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Nonprofit Law/Relocating a nonprofit to another state

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Question
We established a nonprofit corporation in Georgia and waited for more than a year to be approved by the Internal Revenue Service as a 501c3. During this time, we did not launch any activities  under the nonprofit. While we did receive our IRS designation, we have moved to another state.  We did not even establish a bank account for the nonprofit.  Given the lack of activity, is it possible to dissolve the nonprofit in Georgia and relocate or establish the nonprofit in another state without having to file again with IRS?

Answer
If you dissolve the nonprofit in Georgia and re-establish the nonprofit in another state you would have to file again with the IRS if you are required to file with them.  See the IRS Publication 557 "Tax Exempt Status for Your Organization" at http://www.irs.gov/pub/irs-pdf/p557.pdf in the right column on page 25 under "Organizations Not Required to File Form 1023" discusses who does not need to file.

The instructions for Form 990, which is for exempt organizations has, on the right column of page 19, "If an exempt organization becomes a different legal entity, such as by changing its legal structure from a trust to a corporation or by dissolving in one state and incorporating in another, then a new exemption
application is required to establish that the new legal entity qualifies for exemption."
www.irs.gov/pub/irs-pdf/i990.pdf

Reincorporate" means that an organization, that is already incorporated, does another incorporation. An IRS Revenue Ruling from 1967 (Rev. Rul. 67-390) is very clear that such a reincorporation in another state would require a new exemption application.
---Start of Excerpt--

Case 4.  An exempt organization incorporated under the
laws of one state was reincorporated under the laws of
another state with no change in its purposes....
In each of the four cases described above a new legal entity
has been created.  Each new entity must establish its exemption in
accordance with the regulations set forth above.  Accordingly,
each of the above organizations must file an application for
exemption to establish that the new entity qualifies for exemption
under the Code and applicable regulations.
---End of Excerpt--
www.irs.gov/pub/irs-tege/rr67-390.pdf

In June of 2009, a committee of the American Bar Association (ABA)
brought up to the IRS a request that they change that ruling.
See pdf page 7 at 7 lines from the top of the page of
www.abanet.org/tax/pubpolicy/2009/090609guidancelist.pdf
where they requested that there be a change relating to "Obtaining
a revised determination letter, without the need for filing a new
Form 1023 or 1024, where there is a mere change in the state of
incorporation (Rev. Rul. 67-390, Case 4)." However, we have no
record of the IRS responding to that ABA request.

Therefore, if you do not want to file again with the IRS you would move to another state but maintain you Georgia corporation. You would register your Georgia corporation in the new state as a "foreign" corporation that wishes to "do business" in that new state.

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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