Statute of Limitations on Applications for Section 501(c)(3)
No statute of limitations exists for applying for a 501(c)(3) tax exemption from the IRS. When you file, however, will determine the date from which your tax exemption will apply.
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What is a 501(c)(3) Tax Exemption?
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The 501(c)(3) tax status designates an organization as tax-exempt and is conferred by the Internal Revenue Service, the United States' tax collection agency. 501(c)(3) organizations are "charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals." This designation exempts organizations from federal income tax and allows them to receive tax deductible contributions.
Eligibility for 501(c)(3) Status
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New and existing business entities may apply for a 501(c)(3) tax exemption. An organization must meet specific requirements relative to stating its business purpose, using assets should the corporate be dissolved, compensating officers of the corporation, participating in political campaigns and other potential business activities that may further the purpose of the organization in order to be eligible for 501(c)(3) status.
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Filing for a 501(c)(3) Tax Exemption
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You are expected to file for the 501(c)(3) within 27 months after organization. If you do, then should your organization be granted exempt status, the status will apply from the date of your business incorporation or organization. If you apply more than 27 months from the end of the month in which your business was organized, your exemption will apply only as far back as your filing date. In your application, you will be required to complete Schedule E of Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Public charitable organizations with less than $5,000 in annual gross revenue are not required to file.
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