In this blog we will discuss the non profit 501c3 tax exempt application sections 1 thru 3.  Charitable Organizations such as a church, and cooperating associations that operate for charitable purposes, promotion of arts and sports, religious preaching, and protection of human rights are offered tax deductions.

These deductions are offered to organizations that have filed for a non profit 501c3 tax exemption application.  The 501c3 tax exempt status helps organizations to gain funds and sponsorship as the individual donating to an organization with 501c3 tax exempt status also qualifies for tax reductions.  Here is how you can obtain the 501c3 tax exempt status:

  1. Obtain a revised IRS 1023 form

To get the 501c3 tax exempt status, you will need to file IRS Form 1023 –Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code within 27 months of filing for incorporations of a non-profit organization, which is the 501c3 tax exempt application.

The IRS 1023 form is divided into 11 parts. Here is a brief review of each section of the form.

The First section will ask for basic information about the organization such as the name of the charitable corporation, mailing address, other contact information such as telephone and fax numbers, and the date of filing of article of incorporation.

To qualify for the 501c3 tax exempt status, it is mandatory that your organization has Employer Identification Number (EIN). Regardless of the fact that it has employees or not, the EIN number is an essential formality for the tax status which should be acquired prior to filing for the status. Acquiring an EIN number is an easy process and usually takes less than a week depending on the state in which the charitable organization is located.

The Second section of IRS 1023 asks for information regarding the organizational structure of the corporation. It is essential to provide a copy of Articles of Incorporation and By-laws. While filing for the changed status, the supplicant  will be required to incorporate following clause in Articles of Incorporation:

  • a clause that states that your corporation was formed for the purpose of being a recognized 501(c)(3) tax-exempt organization and
  • a clause that states that any acquired assets of the corporation shall  remain after the entity is dissolved and shall be distributed to another 501(c)(3) tax-exempt organization according to the discretion of the federal or state government or any governing authority.

The Third section of the application looks into the nature of charitable activities.  The supplicant will be asked to provide a narrative of the organization’s activities in the past, present and future. Along with the detailed description the asker will be asked to specify the resources that are allocated to the specific activities and how those activities support the purpose of the organization. Here are some aspects of the business that are required to be specified under this section:

  • Date of Commencement of your activity or the date at which the specified activity has been conducted.
  • The person responsible for conducting such activities and the destination.
  • Funding Methods that will be undertaken in order to sponsor the activity.

If you need more information about our, Orlando accounting and tax services, please contact us at 407-344-1012.  Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years.  Our Orlando accounting and tax firm has its main offices in Kissimmee, FL.  Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, and Hunters Creek, FL.  Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.

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