Start a Non Profit in FL

Original source:  http://freedomtaxaccounting.com/how-to-start-a-501c3-in-florida/



If you want to run a nonprofit corporation but do not know how to start a 501c3 in Florida, then we are going to tell you everything about how to start a 501c3 in Florida in this post.

·       What is a 501c3

In order to know how to start a 501c3 in Florida, you must first know what it is. 501c3 is a subsection in under the Internal Revenue Code of the United States and relates to the tax laws of nonprofit corporations. According to 502c3, nonprofit corporations are exempted from paying taxes if the activities they conduct have the following purposes:

• Charity


• Religious


• Public safety


• Education


• Scientific


• Preventing cruelty to animals or children


• Fostering amateur sports competitions

If you want to start a nonprofit corporation that has one of the aforementioned purposes, then you will have to register your corporation under 501c3. Read on to know more about how to start a 501c3 in Florida.

 

Step #1. Establish a Nonprofit Corporation

This a state-level process that establishes a nonprofit, corporate entity by the filing of Articles of Incorporation. The vast majority of nonprofits organize as corporations for a variety of reasons, including liability protection for the officers, directors and other key individuals.

Step 2. Obtain 501(c)(3) Status

This next step is much more complex than incorporating. To obtain 501(c)(3) status, a nonprofit corporation must apply to the Internal Revenue Service for recognition of tax exemption by filing IRS Form 1023. Relatively speaking, forming the corporation is fairly straightforward (assuming that one completely understands the process). Applying for 501(c) (3) status, on the other hand, is quite subjective.

Form 1023 itself is up to 28 pages long. With the required attachments, schedules and other materials that may be necessary, it is not uncommon for these submissions to the IRS to be more than 50 pages. Think of Form 1023 as an IRS examination. Instead of an audit of a tax return, the 501(c)(3) application process is more like an audit of proposed (and/or previous) activity. It is a thorough examination of the organization's governing structure, purpose and planned programs. The IRS is looking to make sure that the organization is formed for exclusively 501(c)(3) purposes and that its programs are designed to fulfill these stated purposes. In addition, the IRS is looking closely for conflicts-of-interest and the potential for benefit to insiders, both possible grounds for denial.

 

Step 3. State Compliance Issues

Thought you were finished with Step 2?  Not quite.

While obtaining 501(c)(3) status grants your new nonprofit federal tax exemption, there are several other, critical issues that must be addressed.

1. Charitable Solicitations Registration – This is a required registration in 40 states and is usually administered through the Attorney General's office, though not always.  Most states require registration prior to soliciting donations.


2. State Corporate Tax Exemption – Most states recognize the federal 501(c)(3) status as valid for state corporate tax exemption.  California is a big exception, requiring its own application and review process for charity status.  Several other states require a separate application, but those are typically simpler registrations.


3. State Sales Tax Exemption – Many states grant an exemption to charities that allows them to purchase items for use by the organization without having to pay sales tax.  Applying for exemption usually requires a nonprofit to have already obtained 501(c)(3) status.


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