Keeping Your Affiliate Legal

Keeping Your Affiliate Legal; Protect Your 501(c)(3) Status
Why be a 501(c)(3)?

  • All state, special interest, and chapter affiliates will benefit from a 501(c)(3) non-profit exemption.  A 501(c)(3) will exempt an organization from federal income taxes.

 Is your affiliate a valid 501(c)(3)?

  • To check if your affiliate is tax exempt:
  • There is another IRS website to check to find out if your affiliate is/was a tax exempt organization but it takes more work to find your affiliate information.  This site will provide more details about your affiliate.

How is your affiliate organized?

  • Individually – Only your affiliate uses this tax exemption
  • Group- The parent and subordinate organizations must agree on their 990 filing responsibilities.

What you need to do to keep your tax-exempt status

  • File an annual return to the IRS
  • Gross receipts are less than $50,000 → file e-postcard using 990-N form.
  • Gross receipts are less than $200,000 & total assets are less than $500,000 →file using either 990-EZ or 990 form.
  • Fail to file for 3 consecutive years → lose tax exempt status
  • What you need to know when filing the 990-N form
  • FEIN
  • Tax year you are filing for
  • Legal name and mailing address – is the name as it appears in the articles of incorporation or most recently amended name
  • Any other names the organization uses
  • Name & address of a principal officer
  • Web site address if the organization has one
  • Confirmation that the organization’s annual gross receipts are $50,000 or less
  • When is the 990-N due
  • If your tax year ends December 31, then you need to file by May 15 of the following year.  It should be stated in your by-laws.
  • If your tax year ends in a different month then you need to file by the 15th day of the fifth month after the end of your tax year.  So if your year ends July 31st; then you would need to file by Dec 15th.
  • Form 990-N must be completed and filed electronically. There is no paper form.
  • Can file form 990 (12 pages)  or Form 990-EZ (4 pages) instead
  • Form 990-N must be completed and filed electronically.  There is no paper form.

Where are your corporate documents?

  • Type of documents your organization should have
  • Articles of incorporation
  • IRS Determination Letter stating you are a tax exempt organization.
  • Board meeting minutes
  • Sales tax exemption certificate
  • Where are your corporate documents kept
  • High tech way – in the cloud
  • Low tech way – in a safe deposit box

Renewing/filing corporation documents

  • Agency where to file your corporate documents depends on the state
  • Secretary of State, Office of the Attorney General, Corporation Commission, or Department of Consumer & Regulatory Affairs
  • States vary in how often you need to renew your corporation documents and fees may be involved and you will need to check the state you are incorporated in.

Request a new IRS determination letter annually

  • To get an updated IRS determination letter call 877-829-5500 to request this letter.
  • If there is a change of address → complete form 8822-B

Life Cycle of a Public Charity