Tax-Exempt Corporation: What It Takes to Become a 501(C)(3)

The USA has a rich heritage of philanthropy. Also, it has its share of nonprofit organizations worried to get philanthropic funds. A number of these nonprofit organizations have what is called 501(c)(3) status – an ever more common designation. If you want any help in 501c3 paperwork then visit

That is a reference to their tax-exempt status inside the Internal Revenue Code. Organizations that qualify will prevent federal and state income, property, excise, sales, and use taxes, and individuals who donate to them can deduct their charitable contributions from their federal income taxation. Organizations with 501(c)(3) status are also eligible for personal foundation grants and qualify for reduced postal rates on third-class bulk mailings throughout the U.S. Postal Service.

Tax-Exempt Corporation: What It Takes to Become a 501(C)(3)

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Other look-up codes apply to other kinds of nonprofit associations and tasks, including 501(c)(4) for amateur sporting events, 501(c)(5) for agricultural and labor associations, or 501(c)(14) for credit unions. Each includes different prerequisites but are designated for things where profits return to gain the mission of their organization.

The IRS is quite cautious about awarding tax-exempt standing and demands a lengthy application process – and of course, extensive record-keeping to keep tax-exempt status. Plus they do track these charitable organizations carefully.

They would like to be sure no private advantages are likely to go to the officers and the company isn't functioning as a casing to help individuals avoid paying owed taxation. To finish the corporate creation procedure, the company will have to adopt bylaws and receive a Tax Identification Number from the IRS.

The program explores how you are going to raise capital, in which funds will come from and how they'll be utilized, the actions and purpose of this organization, history of officers and supervisors, and a slew of additional info.

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