Copyright 2014 by The University of Kansas Understanding
Nonprofit Status and Tax Exemption
Slide 2
Copyright 2014 by The University of Kansas Use legal counsel
when applying for nonprofit status and tax-exemption
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Copyright 2014 by The University of Kansas Key difference:
Nonprofit status is granted by the state, while the IRS grants
federal tax-exemption.
Slide 4
Copyright 2014 by The University of Kansas Three types of
federally recognized nonprofit organizations: Corporations
Unincorporated organizations Trusts
Slide 5
Copyright 2014 by The University of Kansas Corporations: Most
common choice for community organizations Are well understood
Promote continuity Limit personal liability
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Copyright 2014 by The University of Kansas Federal
tax-exemption: 501(c)(3): the "charitable tax exemption" Allows
exemption from federal corporate and income taxes Allows
solicitation of tax-deductible contributions 26 different
exemptions exist for different purposes
Slide 7
Copyright 2014 by The University of Kansas Ways to become
tax-exempt: Application Automatic recognition Using a fiscal
conduit
Slide 8
Copyright 2014 by The University of Kansas Weighing the
advantages and disadvantages of nonprofit and tax-exempt
status
Slide 9
Copyright 2014 by The University of Kansas Understanding when
you should (and shouldn't) consider applying for such status
Slide 10
Copyright 2014 by The University of Kansas Applying for
nonprofit status: Hire legal counsel Decide whether to apply Decide
the form you will take Decide the state Apply for nonprofit status
Be aware of requirements for reporting and renewal
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Copyright 2014 by The University of Kansas Applying for
tax-exemption: Hire legal counsel Determine eligibility Decide to
apply Obtain nonprofit status Decide the exemption your
organization is eligible for Apply for exemption Understand
requirements for reporting and renewal
Slide 12
Copyright 2014 by The University of Kansas Finding cheap help:
Ask, ask, ask! Legal Aid American Bar Association lists
Publications related to your cause