Filing for 501(c)(3) Status

Becoming a 501(c)(3) lacrosse organization is not for the faint of heart. It involves a lot of paperwork and some expense. Think carefully before you begin the arduous process of becoming a tax-exempt, nonprofit lacrosse organization. If your purpose is simple and/or time-limited, you may be able to accomplish your mission without tax-exempt status.

501(c)(3)

This is the most common type of nonprofit. It includes organizations that are religious, educational, charitable, scientific, and literary; groups that test for public safety, foster national or international amateur sports competition; or organizations engaged in the prevention of cruelty to children or animals.

This type of nonprofit applies for its status using IRS form 1023 and files annually form 990, 990EZ, or 990-PF. Contributions are usually tax-exempt.

Before you can apply to the IRS for tax-exempt status, your organization must first become a corporation. Incorporation will protect board members and other individuals in your organization from being held personally liable in case of a lawsuit. Nonprofit incorporation is very similar to creating a regular corporation except that a nonprofit must take the extra steps of applying for tax-exempt status with the state in which it incorporates and with the IRS.

Nonprofit incorporation usually involves these steps:

Choose a name that is legally available in your state.
File your "articles of incorporation," (sample) and pay a filing fee.
Apply for federal and state tax exemptions.
Create bylaws (sample) that will dictate how the corporation is run.
Appoint an initial board of directors.
Hold the first meeting of the board of directors.
Apply for any licenses or permits that your corporation will need to operate in your state and local municipality.

Your state's corporate filing division is usually part of the secretary of state's office. You can also look up your state office through the National Association of State Charity Officials (NASCO). You can request a packet of nonprofit materials from that office which will include sample articles of incorporation, the state's laws on nonprofit corporations, and instructions on how to find an available business name.

After you have filed all the paper work for nonprofit incorporation in your state, and received a copy of your articles of incorporation, you can move on to submitting your application to the IRS for your federal nonprofit status as a 501(c)(3) organization. It is best to file within 27 months after the date of your incorporation.

The forms you must complete for the IRS include:

IRS Form 818, User Fee for Exempt Organization Determination Letter Request
IRS Package 1023, Application for Recognition of Exemption.

IRS publication 557, Tax-Exempt Status for Your Organization, provides instructions on filling out these forms. You can get all of the forms and Publication 557 by calling 800-TAX-Form, or they can be downloaded from the IRS website, www.irs.gov.

The IRS will review your application and send you a letter indicating that it has approved your nonprofit status. Or, the IRS might ask you for more information. It can also deny your application. If that happens, don't give up; contact a lawyer who specializes in nonprofits.

You may need to apply to your state for tax-exempt status as well. Some states require a separate application to get a state tax exemption; some states are satisfied with your federal tax-exempt status, and in others, you will need to send a copy of your IRS determination letter. To find out what your state requires, contact your state tax agency.

Apply for a solicitation license from your city. Check to see if your city requires you to have such a license before you can solicit funds.

Tips

Don't forget to create a name for your nonprofit, a task that is more involved than you might think.
Many states supply materials such as templates for your articles of incorporation. These forms may be online and you may even be able to file them online. Check your secretary of state's office website which you can probably get to through the main site of your state. You may also send a letter to your Secretary of State requesting that information on incorporating as a nonprofit be sent to you.
Most state websites provide a link to the state's nonprofit corporation laws. You will want to look at these and know how to reference them as you prepare your incorporation paperwork.

Information retrieved from: Fritz, Joanne. Nonprofit Incorporation – An Overview, Nonprofit Incorporation Begins at the State Level. Retrieved from http://nonprofit.about.com/od/nonprofitbasics/a/incorporating.htm.

For more information and to register for your 1-Year free trial website from US Lacrosse, go to www.USLaxTeams.com or email Mark Kamyszek at mkamyszek@uslacrosse.org.

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