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Nonprofit Law/501c start up steps

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Question
I am in MD and wanting to tax exempt our youth team so that may have a bank account and use tax exemption status for team purchases. Can you please advise me of necessary steps and is this something I can accomplish on my own or do I need a attorney or accountant. Thank you

Answer
If you want donors to be able to deduct donations and
not to have your sales income, if any, taxed as long as
you comply with fundraising guidelines for 501(c)(3)
organizations, you would need to establish a charitable
trust, incorporate under a state's nonprofit corporation
law, or set up an unincorporated nonprofit association.
Your organizing document would need to state that it is
organizing under Internal Revenue Code Section 501(c)(3)
and have other required clauses. You would have at least
3 directors, with control of the board not in persons
related by blood, marriage or other business.

  After the initial set up, you would need to apply for
a EIN (tax id number) http://snipurl.com/gij28
and then you could apply for the IRS exemption
determination letter which could be effective
retroactively to the date of establishment of the
organization. The IRS minimum filing fee for such a
determination letter is $400 and goes up to $850.
http://goo.gl/TXwq9

But if the organization expects less than $50,000 in
annual gross receipts in each of the first 3 years and
has assets valued not above $250,000 then, generally it
would be eligible to file online through pay.irs.gov and
pay only a flat filing fee of $400, Churches, schools,
and some other types of organizations are not allowed to
file online.
http://goo.gl/4EiFdc

The Instructions are at
http://www.irs.gov/uac/About-Form-1023EZ

Detailed instructions to the new 1040-EZ is available at
http://www.irs.gov/pub/irs-pdf/i1023ez.pdf
and, starting on page 11 is a work-sheet and as explained
on page 11, "If you answer "No" to all of the worksheet
questions, you may apply using Form 1023-EZ."

Some people are able to do the set up without the assistance of an accountant or attorney.

Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com

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

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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 Harvey108@hotmail.com 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 "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

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.

Education/Credentials

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

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


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