The last thing you want is for the IRS to reject your application. Simply put, be prepared. Read the directions on the form. Take note that there are different types of c 3 organizations, each with its own rules and regulations.
The IRS considers two main types of c 3 organizations:. After the IRS reviews your Form application and any supporting documentation, they will issue a determination letter. The letter stands as official recognition that your c 3 has tax-exempt status. The letter ensures that your donors will be able to claim their charitable gifts to your nonprofit on their individual or business tax returns. Also, as a nonprofit, you qualify for a few other benefits like bulk postal discounts, access to grants, and of course, income tax exemption.
Other nonprofits will usually offer to help if you ask them. As always, the internet offers a wealth of information about nonprofit filings. The IRS website is also quite informative. Note that changes of name or address must be reported on your next annual return , even if separately reported when requesting an affirmation letter.
Learn more about the benefits, limitations and expectations of tax-exempt organizations by attending 10 courses at the online Small to Mid-Size Tax Exempt Organization Workshop. More In File. Entity Manager License Manager. Records Manager Tax Manager. Compliance Services Full service compliance solutions for organizations throughout their entire lifecycles. Business Overview Nonprofit Overview. Industry Services Specialized licensing services for organizations in highly regulated industries.
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What Is The Board of Directors? If you submit the request in writing, be sure to include the organization's name, Employer Identification Number EIN , and authorized signature of the officer or trustee. If the IRS finds that your organization does not meet the requirements for c 3 , or that they do not have enough information, they will issue you an adverse determination letter. In the letter, the IRS will explain the reasons why you do not meet the requirements for a c 3 organization.
At this point, you have three options: you can file an appeal referred to as a "protest" , start a new c 3 application from scratch, or reconsider whether exempt status is an option for your organization.
An attorney can evaluate your situation and help you with the next steps. If you decide to appeal, you must send the protest to the Exempt Organizations Rulings and Agreements office. If they agree with you, they will send you a favorable determination letter.
If not, the office may send you a revised adverse determination letter, or forward your protest to the Appeals Office. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.
The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Grow Your Legal Practice. Meet the Editors. What Is the c 3 Determination Letter? The c 3 determination letter is proof of your organization's tax-exempt status.
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