How do we get 501(c)(3) status with the IRS?

We would like to register our national (registered) not-for-profit in the USA and get 501(c)(3) status with the IRS. Is there anyone who is able to advise on next steps or even act as consultant to get the job done? It seems to be a critical step for our South African company, in order to receive donations with tax benefits for USA citizens. We are also interested in associated fees.

How do we get 501(c)(3) status with the IRS?
Contributions by U.S. Citizens to foreign organizations are generally not deductible, although there are a few exceptions by treaty. You will likely need to form a U.S. entity first, and then apply for IRC Section 501(c)(3) status.





In order to obtain 501(c)(3) status, you must file IRS Form 1023 with the Internal Revenue Service. It is a substantial form that will require you to describe your programs and plans; explain how they fit within Section 501(c) (3)'s requirements and also disclose your organization's leaders, structure, background, and track record, if there is one. The questions call for detail, and will require a lot of work.





An attorney is not required, but strongly recommended.





At the present time, if everything is in order on the Form 1023, the minimum processing time for the IRS to make a determination is approximately 6 weeks. This 6 week timeframe will work, subject to a few limited exceptions, ONLY when the entire appication (Form 1023) looks "right" on a first pass review by the IRS. If the IRS exempt organizations section determines, after a first look at the application, that further information or investigation is necessary, prior to making its determination, it will be approximately 9 months before you will receive a ruling. It is therefore beneficial to get it right the first time.





If a Form 1023 is filed within 27 months of organization of an entity, and it is approved, the approval will date back to the date of formation.





There is a "user fee" for the evaluation of Form 1023 which will vary depending on the applicant's revenue.





Attorneys' fee will vary widely, depending on what firm does the work, but might be expected to be in the range of $5,000 to $25,000. At a reputable and experienced firm, expect a retainer of at $7,500 - $10,000, with full fees variable, based upon the amount of work required.. This estimate assumes that a U.S. entity (usually, but not necessarily a corporation) will need to be formed.





The fees will vary depending upon a number of factors, including the degree of organization of the charity, and whether follow-up advocacy of the application is necessary. U.S. attorneys will usually do this sort of work on an hourly basis, with hourly rates for an experienced tax lawyer running from $275 - $750 per hour. In the Los Angeles area, expect $350 - $500 per hour.





The IRS is giving special scrutiny right now to charities in general, and overseas charities in particular.
Reply:Great job!!!! Report It

Reply:There is a series of forms that have to be filled out and can be obtained via the IRS. You have to be able to account for funds raised and disbursed. The None Profit has to have a specific purpose and means to achieve that purpose. Outside of that it is just the formality of filling out the forms and filing them. Getting a business plan to assist with this process is probably a good idea as it would have this basic information.

garden sheds