501 C

[tiggger1]

Does anyone know anything about filing for 501 (C)(3) in Massachusetts?

I am the president of a regional horse breed club. There is talk about filing for nonprofit. A few years ago ( when I wasn't president) and there was talk about filing and there was reason that we didn't. ( I cant remember why).

I have looked on on the website and I cant find any reason why we cant be but I have no idea what to do next?

Like I said we are a small regional club of about 100 or so. The only income the club has is from membership fees, fees from our annual show and by selling t shirts with our logo. All money we receive is used toward promotion of the club....We barely break even. We are looking to get some sponsors but need the nonprofit status

 

[mickeyboat]

I think it's called a 501(C)(3) and it is a federal designation. The IRS form you need to complete is called a 1023. It is quite cumbersome and there are some "red flag" questions that if you answer them wrong, your application will be denied.

I would recommend getting the help of an accounting firm that specializes in these kinds of applications. Maybe someone in your organization would be willing to take it on pro bono.

Denae

 

[Jingle]

Section 501(c)(3) of the Internal Revenue Code is the classification of non-profit organizations operated exclusively for religious, charitable, educational or scientific purposes. That is not the entire language of 501(c)(3). To apply for this status you would use Federal form 1023, and it is a long, cumbersome process. This classification is wanted by organizations because donations to 501(c)(3) organizations are deductible for income tax purposes. There are also a few other benefits.

Many other types of nonprofit organizations, such as recreationsl clubs, fraternal organizations, civic organizations and others are classified under different 501(c) sections. To apply for this classification you would use a Federal form 1024, which is much easier to complete than the form 1023.

Both forms are available on the IRS website. www.irs.gov.

 

[tiggger1]

so can you be non profit and be tax exempt? i mean not filing the 501 (c)(3)?

 

[Jingle]

You can be a nonprofit organization and exempt from income tax even if you are classified under a different 501(c) section than the 501(c)(3)'s. One of the big differences between the 501(c)(3) classification and the other 501(c) classifications is that donations to the organization are not deductible for income tax purposes by the doners. Also, at least in our state, 501(c)(3) organizations can make purchases exempt from sales and use tax. Other non-profit organizations, can not.

There are many organizations, such as Lions Clubs, American Legions, VFW's, recreational organizations, Knights of Columbus, Rotary clubs and many more that are non-profit and exempt from income tax, but not classified under the 501(c)(3) section.

All non-profit organizations, no matter how they are classified, should be aware that they may be required to register and collect sales tax on sales they make (fundraisers and such).

 

[ZephyrHawk]

so can you be non profit and be tax exempt? i mean not filing the 501 (c)(3)?

If you fall into your state's qualifications for non-profit (sorry, not an MA expert) then yes. They are separate designations (although there is some overlap of concept). However, 501(c)(3) is how you gain federal recognition of tax exempt status and would allow any donators to your cause to make their donations tax free. Being labeled as non-profit by your state could possibly allow your organization to avoid state taxes....but nothing else.

I agree with others here, you should probably talk to an accountant or a lawyer.

 

[Jingle]

I would recommend looking at the Federal form 1024. In my opinion, you do not need a lawyer or accountant to complete this form.

You should also, if you have not done so, register as a non-profit organization or corporation with your state. This is usually done by the same state department where businesses file their articles of incorporation. For non-profit organizations, this registration process is not that difficult.

 

[tiggger1]

I believe we are already incorporated as a non profit...I think the confusion is that we are non profit but not 501 (c) (3) so we cant get grants...

 

[Jingle]

What is the purpose or stated objective of your organization?