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Nonprofit Law/Establishing 501(c)

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Question
I am the Presdient of a Band booster organization and am seeking information on how to apply and become a 501(c). I have looked up on the IRS website and am
A little confused on what forms to fill out, the education exemption or charitable? We reside in the state of Texas.

Answer
You would complete the IRS Form 1023-EZ Eligibility Worksheet which starts on page 11 of https://www.irs.gov/pub/irs-pdf/i1023ez.pdf and, as you see at the top:
--- Start of excerpt ---
If you answer “Yes” to any of the worksheet questions, you are not eligible to apply for exemption under section 501(c)(3). You must apply on Form 1023. If you answer “No” to all of the worksheet questions, you may apply using Form 1023-EZ. For the flow chart see
https://www.irs.gov/uac/About-Form-1023EZ

You wrote that you were confused whether to choose "the education exemption or charitable" If you are referring to the IRS Form 1023-EZ you could put that the organization is primarily supporting education and, therefore, use Code B12 for "Fund Raising and/or Fund Distribution" as shown under the heading "Education" on page 18 at that https://www.irs.gov/pub/irs-pdf/i1023ez.pdf  - but, if you are inquiring about something elese, let me know and I will reply further.

Before you apply for IRS exemption 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. The IRS highly prefers that you would have at least 3 directors, with control of the board not in persons related by blood, marriage or other business. See IRS Publication 557 "Tax Exempt Status for Your Organization" starting on page 71 for samples. http://www.irs.gov/pub/irs-pdf/p557.pdf

I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Your state would also have certain requirements, and, for nonprofit corporations, those would be found on the State site. Texas Corporations Division Forms are at:
www.sos.state.tx.us/corp/forms_boc.shtml
You may inquire for more information to the Texas Corporations
Division at (512) 475-2755 or e-mail to
SOSDirect@sos.state.tx.us

Texas "Nonprofit Legal Toolkit" is 90 page pdf article
http://goo.gl/9EHXcG
  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

My summary of IRS regulations relating to 501(c)(3) booster organizations is at http://goo.gl/IdQwML and you may be interested to read that.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.  

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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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