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Business Solutions Blog - Kerkian Consulting

Here you'll find useful information to assist you in setting up your web business, getting your non-profit going, establishing workflows for customers, automating business tasks with you website and much more.

Creating a Non-Profit

Jeffrey VanOuwerkerk - Monday, May 17, 2010
In this article:
We will be discussing the formation of a non-profit entity, specifically a 501c3.
Legal Disclaimer:
This article is for general purposes only and may be used as a high level guide to other resources on the web. No information contained may be construed as legal advice or guidance. Your state or local authorities may have additional information. As always, when filing legal or tax documents you should have them reviewed by counsel or a tax professional.

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There are several sources on the web to help you get started. In the past all forms had to be submitted via the mail or private delivery service.  The IRS is rolling out a new "Cyber Assistant" that will guide you through the process of online submission.

The fee's associated with filing for a 501c3 can be over $850.  When you use the Cyber Assistant you will enjoy a dramatic reduction in the fees.  According to form 1023 issued Jan. 3 2010, the fee using the Cyber Assistant will be $200.  

Testing of Cyber Assistant identified some functionality requiring correction prior to launching the program publicly.  In light of  that, the IRS has made the necessary choice to delay the release of Cyber Assistant beyond this calendar year.  They will continue to receive and process all applications using their existing processes .

You can sign-up for the Exempt Organization (EO) update newsletter to automatically receive the alert that Cyber Assistant is available by clicking here.

Current fees for Exempt organizations are:

Issue/Type of Request  Office of Jurisdiction  User Fee

Exemption application (Form 1023, 1024, or 1028)

EO Determinations
  • Organizations with annual gross receipts < $10,000 during preceding 4 years

$400
  • Organizations with annual gross receipts ≥ $10,000 during preceding 4 years

$850
  • Group exemption requests

$3,000
Accounting method changes  EO Technical  $275
Accounting period changes    $350
Qualified subsidiaries of section 501(c)(25) organizations
 $2,250
Letter rulings
 $10,000

If your organization is just starting out you can still file for a 501c3.  To do so you make good faith estimates on what you expect your gross receipts to be. Don't under-estimate here to save costs up front, doing so will result in additional costs for your organization.

If you have already downloaded the form and want to fill it out and mail it in you can do so by printing it out or using Adobe Reader. As a PDF this document is a kind of "form" in Adobe.  This way you can type in your responses right on the form and then print it out.

If this sounds like a task you would rather pay someone else to assist you with, then your not alone.  There are several companies that provide services to walk you through the process of setting up you Non-Profit organization.  Some of those companies are Legal Zoom and Lolo.  

I've used Legal Zoom's services in the past and have been pleased.  Lolo is also a well respected provider and deservers a close look.

I hope this information got you started on the right foot.
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