It may come as a surprise, but nonprofits are the third largest employer in the United States. They employ about 11.9 million people. These organizations range in size and type, but all have one similar goal, to help people. If you’re ready to take your charitable efforts to the next level by starting your own nonprofit, you will eventually need to file an IRS 501(c)(3) Application. The answers to these six questions will help you get started.
1. Does a nonprofit need an Employer Identification Number to apply?
Yes, you must obtain an Employer Identification Number (EIN) before applying for tax-exempt status. This should be done during the formation of your organization. You can do so by filing for one online, by fax, or by mail. You will then use this number when filing Form 1023 for tax-exempt status.
2. Can I use a mailing address on my IRS 501(c)(3) Application?
Yes, you can use a mailing address instead of a physical street address for your IRS 501(c)(3) application. There are several reasons to use a mailing address instead of a street address. A common reason is that the charitable organization does not have a physical headquarters that it operates out of. Another common reason is to protect the privacy of those working at the nonprofit organization or those being helped. For example, a battered women’s shelter would not want to put its street address on the application and have it become public record.
3. Can I have a lawyer file my IRS 501(c)(3) application for me?
Yes, you can have a legal representative file your IRS 501(c)(3) application. However, there may be some additional requirements. Typically, the attorney of record or an executive-level employee will represent the organization when filing for the exemption. However, the nonprofit organization must file Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization. This will authorize the IRS to speak with the representative about the application. The IRS will not discuss your application with anyone that they do not have this authorization for.
4. What is the cost of filing an IRS 501(c)(3) application?
Unfortunately, filing an IRS 501(c)(3) application is not free. If your organization qualifies to file a Form 1023-EZ, each application fee is $275. If your organization must file a Form 1023, the filing fee is $600. However, these fee amounts can change. An attorney with experience filing IRS 501(c)(3) applications will be able to provide you with the latest fee schedule.
5. What additional documents do I need for my IRS 501(c)(3) application?
You must submit more than just Form 1023 or Form 1023-EZ when submitting your IRS 501(c)(3) application. When submitting your application, you can only upload one file. This means you must gather the necessary documentation and then consolidate everything into one document file for submitting your application online. All applications are required to include the organizing document. This is the documentation that brought the nonprofit organization to life.
You must include several documents if they apply to your application. For example, this could include your organization’s bylaws, organization document amendments, necessary power of attorney forms, and applicable tax information authorization forms.
Finally, some documents are optional to include. If your responses are too long to fit in the provided space, you may include a supplement containing the rest of your answers. You can also include any additional information that wasn’t already requested but you feel will support your application. Finally, an expedited review request if you want to make one.
To help the IRS review your application, include your organization’s EIN on every page. In addition, label your supplemental documents with the part and line number that you feel it relates to.
6. Can I expedite my application?
The IRS has a general policy of processing applications and documents in the order that they are received. However, there are specific parameters where the IRS will deviate from this policy and process an application ahead of those previously received. If you are filing Form 1023-EZ, you cannot ask for it to be expedited.
- The organization has pending grant approval.
- The organization provides urgent disaster relief.
- An IRS error has caused undue delays.
To secure expedited application processing approval, you must request it. Include in your request a detailed explanation of the compelling reason. It is then at the IRS’s discretion whether it is approved.
Submit Your IRS 501(c)(3) Application
If you currently run or plan to start a nonprofit organization, your next step will be filing for tax-exempt status with the IRS. This means submitting a 501(c)(3) application by submitting a Form 1023 or Form 1023-EZ.
Schedule a consultation to speak with one of our experienced attorneys about your plans to file an IRS 501(c)(3) Application.
