The IRS charges a filing fee which is dependent upon the actual or projected budget of the organization. For organizations whose actual/projected 3 year budget is less than $40,000 in gross receipts for all three years, their filing fee will be $300.00. For organizations whose actual/projected 3 year budget is more than $40,000 in gross receipts in any of the three years, their filing fee will be $750.00.  Please do not misunderstand the filing fee, as that is a fee that the IRS charges (which for reference you can view here) and does not come to One Stop Biz Help.  This fee is accompanied by the 501c3 application that has been signed by the organization directly to the IRS.

Gross receipts are all monies received by the organization regardless of whether it was in the form of fundraising, donations of money, donations of materials, grants, etc. before any expenses are deducted.

Yes, all donations will be 100% deductible for the donor after you have received your status from the IRS.

Not generally. There are some states that will automatically consider you exempt from state tax with the determination from the IRS, however there are states that require you to file an application for exemption from state tax and they may require that you wait until you have the determination back from the IRS before pursuing state tax exemption.

Yes and no. Yes, you will be able to accept donations and hold fundraisers, however, you need to make sure the donors are aware that you are awaiting your determination from the IRS. No, you will not be able to solicit for grants until you have received your determination. Most grants are dependent upon the 501c3 determination so it is best to wait until you have the determination back before pursuing grants.

The term "tax-exempt," when used in reference to nonprofit organizations, generally refers to the net profits (proceed above and beyond expenses) of an organization being exempt from federal and/or state income tax.  While a nonprofit organization can be established by incorporating, the entity is not automatically tax-exempt upon creation with the state.  Tax-exemption can usually be achieved only through applying for and receiving 501(c)(3) approval from the Internal Revenue Service (IRS).

Yes, the one most familiar (an addressed in subsequent questions below) is the Internal Revenue Code (IRC) Section 501(c)(3) public charity or private foundation status, which is established for purposes that are religious, educational, charitable, scientific, literary, testing for public safety, foster of national or international amateur sports, or prevention of cruelty to children or animals.   There are also IRC Section 501(c)(4) through 501(c)(27) organizations that are considered tax-exempt, but not charitable.  You may view the full reference chart by clicking here.

• Directors have 100% control of the corporation.  It is very important that you have trustworthy directors.  The IRS requires a minimum of three.  You can have as many as ten.  We recommend an odd number to avoid a deadlock in voting.  If you want more than ten directors, you can amend your Bylaws once you have obtained tax-exempt status.  When selecting the Board of Directors or the Officers/Trustees of the organization, keep in mind that the IRS limits the operation of the board by related individuals to less than 50%.  So if you have 3 board members, and 2 of the members are related by family (husband/wife, parent/child, etc.) then you will need to add 3 more board members that are not related to insure that not more than 50% of the board is related by family. 

• The directors vote for the officers (President, Vice President, Secretary, and Treasurer) and can normally change them at any time (absent a contract to the contrary).  Here's a brief story to keep in mind when selecting the Directors:  A man (we'll call him John) operated a nonprofit organization for 20 years.  John, his wife Sally, and a third director Harry, comprised the board of directors.  When Sally divorced John, she joined up with Harry and they removed John from his organization.  After 20 years of sweat and toil in his nonprofit, John was out in the street.  Choose your directors wisely.

No, they can live anywhere in the U.S. or reside abroad.  They can be U.S. citizens or foreign nationals.  Normally, the treasurer must be a U.S. Citizen or a legal U.S. resident, and the accounting records for the organization must be kept in the U.S.  If the organization has no U.S. presence, it may still obtain tax-exempt status (e.g. to get grants) but donations to it would not normally be tax deductible. 

Different states call the basic organizational document by different names:  Articles of Incorporation, Certificate of Incorporation, Articles of Organization, Articles of Agreement, Articles of Association, or Charter.  For simplicity purposes we call them Articles or Articles of Incorporation.  This is sometimes called the charter or constitution of the organization.  There is not a definite difference among the different names, just a preference by the state as to the name of the "organizing" documentation.

Yes, you can call the IRS directly at the Exempt Organization department to check the status of your application.  You will need to have your EIN (employer identification number) ready so the IRS agent can verify your information and give you a status report about your organization.  The IRS Exempt Organization number is (877) 829-5500.  However, if your application has already been assigned to an agent, you will need to speak with that agent directly to find out the status of your application. 

You may also check the timeline on what applications the IRS is processing based upon the month you mailed your application to the IRS by visiting: http://www.irs.gov/charities/article/0,,id=156733,00.html