Becoming a 501(c)(3) organization

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Hello-

I am trying to set up our organization as a 501(c)(3) organization. I could use any advice as possible as I am working on a limited budget.

Some of the things I could use help on are Articles of Incorporation, or if you have any other documents that you would provide for me to refer to. I am a volunteer, and I know this is important to the players on our teams.

Thanks.

 

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Hello

I am going through the same thing (501 c3). The best way I have found is to contact an Attorney and a CPA they will give you all the help you will need to get started. In my case I just (pay the money) and hope for the best.



Vipers

 

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You will need to contact an attorney 1st so they can set up the corporation. Then you will need to contact a CPA who will file the paperwork for you to be treated as a nonprofit organization (501(c)(3)) along with the SS-4 to obtain the federal ID#. The form to file out for the nonprofit organization is a fairly lengthy form but it really is needed so you can collect donations for the organization without having to pay taxes on the income. The tax return that is filed annually is required depending on the total annual income which I believe is over $25,000 but check with a CPA. The best idea is to contact a CPA & Attorney.

 

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My wife made the last post under my profile to try and help. She is a CPA so it's a pretty legitimate idea of what needs to happen.

 

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Another idea that may be more cost effective is to contact the SBDC through the state of Ohio. They have counselors that can assist you, and they offer plenty of online forms for your reference. It is always a good idea to retain legal council and a CPA too.

Good Luck!

 

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OK, I found some good information on the Secretary of State of Ohio site. It doesn't sound that bad. I have also found a sample of Articles of Incorporation that I can make changes to fit our organization.

According to the Ohio site, all I need to do is pick a name and file the forms along with Articles of Incorporation and $125. I am pretty sure you have to be set up at the State level first. Am I missing anything?

I also don't understand the part about setting up a corporation. What is the attorney going to do? I am lost on that one. I know I can contact the IRS and get an EIN. What am I missing here?

I have already filled out form 990 (I believe that is the form) for another organization.

I am looking for answers to what I might be missing in this. I guess the most difficult thing is to figure out what gets done first--looks like I need to start at the State level?

This is my guess:

1. Choose a name, create Articles of Incorporation, and file with the State of Ohio

2. Obtain a Federal EIN (is a State one needed also--I know how to do that as well).

3. File the paperwork (along with many required supporting documents listed in the checklist at the end of the document) with the IRS.

Am I missing anything?

Thanks.

 

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My wife said that it looks like you have everything. Get the Articles of Incorporation first, then file out the SS-4 online w/ the IRS to get the Federal ID #, then any additional forms w/ the IRS for the nonprofit status.

Here's a few additional items she mentioned:
The nonprofit organization has to be in some type of entity recognized by the IRS. The corporation is just the entity type that you will be functioning under. The entity is formed at the state level so fill out the paperwork w/ the Secretary of State. You can do this yourself. The Secretary of State will also issue you a state ID# which will be all that you will need unless you have payroll or start selling items that you will have to collect sales tax on.

The most difficult & time consuming part will be the Form 1023 to fill out w/ the IRS to obtain the certification letter recognizing you as a 501(c)(3) organization. This is a 28 page form - tons of fun to fill out!! Although this isn't a required form if your income is less than $5,000 per calendar year, it's still a good idea to go ahead & do it at the start.

Being a CPA, I'm suppose to say that you should always seek professional advise, but you can do it yourself.

 

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How long does this process take from start to finish? If it gets started now do you think everything would be finished to work some fund raisers during hockey season where you have to be a 501(c) (3) to even get started? ?:

 

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The IRS cashed our check nine months ago and we still haven't finalized it. It took 8 1/2 months for it to even get on someones desk to be worked. They claim they are back logged because of hurricane katrina.

The good news is they said we can do whatever fundraising we want because it will be retroactive. However, that does not help when you need to show the letter of declaration and have not received it yet.

Be Patient!!!

 

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You can do it yourself, if you have unlimited time, want to send responses back to the IRS for every question they come up with, and they come up with some real dosies. With an attorney and a CPA it took us over a year. Had to go in to answer questions many times. If you give the wrong answer you will be shot down. Don't put your organization in jeopardy of not being able to get the certification. If you provide wrong answers you can't go back and change them. I tried it on my own and thought I was going to go crazy. worked on it eight months, finally said I can't go on. Had a attorney and cpa get involved. Still took over a year.

 

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You can do it yourself, if you have unlimited time, want to send responses back to the IRS for every question they come up with, and they come up with some real dosies. With an attorney and a CPA it took us over a year. Had to go in to answer questions many times. If you give the wrong answer you will be shot down. Don't put your organization in jeopardy of not being able to get the certification. If you provide wrong answers you can't go back and change them. I tried it on my own and thought I was going to go crazy. worked on it eight months, finally said I can't go on. Had a attorney and cpa get involved. Still took over a year.

 

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There is more to incorporating than just the articles of incorporation. The organization will need a code of regulations (by-laws) and minutes reflecting the organization of the non-profit. This is where the attorney will help. The IRS will want to see these documents as part of the 501(c)(3) application. An attorney in your area with an interest in sports may volunteer some time for a sports organization (I have)

 

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I have been looking into this for almost a year myself thinking about whether it is worth the effort. I did download the application, IIRC it was approximately 37 pages, with a 40+ page instruction booklet. This is indeed all stuff you can do yourself, but like many have said, biting the bullet for the attorny to file the Corp docs ($150?), assembling the charter/corp by laws/operating agreement etc is probably another $150 (mostly from templates on file, and utilizing a CPA to make sure it is done right (for the specific purpose) is probably important also.

My attorney and CPA BOTH suggested that I approach a "friendly" similar organization and either ask if we can be a "sub" organization of that one (with separate books for individual books & tax filings), or at the least gawk at their application, articles, etc., to get it right with minimal headaches, anxiety, etc.

Once the rascal is set up it should not be that hard to operate,

1. have occasional documentable meetings with minutes for record
2. keep books for which annual tax filings can be generated and from which audits can be easily conducted
3. DON'T co-mingle corp funds with personal funds (big no-no for integrity of the corp)

It looks and seems daunting to do this, but it does not seem like much more than running a small company once it is accomplished, and there is plenty of inexpensive software for doing that (Quicken, QuickBooks). I have heard it can take 7-12 months but once you file the corp papers, you can do business under the plan without a proble while waiting for approval (assuming approval comes).

Hope I have made this sound "easy". If I could make it sound a little "easier" I would do it myself, LOL. Sounds like the best bet for us "average Joe's" is to find someone with one already set up and, 1. hitch a ride, or, 2. at LEAST "cheat off their test" and use all of their successful info.

 

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using a lawyer and a cpa will help keep you off nerve pills during the process

 

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OK, it would be nice to be able to copy off of other documents, but, realistically, I don't see an organization offering that type of help.

So, does anyone have recommendations for a lawyer in Central Ohio that can do this?

 

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I am a CPA and have successfully obtained a 501(c)(3) for two softball organizations. The whole process took ~6 months (depending on the time of year the application was filed). Happy to help. Contact me at mmeyer10@cinci.rr.com.