Checklist for Non-Profit Organizations

1. Determine whether the advantages of being a non-profit exceed the substantial cost and time expenditures for your particular organization.



2. Develop appropriate ByLaws and Organizational resolutions, with the assistance of tax counsel, that will permit your organization to qualify as a not-for-profit corporation for state and federal tax purposes. Have these ByLaws legally adopted by the Organization.



3. Authorize the incorporation in the appropriate state under the Non-Profit Corporation Statute. The process is the public filing of Articles of Incorporation for a Non-Profit Corporation. This requires a state filing fee. Some states, such as Pennsylvania, require a paid legal advertisement.



4. Obtain a federal EIN # for the corporation from the IRS by filing a FORM SS-4.



5. Prepare IRS Form 1023 "Application for Tax-Exempt Status." This will require substantial work by your tax/business lawyer, accountant or treasurer and key officers. When this detailed form is fully prepared, it must be filed with the IRS. The IRS demands a "user fee" for the determination of non-profit status based upon the proposed revenue of the organization.



6. After the application is filed, frequently the IRS examiner asks for additional information. After several months the IRS then render its decision to grant or deny the request for tax-exempt status.



7. Appropriate books and records must be kept for the organization. This includes tracking of donations, expenditures and classifications of income. A periodic Treasurer's Report should be provided to the Board of Trustees and Membership.



8. Each year the corporation must file an annual Federal tax return with the IRS.

 

Ronald J. Cappuccio, J.D., LL.M.(Tax)
Counsellor at Law
1800 Chapel Avenue West
Suite 128
Cherry Hill, NJ 08002
856-665-2121