board of directors.
7. Organize a meeting for the board.
8. Apply for licenses and permits.

What is the Charity Paperwork?

The IRS classifies IRC 501(c)(3) charitable organizations into one of two categories: public charities and private foundations. Public charities, such as the American Cancer Society or the ASPCA, typically take in a greater portion of their income from the public. Private foundations are typically formed, funded, and controlled by individuals (for example, the foundations set up by tech executives).

How Would You Run A Nonprofit Organization (501c3)?

A nonprofit is like a blind date in the sense that it is scary and takes some time to adjust. A nonprofit is just like any other business; the difference is that you make a profit for the public rather than for yourself. As a result, starting a non-profit corporation is hard because you are limited by federal law concerning what you may or may not do. There are times when it's better to pay taxes and run your business freely than to hold a nonprofit status and be unable to do what you wanted. With patience, knowing the law, and a little help, it is possible to organize profitable nonprofits.
Another thing you should know about the Internal Revenue Code is that it has a lot of sections. It's just one section, and the 501c3 is the article that falls under this section. Nonprofit doesn't automatically mean you qualify for tax exemption under Section 501c3, and at the same time, another section may qualify you for exemption but not 501c3.
A non-profit in another 27 chapters may be tax-exempt, but will not qualify for charitable status. Before proceeding, here is the Complete Revenue Code from the IRS; this is the law that governs the exemption status of the corporation. Find out where you stand by reading the law. Having decided on section 501c3, the next step is to take the Public Charity Test to determine whether or not you qualify for tax exemption under section 501c3. The rest of your work depends on whether or not you pass the charity test.