501(c)3 - STEPS

After hours reading I have found a great guide online by Sandy Deja's who wrote a book titled, Prepare Your Own 501(c)(3) Application.  It is set-up in a step by step, line by line approach.

What follows below is everything that has to be done to become a 501(c)3.  Don't feel like you need to read through it all but it does give you an idea as to what I am working on and why it is taking me awhile to get through everything.

Step 1: Incorporate: DONE
a) choose and apply for a name
b) write and file articles of incorporation
c) pay $125 fee

Step 2: EIN: DONE
a) apply for Employer Identification Number (EIN)
b) open back account with new EIN and corporation name

Step 3: Tax Exemption: LOTS TO DO
a) write narrative
b) complete form 1023 (26 pages of questions and additions write-ups)
b.1) complete and attach form 2848 (as part I, question 7)
b.2) attach articles of incorporation (as part II, question 1)
b.3) attach state filing certificate (as part II, question 1)
b.4) write bylaws (as part II, question 5)
b.5) write up including relations of board members to each other (as part V, questions 2a and 2b)
b.6) document describing qualifications, hours, duties (as part V question 3a)
b.7) write conflict of interest policy (as part v, line 5a)
b.8) document describing the goods, services and funds we provide to individuals (as part VI, line 1a)
b.9) document describing the goods, services, and funds we provide to organizations (as part VI, line 1b)
b.10) Description of fundraising activities (as part VIII, line 4a)
b.11) Description of oral contracts for individual fundraising (as part VIII, line 4b)
b.12) List states where Fundraising takes place (as part VIII, line 4d)
b.13) Description of activities taking place in Kenya and how they relate to our purpose (as part VIII, line 12a-12d)
b.14) Complete Financial Data Worksheet for years 2011-2013 including a)statements of revenues and expenses and b)balance sheet (as part IX)
b.15) Request for Definitive Ruling (as part X)
c) Complete Application check list
d) Appoint initial directors
e) create a budget for next 2 years
f) pay user fee of $850
g) sign and mail everything to IRS

Step 4: Wait 3-9 months to hear back from the IRS.  They are currently looking at the applications that were submitted in March of this year (6 months ago).  We will at this point either become accepted or not but even when we are accepted it is only probational and our status can be removed anytime over the next 4 years. - While there is nothing to do waiting might be the hardest part.

Step 5: 4 Years
The IRS wants to see that we are a viable non-profit, so we have to show them that we:
a) are doing what we said we would do
b) are bringing in money
c) aren't making a profit

501(c)3 status

We have been "in process" for awhile now on Mercy Partners getting their 501(c)3 status. We started the process in January of 2011 and honestly I have left most of the work to my husband, Joseph and our CPA.  I have never liked dealing with official documents, paper trails, and follow-up phone calls. In our home life Joseph takes care of all of these sort of things: the insurance paperwork and phone calls, he does the taxes or at least makes sure they are done, and gets the tags on the car each year.

I am very thankful for the work that both my husband and our CPA are putting into getting Mercy Partners tax exemption but to expedite the process I think it is time I read the "instructions"(see yesterdays post).

While I have been pushing to get the Mercy Partners website done I think it is important that I take a break from that for a couple of days and focus my attention to learning the ropes of applying for tax exemption.