Applying for 501(c)(3) Status for Your Non-Profit Organization


Applying for Tax Exempt Status

What started as an idea to help others has grown to have a life of its own.  You’ve selected and installed directors, incorporated, obtained an EIN, and registered with the state office.  Next, you are ready to apply for tax-exempt status.

If you have not done so already, you should establish a relationship with a qualified CPA in your area.  Then, to be sure your organization qualifies for (or needs) tax-exempt status, here are some factors to consider:

  • For the IRS to recognize an organization’s exemption, the organization must be organized as a trust, a corporation, or an association.
  • To be eligible for 501(c)(3) tax exempt status, the organization must have an exempt purpose.  Examples of exempt purposes are
    • charitable
    • religious
    • educational
    • scientific
    • literary
    • preventing cruelty to children or animals.
  • If you organization has an exempt purpose, you may not need to apply for federal tax exemption if the organization’s gross receipts are normally less than $5,000 per taxable year.

When you’ve considered these factors and decided tax-exempt status is right for your organization, the organization must submit a completed, signed, and dated Form 1023 to the IRS with the appropriate user fee.  The user fee is not less than $400 or more than $850, depending on your gross revenues.  For more information about applying for federal tax-exempt status, see the IRS publication on this topic.   We strongly recommend that you seek the assistance of a qualified professional in this process.

After you apply for federal tax-exempt status, don’t forget to do the same with your state and local governments, if necessary.  In Pennsylvania, at a minimum, you will need to complete and file Form REV-72 with the Pennsylvania Department of Revenue, Tax Forms Service Unit.

If you need guidance selecting the right CPA for your organization, or any other matter related to managing your business, the attorneys at the Scolieri Law Group, P.C. can help.  Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can take care of the details for you, including the formation of a legal business entity if needed.  Contact us today at (412)765-0546 or info@scolierilaw.com.