When you apply for 501(c)(3) status, you will receive a Determination Letter from the Internal Revenue Service (“IRS”) alerting you that your status has been approved if your organization qualifies for 501(c)(3) status. The IRS issues Determination Letters only to those organizations that qualify for 501(c)(3) status.
The length of time that it can take in order to receive this letter will vary depending upon the circumstances. To ensure you obtain your approval in as timely a manner as possible, it is essential that you provide the IRS with all required documentation and information they need to approve your organization as a nonprofit organization. The Lotzar Law Firm P.C. can help you to complete your application so your organization will have the best chance of being approved in a timely manner.
Receiving a Determination Letter from the IRS
When applying for 501(c)(3) status, you must include Form SS-4 to apply for an Employer Identification Number, as well as:
- Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
- Form 2848, Power of Attorney and Declaration of Representative if someone other than the principal officer is representing the organization on issues that are related to the application.
- Form 8821, Tax Information Authorization, if you wish the IRS to be able to provide application information to someone other than a principal officer.
Form 1023 must be filed within 27 months of the time the organization is legally formed. However, if the organization is not a Private Foundation, it does not have to file Form 1023 unless it takes in gross annual receipts of more than $5,000. If it exceeds this threshold, then the form must be filed within 90 days of the tax year in which the money is collected. Provided the organization files by the deadline and meets the requirements, it can generally be recognized as tax-exempt from the date that it is created even if it has not yet received its Determination Letter.
The period of time that passes before a Determination Letter is received will vary, but it can be several months. If your application is “merit closed,” the IRS will likely inform you of its decision in under a month. A letter that your organization has been “merit closed” is not a “determination letter.” When an application is completed in full and the case can be closed right away, the process also moves quickly. However, if the application is more complex, it can take as long as 8 to 12 months before the Determination Letter is received.
Providing all appropriate information is the best way to ensure that you receive your Determination Letter in a timely manner. An experienced attorney at Lotzar Law Firm, P.C. will help you to complete your non profit organization application in Phoenix so you can get your nonprofit tax-exempt status approved.
- How Often Do I Have to Re-Certify a Tax Credit Tenant’s Household Income? - November 12, 2015
- Property Tax Abatement vs. Property Tax Exemptions – GPLET - November 12, 2015
- Can You Restructure Your Business Under the Arizona Entity Restructuring Act? - November 5, 2015
