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7/28/2019 Tax Exempt Non-Profit-Organization Attorney Lawyer
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TAX-EXEMPT & NON-PROFITORGANIZATIONS
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Benefits of Non-Profits
Limited liability protection of trustees andmembers
Exemption from federal income tax
Eligibility to receive tax-deductible contributions
Donors federal income taxdeduction
Lower postal rates on certain bulk mailings
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Disadvantages of Non-Profits
Limitations on the sources of income
Inability to divide profits among members beyond reasonablesalaries
Paperwork, paperwork, paperwork
Restrictions on the use of assets topurposes
Justifying tax exemption; public scrutiny; availability of financial documents topublic
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Apply for recognition of exemption via form 1023.
include
The Process- Federal
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EIN
Organizing Documents
Bylaws
Description of activity
Conformed copy
Financial statements showingreceipts and expenditure
Balance sheet for this yearand three previous years
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The IRS may ask for more information,so have prepared
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Copies of advertisingplaced
Copies of publications
distributed written
material used for
expressing views onlegislation
Copies ofleases/contracts/agreements
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Registration Time
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The IRS will issue letter or recognition or request for
additional information within 90 days for the following threecategories:
Those that are submitted on obsolete forms/do not include itemsspecified in procedural checklist.
Those that can be approved immediately based on informationsubmitted
Those that need minor additional information.
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All other applications referred to Determination Specialist
to approve, withdraw, or deny application.
Currently, the federal government is processing applications within 2 months to 12 months.
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Submit form 532 and a signed copy of articles ofincorporation to Secretary of State,
include:
The Process- State
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Corporate name
Place of principaloffice in Ohio
Purpose for formingcorporation
Names and
addresses of at leastthree (3)initialdirectors
Do not include anything with SSN or federal TIN
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Secretary of State hasdiscretion to accept or deny
application!
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If corporation plans to sell items to general public, it willneed to register for the appropriate vendors license
Regular: $25.00; Transient: $25.00;
Delivery: $25.00; Service: $25.00
The Process- Local
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Although a non-profit may make atremendous amount of income, it must remain
compliant. Non-profits must:
Restrictions on Non-Profits
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Absolutely refrain from participation in politicalcampaigns
Restrict lobbying activity
Ensure that its earning do not inure to private shareholders and
individualsNot operate for the benefit of private interests
Not operate for the primary purpose of conducting a trade or businessthat is not related to tax exempt purposes
May not have purposes of activities that are illegal
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To further remain compliant, a non-profit must:
File a990-EZ, 990PF, or submit an electronic 900 annually
Failure to file for three (3) consecutive years revokes exempt status
Must report significant changes to program services or organizational documents
The following forms may be filed electronically through the approved IRS 990 efilerprovider:
Maintenance- Federal
Form 990; Return of Organization Exempt from Income Tax; Form
990-EZ; Short Return of Organization Except from Income Tax,Form 990-PF; Return of Private Foundation; Form 990-N (e-
Postcard); Form 8868; Application for Extension of Time To File anExempt Organization Return; Form 1120-POL; U.S. Income Tax
Return of Political Organizations Form 7004; Application forAutomatic Extension of Time To File Certain Business Income Tax;
Information, and Other Returns (extension form for Form 1120-POL).
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To further remain compliant, a non-profit must:
Maintenance- State
Must file a Statement of Continued Existence every five yearsand keep all information regarding the statutory agent current.
Articles may be amended by voting members at a meeting
and a certificate containing a copy of the amended resolution,and a statement of the basis of the adoption must be
prepared, signed by an authorized officer, and filed with theSecretary of State.
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If $10,000 or less in gross receipts, then $2,000.00
If $10,000 or more in gross receipts, then $2,500.00.
Pre-Existing Organization, then $3,250.00.
The Costs
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Signed Fee Agreement and Consult Fee.
Signed Power of Attorney Form.
Mission Statement 3-5 sentences.
Contact information for your current accountant.
The Next Steps
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http://grantspace.org/Tools/Know
http://www.irs.gov/charities/
http://www.form-a-corp.com/non-
http://smallbusiness.findlaw.com/business-structures/non-profit/non-profit-tax-exempt-pro-con.html
Bibliography
http://grantspace.org/Tools/Knowledge-Base/Nonprofit-Management/Establishment/Pros-and-conshttp://www.irs.gov/charities/http://www.form-a-corp.com/non-profits_QA.phphttp://www.form-a-corp.com/non-profits_QA.phphttp://www.irs.gov/charities/http://grantspace.org/Tools/Knowledge-Base/Nonprofit-Management/Establishment/Pros-and-cons