How to Apply for Tax-Exempt Status
Tax-exemption can be a great advantage to a nonprofit. Donors can take a tax exemption for their gifts and the organization does not, in most cases, pay taxes.
The most common form of nonprofit is the 501(c)(3), a tax-exempt organization recognized by the IRS. But, there are many types of nonprofits that are registered by the IRS, and they all have different designations.
Does your organization have to become a tax-exempt nonprofit?
There are several classifications under which you can register your nonprofit organization. Determining which category to use is an important part of applying to the IRS.
The IRS does charge a non-refundable processing fee for exemption applications.
The time between incorporation as a nonprofit and receiving your tax-exempt status from the IRS can be tricky.
It is wonderful that you have jumped through all the hoops to become a tax-exempt, charitable organization. But now you must be careful that your actions don't draw attention from the IRS or cause you to lose your exempt designation.