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:https://apps.irs.gov/app/eos/
- 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
- This site has information on the lifecycle of a public charity:https://www.irs.gov/charities-non-profits/charitable-organizations/life-...