FAQ Help Center
My goal is to help all nonprofits to succeed no matter where they are in their lifecycle.
Popular Questions
Here are some answers to the most common questions asked by individuals new to operating a nonprofit:
A 501(c) organization is a type of nonprofit organization that enjoys tax-exempt status for some federal taxes and where donations are tax-deductible for donors. According to the National Council of Nonprofits there are approximately 1.3 million 501c3 organizations based in the United States.
All nonprofits are required by federal law to have a minimum of three board members. Some states have more expansive requirements. New Hampshire law requires a minimum of five board members serve.
All nonprofits wishing to request tax-exempt status must file nonprofit articles of incorporation with the state, EIN, Bylaws, and Conflict of Interest policy. Once these documents are in place the board of directors can apply for 501c3 status using IRS Form 1023. This form will ask questions about contact information, activities, and financial data.
All applicants filing the 1023 application will be required to provide a minimum of three years financial data. Nonprofits formed in the year they are applying for 501c3 status will be asked to provide projected good faith estimates of the future costs to operate its programs. Charities that are operating will be required to provide actual financial data for all years since the charity first organized up to five total years.
The IRS recieves more than 95,000 new tax-exempt applications each year. Depending on which tax-exempt form a nonprofit uses the timeframe for it to be assigned to an IRS Agent can vary from 4 weeks to 32 weeks on average. For an up-to-date list of the current dates of applications the IRS is reviewing please visit here.
All nonprofit organizations (even those awaiting tax-exempt status) are required to file a tax-return five months and fifteen days after their official tax year closes. This is a requirement even if the charity earned $0. The only nonprofits that can request special permission to be exempt from the annual tax return requirement are churches, religious schools, church affiliated organization, and the government. All IRS approval letters will list yes or no to tax-return requirements and the specific due date of the tax-return on the top right-hand side of the letter. Depending on your income earned, assets, and programs the specific tax return you will need varies.
State filing requirements typically fall into four categories: annual reports, charity registration, state tax exemption, and sales tax exemption. Depending on your state you can be required to file one to four different reports with separate state agencies to stay in compliance. Many states also require that the nonprofit provide copies of a 990-EZ, 990, or 990PF tax return also be included as one of your attachments, so it is critical to make sure you are on-top of both state and federal requirements.
The IRS requires nonprofits to be on-time with its tax-returns every year. If you forget to file or are late filing for three years, the IRS will revoke your tax-exempt status. The IRS provides four core methods for regaining your tax-exempt status based on the 1) the timeframe the status was lost, 2) the amount of donations received on each of the individual years the nonprofit failed to file tax returns, 3) how many times the nonprofit has lost its status with the IRS.
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