Starting Out Tax Exempt

The IRS website provides information about critical points of intersection between exempt organizations and the IRS. The content in the site includes explanatory information, and links to forms that an organization may need to file with the IRS. The materials cover five stages in an organization's life cycle:

1. Starting Out: Creating an organization under state law, acquiring an employer identification number, and identifying the appropriate federal tax classification.
2. Applying for Exemption:  Acquiring, completing, and submitting application forms; how the IRS processes applications; and getting help from the IRS during the application process.
3. Required Filings:  Annual exempt organization returns, unrelated business income tax filings, and other returns and reports that an organization may have to file.
4. Ongoing Compliance:  How an organization can avoid jeopardizing its tax-exempt status, disclosure requirements, employment taxes, and other ongoing compliance issues.
5. Significant Events:  Audits, private letter rulings, and termination procedures.

Did you know there are many types of nonprofit tax exempt business classifications? Below are a few. For more information, visit the IRS's website.

• Charitable organizations (Code section 501(c)(3))
  • Public charities 
  • Private foundations 
• Social welfare organizations (section 501(c)(4))
• Agricultural/horticultural organizations (section 501(c)(5))
• Labor organizations (section 501(c)(5))
• Business leagues (trade associations) (section 501(c)(6))

If you are considering starting a nonprofit, or you are managing an existing nonprofit in the start-up stages, definitely visit the IRS's website.

http://www.irs.gov/Charities-&-Non-Profits/Life-Cycle-of-an-Exempt-Organization