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Pros & Cons of 501(c)(3) Status


501(c)(3) Organizations Enjoy the Following Privileges:

Exemption from Federal Income Tax
Exemption from F.U.T.A. (federal unemployment tax)
Tax Deduction for Donors
Eligible for Government & Foundation Grants
Eligible for Bulk Mailing Permit
Gambling Permits (in some jurisdictions)

501(c)(3) Organizations Must Fulfill the Following Responsibilities:

Keep Adequate Records
File Required Returns
Provide Donor Substantiation
Obey Disclosure Laws
Generate Public Support
Avoid "Excess Benefits" for insiders
Shun Political Activity
Limit Legislative Activity
Limit Unrelated Business Activity

For more about the responsibilities of 501(c)(3) organizations, please give us a call.


If you're starting a new not-for-profit organization we can help you prepare your organization's 501 (c)(3) application for tax-exempt status.

Here's what's some of the items needed...

  • Articles of Incorporation containing the Exempt Purpose Statement as described in IRS Code section 501(c)(3) and defined in Treasury Regulation 1.501(c)(3)-1 Paragraph d and the Dissolution Statement described in Treasury Regulation 1.501(c)(3)-1 Paragraph b subparagraph 4 ("Organizational Test").

  • Employer Identification Number

  • By-laws of the Organization

  • Minutes of Board Meetings

  • Names, Addresses, and Resumes of Board Members

  • Names and addresses of all Active Members

  • Inventory of Assets like cash, furniture, equipment, property, pledges...

  • Inventory of Liabilities like mortgages, accounts payable, loans...

  • Rent/Lease Agreements and Contracts

  • Revenue and Expense Statements for the last four years or as far back as possible if your organization has been in existence for less than four years.

  • Written Reason for Formation and History of the organization.

  • Organization Mission Statement or Statement of Faith or Beliefs for Churches and other Religious Organizations.

  • Organization Activities, Operations and Programs Documentation including your statement of purpose & operations, food programs, fundraisers, flyers/brochures/pamphlets...

  • Financial Support Documentation including all sources of revenue like contributions, tithes, offerings, fundraisers...

  • Fund Raising Program Descriptions

  • IRS Processing/Filing Fee

We are happy to assist you with the preparation any of these items if you need help.

Let us help you setup and/or maintain your non-profit tax-exempt status by requesting a Free Consultation below.

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