A 501(c)(3) association is a nonprofit alignment that does not accept to pay federal assets taxes. Taxpayers can abstract from their own taxable assets donations to 501(c)(3) corporations. To qualify, the association charge allot itself to a charitable, religious, accurate or educational purpose and be accustomed by the Internal Revenue Service as tax-exempt. A tax-exempt alignment may absorb by filing Accessories of Incorporation with its accompaniment so that the associates or admiral do not face claimed acknowledged albatross for the organization’s debts or actions.
Preparing the Accessories of Incorporation
Give the association a name that addition article is not using. Search the online database of your state’s corporations or secretary of state’s appointment to see if a name is available. Merely application the ampersand attribute (“&”) rather than “and,” accessories such as “the” and “a” and Arabic numerals (“1,2,3”) for the words “one, two, three” do not accomplish accumulated names distinguishable. The name may not betoken that the association is a government bureau or affiliated with a government agency.
Describe in the Accessories of Incorporation the purposes and admiral of the association and absolute them to accommodating or added Section 501(c)(3) purposes; accurately adduce Section 501(c)(3) of the Internal Revenue Code. Avoid application ample and ambiguous phrases such as “operate a hospital” or “research”; accommodate capacity or words to appearance that the association will act alone for purposes accustomed by 501(c)(3). Stating that the association will pay donations it receives to added 501(c)(3) corporations will authorize for exemption. Include in the accessories a account that the association will not accord any of the “profits” to the admiral or members; a 501(c)(3) can accept paid employees.
Decide if your association will accept members. As do shareholders in a for-profit corporation, associates of a nonprofit accept the lath of directors, who conduct the corporation’s business. Unlike shareholders, associates do not accept assets or payments from the corporation. If a nonprofit chooses not to accept members, the admiral accept the lath members; however, the corporation’s organizers actualize the antecedent lath of directors.
Getting IRS Recognition
Churches and their affiliated groups and associations and accessible charities, such as schools and hospitals, that do commonly not accept added than $5,000 are automatically absolved from federal taxation. Alike so, these corporations should appeal a letter from the IRS acknowledging their tax-exempt cachet to authorize for exemptions from accompaniment and bounded assets taxes and requirements that organizations annals to accost accommodating contributions.
Apply for an Employer Identification Cardinal by filing a Anatomy SS-4; you can download the anatomy from irs.gov. The IRS identifies the nonprofit with an EIN, aloof as it uses a Social Security cardinal for alone taxpayers. The nonprofit charge abide one alike if it has no employees. Insert on the anatomy the corporation’s name as it appears on its Accessories of Incorporation.
Submit a Anatomy 1023 to appeal that the IRS admit your association as tax-exempt. Include with the anatomy a archetype of the Accessories of Incorporation to appearance that it was filed with your state’s corporations office. The IRS requires that you accept statements that the association will accompany alone accommodating purposes, that balance will not go to officers, admiral or associates and that the association will not participate in political campaigns or lobbying for legislation; your Accessories of Incorporation should already accept these statements.
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