Many homeschool organizations are finding that the new IRS Form 1023-EZ makes applying for 501(c)(3) tax status quite easy (compared to the full 26-page Form 1023!)
But, unfortunately, one homeschool group, Crossroads Co-op from Maryland, found their application held up because the IRS wanted more information. Specifically, the IRS asked for:
- An original copy of their organizing document. Fortunately Crossroads had Articles of Association complete with the IRS required language all ready to go!
- A detailed description of their activities including who, where, when, fees, and time and resources
- Actual revenues and expenses for 3 years.
I helped Crossroads write a reply to the IRS and in only 5 days, their 501(c)(3) status was granted!
We don’t think that the IRS was targeting Crossroads Co-op or homeschool groups; we think Crossroads was just randomly selected by the IRS to provide details.
The important lesson learned is that nonprofit organizations need to have their financial information and organizing documents ready to send into the IRS when asked.
Applying for 501(c)(3) tax exempt status is more than just filling out the Form 1023-EZ online. It involves properly structuring your nonprofit.
Crossroads had done that, so they were able to answer all the IRS questions and get their tax exempt determination letter in a timely manner.
If you need help applying for tax exempt status for your nonprofit organization, contact me.
Carol Topp, CPA