File for 501(c)(3) Status with IRS
Finally, the time has come to file for 501(c)(3) status with the IRS. This is one of the last major steps in the process of establishing a nonprofit organization. Once the organization has been granted 501(c)(3) status, it will be eligible to receive tax-deductible donations and apply for grants from foundations and government agencies. This step is crucial for the long-term sustainability of the organization, as it will allow the organization to raise funds to support its mission.
Tasks
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Prepare the application: The first step in filing for 501(c)(3) status is to prepare the application. There are two forms that can be used to apply for 501(c)(3) status: Form 1023-EZ and Form 1023. Form 1023-EZ is a streamlined application for organizations with gross receipts of $50,000 or less and assets of $250,000 or less. Form 1023 is a longer and more detailed application that must be completed by organizations that do not qualify to use Form 1023-EZ.
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Submit the application: Once the application is complete, it must be submitted to the IRS along with the appropriate fee. The fee for filing Form 1023-EZ is $275, while the fee for filing Form 1023 is $600. The application can be submitted online through the IRS website, or it can be mailed to the IRS.
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Wait for a determination: After the application has been submitted, the organization must wait for the IRS to review the application and make a determination on its 501(c)(3) status. The IRS aims to process Form 1023-EZ applications within 2-4 weeks, while Form 1023 applications can take 3-6 months or longer to process. This organization will receive a determination letter from the IRS confirming its tax-exempt status once the organization has been granted 501(c)(3) status.
Cost
| Item | Cost |
|---|---|
| IRS Form 1023-EZ | $275 |
| IRS Form 1023 | $600 |
| Total | $275 or $600 |