501(c)(3) Tax-Exempt Nonprofit Resources http://www.incfile.com/nonprofit/nonprofit-resources.htm Federal law provides tax benefits to nonprofit organizations recognized as exempt from federal income tax under Section 501(c)(3) of the IRC. The 501(c)(3) application with the IRS is a significant step in incorporating your nonprofit. Forming a nonprofit corporation does not automatically mean that the nonprofit corporation is tax-exempt for federal and, in some instances, state income tax. A "tax-exempt" organization is a distinctive entity that has gained an exemption from income tax liability from the IRS. A nonprofit corporation is not eligible for exemption from income tax liability until it applies for and has been approved by the IRS for 501(c)(3) tax-exempt status. The benefits of being classified as 501(c)(3) tax-exempt by the IRS include: exemption from federal income tax and, in some instances, state income tax; eligibility to receive tax-deductible charitable contributions; eligibility for property tax exemptions; the ability to apply for grants and other public allocations; discounts on USPS bulk-mail rates; and reduced rates for radio and public service announcements. To be eligible for 501(c)(3) status, an organization must limit its purpose to an exempt purpose as described in section 501(c)(3) of the of the IRC and engage in activities that further its exempt purpose. The most common types of 501(c)(3) organization are: Charitable Charitable organizations include: organizations that conduct activities that promote the advancement of religion; education or science; the maintenance of public buildings; monuments or works; lessening the burdens of government; lessening neighborhood tensions; the elimination of prejudice and discrimination; and the defense of human and civil rights. Educational Education organizations include primary or secondary schools, colleges, trade schools, organizations that conduct public discussion groups, correspondence educational programs, museums, zoos, day-care centers, and youth sport organizations. Religious Religious organizations include churches, mosques, synagogues, temples, nondenominational ministries, mission organizations, and faith-based social agencies. Organizations that want to be recognized as exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code need to incorporate in their state, obtain an Employer Identification Number, file IRS Form 1023, The Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, all applicable Schedules and supporting documents, and IRS Form 8821, Declaration of Representative. Resources The following resources and links are helpful guides and links to the IRS website to help guide you through the maze of nonprofit corporations and tax-exempt corporations. Nonprofit Links Tax Information for Charities & Other Nonprofits http://www.irs.gov/charities/index.html Forms and Publications for Nonprofits http://www.irs.gov/formspubs/index.html 501(c)(3) Links: IRS Information about Tax-Exempt Organizations http://www.irs.gov/charities/content/0,,id=96986,00.html Tax Information for Charities & Other Nonprofits http://www.irs.gov/charities/index.html IRS Publication 557 - Tax Exempt Status for Your Organization http://www.irs.gov/pub/irs-pdf/p557.pdf IRS Publication 4220 - Applying for 501(c)(3) Tax Exempt Status http://www.irs.gov/pub/irs-pdf/p4220.pdf IRS Topic Index for Charities & Nonprofits http://www.irs.gov/charities/topic/index.html Forms and Publications for Nonprofits http://www.irs.gov/formspubs/index.html IRS Publication 526 - Charitable Contributions http://www.irs.gov/pub/irs-pdf/p526.pdf