The IRS tax exemption process can be long and complicated, but it is a staple feature of nonprofit organizations - you will not have to pay taxes on any donations or grants you receive.
However, because of this special status, the IRS does conduct stricter scrutiny.
There are two ways to apply for tax exempt status:
For organizations that expect to take in less than $50,000 per year for the first three years:
The IRS allows these organizations to submit a simple, two-page online application. The response time is typically two to three weeks.
For organizations that expect to take in $50,000 or more:
These organizations will have to file a longer paper application more akin to a detailed income tax filing. The full form will ask about expected revenue, expected expenses, and expected activities. The turnaround time is at least 6 months, sometimes longer if they require supplemental information.
While this process may seem daunting, our firm can help advise you on the best path forward. Please contact us to schedule a consultation!