News
Archive for the ‘Non-Profit’ Category
The IRS has established a procedure for charitable groups to apply for tax-exemption by incorporating as non-profits, known as 501(c)3 organizations. Doing so enables them to receive donations that are tax-deductible for donors, as well as receive grants from foundations and other funders.
While the procedure for applying for tax-exempt status is not difficult, it is strictly prescribed. In addition, individual states have their own rules regarding incorporation and tax-exempt status, and both levels of government have specific rules and reporting requirements to maintain a group’s status.
In simplest terms, an organization applies to the Federal Government to obtain an Employee Identification Number (regardless of whether they actually have paid employees). The group then incorporates in their home state. In Michigan, this process takes as little as four days and costs only $20.
(more…)
