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Nonprofit Law/booster nonproft application problem


Our high school band booster organization was formed and incorporated in 1977.  We have recently realized (only due to the fact the the school would no longer allow us to use their sales tax exempt number) that at the time nothing was filed to obtain 501(c)(3) status and no tax returns have ever been filed. When we discovered this we felt the need to correct this and become "legal"  We amended our articles to comply and filed Form 1023.  It was recently denied with a request for us to change the wording in our article (not a problem)--but also to agree that the effective date of exemption could not be retroactive.  The way I understand, this would open us up to having to file tax returns for the entire 36 years we were not exempt!  Or to pursue retroactive reinstatement we would have to file 990's for the entire time also??  Either way this is impossible.  Of course all work is done on a parent volunteer basis, typically a parent only serves as treasurer for 2 years or so and none of the records are still around beyond the most recent 5-6 years.  What can we do?

See IRS Publication 557 "Tax Exempt Status for Your Organization"
which has on page 24, right column, under the heading ""Effective
date of exemption" the following:
--- Start of Excerpt ---
organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. If the organization files the application within this 27-month period, the organizationís exemption
will be recognized retroactively to the date it was organized. Otherwise, exemption will be recognized only from the date of receipt.
---End of Excerpt---

The law is as you have written.  In other words, your corporation would need to file Form 1120 for any previous years.  I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. For the previous years you were not qualified as a 501(c)(3) organization.  We may want to discuss that your corporation dissolve and you form a new organization and have that new one apply for exemption. I would be willing to work on that matter, but I would need to spend a substantial amount of time and that would be beyond the scope of my offer of free services.  If you want to inquire about hiring me for such work, please contact me directly to the email address below.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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