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Nonprofit Formation:
What is the nonprofit organization 501(c)(3) tax
exempt process?
Step1: Determine if you are ready to become a 501(c)(3)
nonprofit organization
Step 2: Incorporate your nonprofit organization in the
State of Colorado
- Develop
Articles of Incorporation
for your organization
- Register your nonprofit in the State of Colorado at the
Secretary of State website and attach your Articles of Incorporation
document saved in a pdf format. The cost to
incorporate online is $25. (Additional amendments to
the document also cost $25 a piece.)
NOTE: It is important that Articles of Incorporation
be attached when you incorporate by checking “Yes” to the
question “Do you wish to attach other statutorily required
or optional information?” While not required for the State
of Colorado, they are required at the Federal level to file
for tax-exempt status.
- Obtain a copy of your Certificate of Good Standing from
the Secretary of State website.
Step 3: Apply for your Organization’s Employer Identification
Number (EIN) with the Internal Revenue Service
- You can obtain EIN online at the
IRS website for
free after completing a series of prompted questions.
NOTE: You may chose to view your EIN number immediately (recommended)
or have it sent to your mailing address in 10-12 business
days. If you chose to view the EIN number immediately, make
sure you print several copies before clicking out of the
screen. You will not have the opportunity to view this document
again.
Step 4: Obtain and complete IRS Form 1023 (Application for Recognition
of Exemption under Section 501(c)(3) of the Internal Revenue
Code), Articles of Incorporation, Bylaws and necessary attachments
with the Internal Revenue Service.
NOTE: We recommend trying to complete as much of the
application as possible before reading the instructions
and then using them as a reference for parts that are confusing.
1023 Application Form
While you can download the form in pdf format, you cannot
submit the form (or attachments) to the IRS online. Therefore,
we recommend saving the writable pdf to your desktop and
working on it from there. You will need
Adobe Acrobat
in order to download the forms:
Step 5: File the Form 1023 (Application for Recognition
of Exemption under Section 501(c)(3) of the Internal Revenue
Code), Articles of Incorporation, Bylaws and necessary attachments
with the Internal Revenue Service.
- The application fee is either $350 or $750 depending
on your estimated annual organizational budget size.
- Upon receipt of the application, the IRS will mail you
a letter outlining their process. After 30 to 40 days, you
will receive a letter from the IRS asking for additional
information or giving your application final approval. It
is rare to get final approval in this 30 to 40 day period.
- If additional information is requested, respond as soon
as possible. You are generally given 20 days to respond.
If you do not respond within 20 days, your application can
be denied. If you are not able to obtain answers to the
questions within the 20-day period, call the IRS at the
number given on the letter to work out arrangements. If
any of the questions are unclear, you can also call this
number for clarification from the IRS officer assigned to
process your application.
- Once the additional information is provided and the IRS
is satisfied, you will receive a letter of designation granting
your organization its 501(c)(3) status within 2-8 months.
655 Broadway, Suite 300, Denver, CO 80203-3426
303.623.1540
800.516.6284
f: 303.623.1567
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