OUR SERVICE
At Rogers & Co Technology Consultants LLC, we work side-by-side with our clients and tailor our services to fit their specific needs. We combine personal attention and access to the highest levels of technical expertise and specialized knowledge. Timely communication and responsiveness are hallmarks of our client relationships. All of these attributes support our objective of helping you reach your financial goals.
We pursue excellence by staying on top of current developments and technologies. We stay abreast of industry issues and observe the marketplace to provide service and advice tailored to your specific needs and goals. We use our experience and resources to develop industry insights and specialized skills that allow us to bring maximum value to your projects. Together all of these factors allow us to deliver superior service and act as a trusted business adviser.
A detailed listing of the services we provide is set out below. Take a look at what we have to offer and how we can help you or your business.
WHAT IS A NONPROFIT 501C3?
In other words, a nonprofit organization is not required to pay federal income taxes. More in depth, a 501c3 is a nonprofit corporation considered by the IRS to be either a “public charity” or a “private foundation” under section 501(c)(3) of the Internal Revenue Code. Upon filing the required documents and receiving IRS tax-exempt status, such an organization is tax-exempt, meaning that it is not required to pay taxes on donations made to it, or even on certain forms of income made by the organization. 501c3 organizations are split into two categories: public charities and private foundations. Public charities are much more common – and generally more desirable – so we’ll start with those and address private foundations in a moment.
Obtaining your 501c3 Tax-Exempt Status:
How hard is it to obtain 501c3 approval? And how long does it take to register as a 501c3 organization?
Normally, obtaining 501c3 approval is a long and involved process beginning with forming a board of directors, filing articles of incorporation with your state, drafting and adopting bylaws, voting in the nonprofit officers, adopting a conflict of interest policy, completing the IRS 501c3 application, including a projection of your financial data for the nonprofit’s first three years, and much more.
However, with the help of a CPA Eric J Rogers and his 30+ years of experience and helping more than 2,500+ nonprofits do just that, turning your charitable dreams into a registered 501c3 will be an easy step by step process.
The earlier you start, the better! The IRS processing times for 501c3 applications have been notoriously long, ranging from 6-10 months. And making a mistake as a result of trying to do it yourself can cost you months more in delays as the IRS sorts out the information they need or just denies tax-exempt status to your organization. However, with our new system following a new system with the IRS, we have found that most clients get their tax-exempt status in 2-3 months. It still varies with the IRS backlog, time of year, and how complicated your 501c3 application is.
The good news is, once you receive that 501c3 approval letter from the IRS, your tax-exempt status is retroactive to the date of your filing articles of incorporation in your state, meaning any contributions received after that point are tax-exempt for your organization and tax-deductible for the donors.
What is a 501c3?
Benefits of a 501c3 Public Charity:
***Public charity: Organizations that are exempt under section 501(c)(3) and are not private foundations because they are: churches, schools, hospitals, governmental units, entities that undertake testing for public safety; organizations that have broad financial support from the general public; or organizations that support one or more other organizations that are themselves classified as public charities. Public charity status is a more favorable tax status than private foundation status.
Obtaining 501c3 tax-exempt status is one of the best actions you can take for your charitable organization. Not only will donations to the nonprofit be tax-exempt, but they will also be tax-deductible for the donors, meaning donors will be significantly more motivated to give to your charity.
Moreover, income from business sources related to the organization’s tax-exempt purpose is also tax-exempt. For example, an organization could teach homeless individuals how to paint, and later could sell their paintings to others. The income from selling the paintings would be directly related to the exempt purpose of the organization–rehabilitating homeless individuals through painting workshops–and so would not be taxed income. Note that unrelated business income, such as this organization also running a for-profit art gallery (separate from their selling of the paintings by the homeless individuals), is generally taxed if grossing more than $1,000 annually.
Registered 501c3 organizations are also perceived as more credible by potential donors. Donors, especially those with large donations to make, want to be sure that their money will be used wisely and effectively to support the cause toward which they are donating. Registering as a 501c3 indicates that your charitable work has been approved of by an impartial governmental agency (the Internal Revenue Service), and that you have taken certain required steps such as establishing a board of directors.
In addition, grant-making foundations will usually refuse to make a grant to an organization that is not a registered 501c3. Because these situations frequently involve large sources of funding for nonprofits, it is very beneficial to obtain your 501c3 status early.
Disadvantages of a 501c3 Public Charity:
Are there any negatives to being a registered 501c3? Tax-exempt organizations do face compliance-related required filings every year, as well as the responsibility to maintain records such as receipts and records of contributions received. Moreover, 501c3 organizations cannot generally engage in political activity, and officers and directors are limited to reasonable salaries.
These considerations, however, amount to basic principles of bookkeeping, and of charitable work. Thus, if your goal is to make a political impact or to make a personal profit, a public charity may not be for you. Otherwise, public charities are the perfect vehicle for turning your charitable dreams into a reality that will be well-respected and well-funded.
Let’s take a look at 501c3 compliance issues.
Compliance for 501c3 Public Charities:
501c3 compliance is relatively basic, but extremely important. Many organizations, as discussed further below, are only required to file a very simple electronic form. However, even for these organizations, the consequences of failing to file are great: any organization required to file an annual return and failing to do so for three consecutive years will be subject to losing their tax-exempt status entirely. This results in another time-consuming and expensive process to regain 501c3 status.
Annual Exempt Organization filings for 501c3 organizations. All tax-exempt organizations (with the exception of churches and certain church-affiliated organizations) must file an annual return with the IRS. This keeps the IRS informed on the activities and financial status of the nonprofit, and helps them ensure that tax-exempt organizations remain charitable in nature, rather than slowly morphing into tax-exempt for-profit businesses.
Most organizations will use Form 990 or a variant for this purpose. Small organizations, defined by the IRS as “those whose gross receipts are normally $50,000 or less,” are permitted to file a very simple online form. Larger organizations, however, will be required to submit more detailed information.
501c3 organizations with more than $1,000 in unrelated business income will also need to file Form 990-T and pay taxes on this income. Moreover, all organizations with paid employees will need to file the appropriate forms to pay their employee taxes.
Let’s look at private foundations for a moment.
501c3 Private Foundations:
WHAT IS A PRIVATE FOUNDATION?
(YES, WE DO FAMILY FOUNDATIONS.)
A private foundation is a nonprofit organization whose directors and officers and their relatives are primary financial supporters of the organization. OR the directors and officers are insiders (family members or business associates) that wish to retain control of the nonprofit. (Otherwise, the IRS may require that a majority of the directors be unrelated by close family or business, and officers cannot be related–although often they do not.)
The IRS divides the nonprofit world into two groups—private foundations and public charities. You are assumed to be a private foundation unless you can show that you are supported in large part (at least one-third) by the general public (rather than the directors, officers, and their families). If the plan for your organization calls for general public support, you have 5-7 years to prove that indeed this is where your support comes from. Even though the directors and officers and their families give most or all of the money in the beginning (“seed money”), you can still be considered a public charity during the 501c3 application process. Do not check the private foundation or private operating foundation box at signup if your long-term plan is for public support even though you are putting in all or most of the money in the beginning. However, you can bring in unlimited amounts of public charity money and still be a private foundation if you wish, for example because you want your board to consist primarily of individuals related by family or business. BUT unless your private foundation will be giving its money to other 501c3’s (like the Bill and Melinda Gates Foundation), you will be classified as a “Private Operating Foundation” (please see below).
HERE’S WHAT THE IRS HAS TO SAY ABOUT PRIVATE FOUNDATIONS:
***Private foundations: Organizations that are exempt under section 501(c)(3) are private foundations unless they are public charities: that is, churches, schools, hospitals, governmental units, entities that undertake testing for public safety, organizations that have broad financial support from the general public, or organizations that support one or more other organizations that are themselves classified as public charities.
How does a private foundation 501c3 differ from a public charity 501c3? A private foundation is the broader, typically less desirable, cousin of the public charity. In fact, all 501c3 organizations are initially assumed by the IRS to be private foundations, unless they prove that they meet the requirements to be upgraded to public charity status.
A private foundation is, most commonly, an organization established to take one principal source of funding and use it to advance a particular purpose by making grants to public charities that support that purpose.
Primarily, private foundations do not carry out the charitable activities themselves, but act through making grants to other 501c3 organizations, especially public charities. A typical example of a private foundation would be a family setting up a private foundation to handle one million dollars and use it to make grants to public charities established for the prevention of animal cruelty.
Advantages of a 501c3 Private Foundation:
One benefit of a private foundation is that the board of directors can be composed entirely of family members, whereas public charities sometimes are required to have a majority of unrelated members. In the above example, this would allow the funding family to maintain control over the use of its funds, rather than using a public charity, where they give over control to those running the charity.
For this reason, some organizations prefer to remain a private foundation, an action that is permitted by the IRS even in cases where the organization operates as if it were a public charity. However, this comes with a few disadvantages…
Disadvantages and Compliance for 501c3 Private Foundations:
Private foundations are prone to misuse, largely because they can easily be used for self-profiting tax evasion and investment strategies. For this reason, the IRS has developed a set of detailed rules to govern these foundations and to have certain requirements it believes will keep their operations in check.
Private foundations are required to donate a set percentage of the fair market value of their investment assets each year – generally 5%. If they fail to do so, a penalty tax will be imposed. Moreover, private foundation 501c3 organizations are taxed 1-2% on the interest from their investment assets each year.
There are also penalty taxes imposed on several other transactions, such as self-dealing transactions, certain taxable expenditures, investments which jeopardize their charitable purposes, and taxes on certain stock holdings.
Otherwise, private foundations are very similar to public charities. Donations made to them are tax-deductible, and contributions received by them are tax-exempt.
WHAT IS A PRIVATE OPERATING FOUNDATION?
***Private operating foundation: A type of private foundation that lacks general public support (although it can have public support, even be supported entirely by public support), but makes qualifying distributions directly for the active conduct of its educational, charitable, and religious purposes. “Directly for the active conduct” means that the distributions are used by the foundation itself to carry out the programs for which it is organized and operated. Grants made to assist other organizations or individuals are normally considered indirect.
Here is a way of looking at the difference between private foundations and private operating foundations: the private foundation typically makes grants to other 501c3’s, who perform the nonprofit mission, whereas the private operating foundation, on the other hand, performs the nonprofit mission itself.
This is a hybrid of a private foundation and a public charity. A private operating foundation uses at least 85% of its adjusted net income or minimum investment return (whichever is lower) for the operation of its own charitable activities. A typical example would be a museum or preservation of a historical farm, or any organization operating as a public charity but wanting to maintain family control and so remaining a private operating foundation.
A private operating foundation may seem like the best of both worlds, but it is important to remember that it comes with significantly higher regulations and the requirement that financial tests be met each year to prove it is not functioning merely as a private (non-operating) foundation (In addition to the 85% test mentioned above, a private operating foundation must meet one of three other tests each year, essentially requiring that either 65% of its assets be directly devoted to exempt purposes, or 67% of its minimum investment returns be donated directly to exempt purposes, or “substantially all of its support” be received from the general public and five or more exempt organizations that are not private foundations).
It is generally easier for a private operating foundation to obtain outside funding, especially because private foundations can satisfy their annual donation requirements discussed above by making grants to other 501c3 organizations, including to private operating foundations. Note that private operating foundations do not have this annual donation requirement – instead they must meet the tests described above.
For organizations that want to be controlled by one family, and/or funded primarily by one source, that want to carry on their own work, and might also be seeking funding from the public and from other 501c3’s, the private operating foundation may be a good idea. For those who will be controlled and/or funded by one primary source and would prefer making donations to other 501c3’s over actually performing tax-exempt activities, the private foundation will suit their interests better.
Conclusion:
So, what is a 501c3? It’s the perfect way to ensure all your funds and energy are directed into your charity rather than going through the tax and hassle of doing the same work without the 501c3 tax-exempt structure.
501c3 status will give you tax-exempt contributions, make donations tax-deductible, give you credibility and eligibility for grants, and help generate more enthusiasm in donors for the charitable work you’re already doing.
Still not clear on what a 501c3 is? Take a look at our FAQ below or request a free personal consultation for more information.
Start fulfilling your dream now, fill out our online form to get the process started.
501C3 Resources
FAQs
The answer to this question is not a simple one. Over the years we have learned to be very careful about how we answer it. When you do achieve tax-exempt status with the IRS, that status is retroactive to the date of your filing your articles in your state and picks up any donations that are made after the date of incorporation. That would seem to make it an easy answer. But what about the person who tries to do the application himself or herself, or what if the person uses someone who is not experienced to do the application? What if the person fails to get tax-exempt status with the IRS? The IRS rejects lots of applications. What happens then? Those donations would NOT be tax-deductible. That could be very unfortunate, possibly disastrous for the donor. And very problematic for you because you issued the tax-deductible receipt. If you use our service to obtain your 501c3 status, you can give tax-deductible receipts as soon as you are incorporated. Why? Because we have a 100% success record with the IRS over 39+ years. We would not take you on as a client if we felt there was a chance of your not receiving tax-exempt status.
How many do we need? How do we find them? Who are they?
Directors have 100% control of the corporation. It is very important that you have trustworthy directors. The IRS requires a minimum of three. You can as many as you like. In fact I once sat on a Board of Directors with 36 members. We recommend an odd number to avoid a deadlock in voting. The directors vote for the officers (president, vice-president, secretary and treasurer) and can normally change them at any time (absent a contract to the contrary). Selection of directors is so important that in many cases, we spend time with our clients helping them choose. There are many factors involved. This is a good example of how valuable our years of experience can be for you. It is not unusual after discussion to choose different directors than those originally in mind. I’ve seen just about everything in my years of doing 501c3s. Here’s a brief story to keep in mind: MY very first client operated a prominent organization on Long Island for several years. They decided to expand their board of directors from 3 to 30. After a very successful event raising over a MILLION dollars, the Board of Directors FIRED the founder! After years of sweat and toil in his own nonprofit, he was unemployed. Choose your directors wisely. And when you become a client, you may want to have a discussion about this.
Do the directors and officers have to live in my state? Be U.S. citizens?
No, they can live anywhere in the U.S. or reside abroad. They can be U.S. citizens or foreign nationals. However, if a majority of your board of directors are not U.S. citizens or U.S. permanent residents, then there are additional complexities. Please call for additional information.
How long does the process take?
Once we get the Corporation Questionnaire and Documents back from you, we guarantee to send your application to IRS within 5-business days or we pay you $200. If your not in corporated yet, Your states takes varying amounts of time to file the Articles of Incorporation. Once we get the 501c3 Questionnaire from you, and the Financials, and a copy of your filed Articles of Incorporation, and your signed Adoption of Bylaws, we guarantee that all the information you provide us will be on the IRS website within 5-business days, or we pay you $200. After we upload the documents to IRS you go online and sign the application we have prepared for you and pay the IRS User Fee, it is usually 2 to 3 months before you have your IRS Determination Letter (501c3 tax-exempt status). Sometimes, if the IRS gets behind in its caseload, or if your case is very complex, or if the IRS needs additional information from you in order to make its determination, it will take longer.
Will your fees be tax deductible?
Lets think about this your NOT yet a tax-exempt entity, so how could it be a tax-deductible gift and receive a tax-deductible receipt. Well, you can loan the funds to your organization and be reimbursed when the organizations get funds. Our fees is a valid expense for your organization is allowable on your IRS 990 tax filing. Here’s the good news: We have a special legal document and procedure ($200) that assures you the fees you pay us WILL be be tax-deductible to you (or whomever pays our fees).
The answer to this question is not a simple one. Over the years we have learned to be very careful about how we answer it.
When you do achieve tax-exempt status with the IRS, that status is retroactive to the date of your filing your articles in your state and picks up any donations that are made after the date of incorporation. That would seem to make it an easy answer.
But what about the person who tries to do the application himself or herself, or what if the person uses someone who is not experienced to do the application? What if the person fails to get tax-exempt status with the IRS? The IRS rejects lots of applications.
What happens then? Those donations would NOT be tax-deductible. That could be very unfortunate, possibly disastrous for the donor. And very problematic for you because you issued the tax-deductible receipt.
If you use our service to obtain your 501c3 status, you can give tax-deductible receipts as soon as you are incorporated. Why? Because we have a 100% success record with the IRS over 39+ years. We would not take you on as a client if we felt there was a chance of your not receiving tax-exempt status.
Directors have 100% control of the corporation. It is very important that you have trustworthy directors. The IRS requires a minimum of three. You can have as many as twenty. We recommend an odd number to avoid a deadlock in voting. The directors vote for the officers (president, vice-president, secretary and treasurer) and can normally change them at any time (absent a contract to the contrary). Selection of directors is so important that in many cases, we spend time with our clients helping them choose. There are many factors involved. This is a good example of how valuable 39+ years of experience can be for you. It is not unusual after discussion to choose different directors than those originally in mind.
I’ve seen just about everything in my 39+ years of doing 501c3s. Here’s a brief story to keep in mind: A man operated a nonprofit organization for 16 years. He, his wife, and a third director comprised the board of directors. When his wife divorced him, she joined up with the third director, and they removed him from his organization. After 16 years of sweat and toil in his own nonprofit, he was sleeping in his car. Choose your directors wisely. And when you become a client, you may want to have a discussion about this.
No, they can live anywhere in the U.S. or reside abroad. They can be U.S. citizens or foreign nationals. However, if a majority of your board of directors are not U.S. citizens or U.S. permanent residents, then there are additional complexities. Please call for additional information.
Once we get the Corporation Questionnaire back from you, we guarantee to send your documents to you within 5-business days or we pay you $200. States take varying amounts of time to file the Articles of Incorporation. Once we get the 501c3 Questionnaire from you, and the Financials, and a copy of your filed Articles of Incorporation, and your signed Adoption of Bylaws, we guarantee that all the information you provide us will be on the IRS website within 5-business days, or we pay you $200.
After you go online and sign the application we have prepared for you and pay the $600 IRS User Fee, it is usually 2 to 3 months before you have your IRS Determination Letter (501c3 tax-exempt status). Sometimes, if the IRS gets behind in its caseload, or if your case is very complex, or if the IRS needs additional information from you in order to make its determination, it will take longer.
At the time of signup, there is not yet a tax-exempt entity to which you can make a tax-deductible gift and from which you can receive a tax-deductible receipt. So how can your fees be tax-deductible? Here’s the good news: We have a special legal document and procedure ($200) that assures you the fees you pay us WILL be be tax-deductible to you (or whomever pays our fees).
Other than your corporate documents (Articles, Bylaws, etc.), we do not handle anything on the state level. State, county and city laws and regulations vary state by state, county by county and city by city. Normally, you should be able to handle them on your own. Likewise for state tax-exempt status (automatic or almost automatic for most states) Click here to see what your state requires for state tax-exempt status.
We e-mail you our Corporation Questionnaire and 501c3 Questionnaire(s). They are Word documents and consist of questions designed to elicit the required information from you. You type your answers right on the Questionnaires and e-mail them back to us. In this way, we get all the information from you to prepare all your documents. Of course, we give you guidance in answering the questions right on the questionnaires themselves (tips, pointers, helps, samples, suggestions, etc.), and we are also available by phone should you need additional guidance.
It is complex to secure nonprofit status, but once you have the status, it is surprisingly easy to do the bookkeeping in most cases. Financial tax returns are easier than for profit organizations. Until you bring in more than $50,000 annually, you can file a little 5-minutes online return, no financials. As you grow and get larger, you will want a CPA to prepare your 990 returns. There are no federal tax returns required for churches that have “church” status from the IRS. Most states require no tax returns from the organization (California is an exception; there may be others). If you are a private foundation, the 990-PF is more complex. With any organization, you need to keep good track of income and expenses.
The cost is the same. Preparing Articles of Incorporation is a very simple matter, but we don’t suggest you try to do it on your own. Seventy-five percent of people who come to us with their Articles already filed satisfied their state’s requirements but did NOT satisfy the IRS requirements, so their Articles have to be amended. This is not easy, and if requested to do that, there is an extra fee which is not insubstantial.
Even if you have filed your Articles of Incorporation, we still need to prepare for you four other very important legal documents that are necessary for a secure legal foundation for your nonprofit.
Be careful. There may be a problem lurking here. Tax-exempt status from the IRS is not something that can be passed around like a winter jacket.
If you are under someone else’s nonprofit, they are completely responsible for you in every way, especially including liability. So they will have to control you for their own protection. Is this something you want? Do they want the added responsibility and liability?
The IRS says that if you are going to be a subordinate organization included in a group exemption letter, you must be, in relation to the central organization, “subject to its general supervision or control.” Is that something you want? Will you truly be subject to the general supervision or control of that organization? Sometimes they just want a percentage of your income and then turn their head the other way. Be careful. You could be looking at problems with the IRS.
Good news! Not at all. We can resolve all of these problems for you such that these problems will not in any way affect our ability to get your 501c3 status for your nonprofit.
A good friend sent us an e-mail stating, “We are quoting $8,000-$10,000 for fees for a simple nonprofit plus the costs [this was back in 2010—fees are probably higher now]. The most recent organization I worked on was an educational nonprofit which ended up paying close to $15,000….”
Clients have come to us with quotes as high as $15,000 from other accountants or even lawyers they have contacted. (This was before the IRS greatly increased the paperwork for 501(c)(3) applications in 2006.) One client said she had paid her lawyer $19,000 and she still didn’t have her 501c3 status.
Although our founder, Eric J Rogers, CPA, is New York State Licensed CPA does NOT give you any specific legal advice. We have an affiliate organizations that takes your through the process of incorporation regardless of your state. We will pick up the process of your tax exemption application after your incorporated correctly. We have done for over 30+ years. We have done more than 2,000+ 501c3s and we have a 100% success rate with the IRS.
See what our clients have to say about us.
Different states call the basic organizational document by different names: Articles of Incorporation, Certificate of Formation, Certificate of Incorporation, Articles of Organization, Articles of Agreement, Articles of Association, or Charter. This is sometimes called the constitution or charter of the organization. For simplicity, we call them Articles, or Articles of Incorporation.
Yes. You can have your nonprofit office in your home, and your church or congregation can meet in someone’s home. Neither of these situations will keep you from getting tax-exempt status. To be classified as a school, you must have facilities where the educational activities are regularly carried on. If your school does not have facilities, it can still get tax-exempt status as an educational organization.
Actually, it’s only your state that can file your Articles. We prepare your Articles and cover letter to meet all your state requirements and e-mail them to you as PDF files. You print them out and follow our simple and precise instructions. We tell you how many originals and how many copies you need to mail and how to make out your check to your Secretary of State (may be a different administrative office in your state). Very easy. “Paint-by-the-number.”
You can obtain tax-exempt status for a nonprofit organization on the basis of a future plan. This is not true of church status. You must have a current operating church to obtain church status. Churches do not file any tax returns with the IRS. A very small church, and/or one made up mostly of family members, may obtain 501(c)(3) status as a general religious nonprofit.
The IRS charges a $600 User Fee to process your application.
If your projected annual gross income for your first three years of operation is under $50,000 per year, then you qualify for Form 1023-EZ. For this, the filing fee is $275.
We e-mail you each Questionnaire as a Word document. After saving the document, you type the answers right on the document and send us a reply e-mail, attaching the document to it.
From the time we receive your completed Corporation Questionnaire, we guarantee to e-mail your corporate documents to you within 5-business days or we pay you $200. From the time we receive your completed 501c3 Questionnaire and Financials, and a copy of your filed Articles of Incorporation and signed Adoption of Bylaws, we guarantee (and pay you $200 if we fail) to have your application (with all the information you have provided us) onto the IRS website ready for your signature and payment within 5-business days. The 5-business days excludes weekends, U.S. national holidays and times our web site says we are closed. Now that is fast!
This is where the really good news comes in. You don’t have to struggle on the IRS website to figure out what you are supposed to do. We go onto the IRS website with all the information you have provided us and enter all of it for you. All you have to do is just to go on the IRS website and sign the application we have prepared for you and to pay the $600 IRS User Fee. Talk about easy! That is easy!
For the 1023-EZ, it is somewhat different. You go online yourself and copy and paste onto the IRS website what we have provided for you.
Most often, when you send in your application to the IRS, that is the end of the process for you. You may receive a letter acknowledging that your application has been received by the IRS. Then you wait until you receive your determination letter recognizing your tax-exempt status. However, depending on how complex your nonprofit is, it is possible for the IRS to have additional questions for you. This usually doesn’t happen with our clients because we know what the IRS is looking for and how to structure your application so it is easy for the IRS to process and approve. Responses to these questions enable the IRS to get a better understanding of your operations in order to determine that your organization is tax-exempt. Sometimes there are questions that were not asked on the Form 1023.
If they asked all the questions on the form that would cover every situation for the myriad types of nonprofits that the IRS handles, it would be a 100-page form. Therefore, it is not a negative if you get further questions from the IRS. If you get additional questions, you will prepare the answers and send them directly to the IRS (we give you a sample cover letter to use). If you don’t understand any question from the IRS or feel you need some direction in answering the question, we are here to help you understand it and guide you in the answer.
Normally, no. In complex cases, or in cases where you desire to have formal (voting) members, we will decline to perform our service for you. We advise you to seek the services of a lawyer in such cases. A church/congregation with informal members (which is what we recommend) is never a problem. (Informal members may be called members, but they do not have voting control over the church/congregation.) Because of our 100% success rate with the IRS, we may also decline a case where we are not sure we can obtain 501c3 status for your nonprofit.
We put basic information on our web site for clients who so desire. Those who see your listing can find out basic information about your nonprofit and how to contact you. There is NO CHARGE for this service. Here is a link to the starting page.
Once we finish the process for you, we step out of the picture. You are completely independent. You are not under our “umbrella” or tied to us in any way. We email “Your Road Ahead” to you which is full of helpful advice for your use in the days and years ahead.We can prepare for you various corporate documents (Unanimous Written Consent of Directors for Corporate Resolutions, Resignation of Director or Officer, Unanimous Written Consent of Directors to Set Time and Date for Annual Meeting of Board of Directors, Unanimous Written Consent of Directors to Change Location of Annual Meeting of Board of Directors, Unanimous Written Consent of Directors to Establish End of Annual Accounting Period, Waiver of Notice and Consent to Holding of Annual Meeting of Board of Directors, Minutes of Annual Meeting of Board of Directors, Waiver of Notice and Consent for Special Meeting of Board of Directors and Minutes of Special Meeting of Board of Directors). We can also register your nonprofit in other states where you may wish to operate. We will also amend your Articles of Incorporation and/or Bylaws if you so require.We often get questions from former clients, and where possible we answer them or point them in the right direction. You are in our family of 3,000+ clients that stretch all around the world. Stay on our mailing list to stay up to date on latest IRS developments and what is going on in our family.
Plan B means already incorporated. Plan A means not incorporated.
Please note that our refund policy is not set up for people who change their minds after they get started. “Be sure you’re right, then go ahead.” –Davey Crockett
The Corporation Questionnaire will not normally take more than about 45 minutes. (Add another 30 minutes to read our introductory material.) The 501c3 Questionnaire and Financials will normally take no more than a couple of hours or so (the IRS does require a lot of information). But you can work on those while you are waiting for your Articles of Incorporation to come back from you state. Count on another hour or so if your organization is a church or school. Add more time if your nonprofit is very complex.
You have two months to send us back your completed questionnaires and Financials. If you wish, you may extend this period for each by paying $100 per month (extension fee). The same applies to paying any installment payments. If you have not completed both sets of questionnaires (Corporation and 501c3 and Financials) by the end of six months (and made any payments due), we remove you from our database, and you have lost your investment.
We do not share or sell any information to third parties. We are not only a business but rather a 39+ year endeavor to help you Change the World through your nonprofit. We are an open and transparent community, and as such we freely share non-legal-non-confidential information within our 501c3 community, such as in newsletters.
We believe everything we do in life should be the best we can do and that your legal documents should not only be excellent from a legal point standpoint (most important), but also be aesthetic and pleasing to the eye. Generally, legal documents are pretty boring. At least, ours look good! (Exception: Articles of Incorporation and government forms have to follow a specific format and cannot be made to look good.) Take a look at our documents.
No problem. We incorporate and obtain tax-exempt status for people all over the world. That’s one advantage of doing everything by e-mail. Your directors do not need to be U.S. citizens nor reside in the U.S. However, if a majority of your board of directors are not U.S. citizens or U.S. permanent residents, then there are additional complexities. There are additional factors if you operate your organization outside the USA. Please call us for additional information.
A Group Exemption Letter is given by the IRS to a central organization that has subordinates (or chapters) so that the subordinates or chapters do not have to file for their own 501c3 tax-exempt status. We do both the application for group exemption for the central organization as well as prepare the corporate and incorporation documents for the subordinate organizations. The Group Exemption letter can be useful for churches that wish to have “daughter” churches under a head or principal church (denominational model) as well as for organizations with many chapters, such as the Rotary Club or the Boy Scouts. Also good for sports organizations with many clubs throughout the country. Please call us for more information, including information about our fees.
People often think they should file their Articles of Incorporation in Delaware or Nevada because they have heard that these states are better to incorporate in. This is not true. If you have a profit corporation, then Delaware or Nevada can have substantial tax advantages. But there can be no tax advantages for a nonprofit, because there are no taxes! The disadvantage of filing in Delaware or Nevada is that you will have to relate to that state as well as to the state you are operating in. So you end up having to relate to two states. If you have filed in Delaware or Nevada but are operating in State X, you will have to register your Delaware or Nevada corporation in State X as a foreign (i.e., foreign to State X) corporation. You will have to file any annual or bi-annual statements in both states.
The basic rule is that you must either file Articles in the state you are operating in or, if you file in another state, you must register that nonprofit corporation in the state you are operating in. What if you are operating in more than one state? You will file in one of those states and then register that nonprofit in the other states.
In some cases, you may have the choice to file in either State X or State Y or State Z because you aren’t really operating in any state (foreign mission work, for example). In this case, we can tell you which states are most favorable to incorporate in. Not all states are equal!
If an attorney prepared your Bylaws, you can use them. Otherwise, use our Bylaws. We prepare Bylaws for all our clients’ nonprofits. We also prepare two other documents to accompany them: Unanimous Written Consent of Directors (or Trustees) Adopting Bylaws and the Certificate of Secretary re Adoption of Bylaws. If an attorney prepared your Bylaws, presumably he or she prepared these other documents for you as well. This doesn’t always happen, but you should have these two other documents. Then, if you prefer to use your Bylaws, the two documents—Unanimous Written Consent of Directors (or Trustees) Adopting Bylaws and the Certificate of Secretary re Adoption of Bylaws—can be used for the Bylaws that he or she prepared for you.
You must have your Articles filed first, before we file with the IRS. In many states, Expedited Filing can be one day (see this link for your state: https://501c3go.com/cost-and-fees/state-filing-fees/). Also, you would incur Rush fees if we have less than 5-business days to prepare your documents (https://501c3go.com/rush-services/).
Higher income and/or assets means more complexity and more scrutiny from the IRS. This can result in more supplemental questions from the IRS and these questions tend to be more complex. It is also our experience that those of you whose nonprofit will have higher income and/or assets also have more questions for us going through the process. In both cases, we spend more time on your case.
We normally do NOT charge more for higher income/assets but there are cases where we do.
Anyone who is serious about his or her nonprofit should never need an extension fee. You can finish your questionnaires in a couple of hours (give yourself an afternoon if you are slow or struggle with English). We give you two months to finish your questionnaires. Countless people over many years have thanked us and said, “If it were not for the extension fees to prod us along, we never would have gotten it done.” Even though our process is as easy as possible, people tend to procrastinate—just a natural human tendency. We want to see your nonprofit get off the ground. We want to see you have success with your nonprofit. We give you a little incentive not to procrastinate.
But there is another reason for extension fees. We are on a moving conveyor belt. There are 50 states that are constantly modifying their service and constantly changing their policies, their fees, and especially their forms requesting information. These changes have to be reflected in our questionnaires. This makes our questionnaires living documents, changing with the states as they change. The IRS is also in a state of flux as they process a growing volume of applications and are continually updating their requirements.
We must always be taking these changes into account. This means that our questionnaires must be constantly updated and improved. An out-of-date questionnaire will give us wrong answers. Also, we are constantly improving our process and making improvements. If clients were to use out-of-date questionnaires without these improvements, your answers would not be the best ones for your state and the IRS. Undoubtedly mistakes would occur because with the myriad of details involved, all it takes is for one thing to be out of place, and there is a mistake. Dealing with the states and the IRS, we don’t want mistakes. That’s why we can’t stretch out the time for our clients to return our questionnaires to us.
A final reason is that people who take longer tend to let other things get in their way, and so the process gets more cumbersome. They lose the rhythm of the process, forget where they are in the process, have more questions for us, etc. All this ends up being more time-consuming, not only for them, but at our end, too.
Should I have my directors and officers first? Do I need a mission statement or business plan before I get started with you?No, none of the above. The best thing is to sign up with us before doing anything. We’ll tell you what you need as we go through the process together. That way, you won’t mistakes and spin your wheels. Don’t even think of selecting your directors and officers before you have our written material and podcasts. In our 38+ years of experience, we have watched nonprofits and seen everything go wrong. We want to make sure everything goes right as you build the foundation in launching your nonprofit.