Private foundations and public charities involve separate forms and filing methods. Many organizations find themselves using an outside accountant or someone within the organization who is an accountant to help them determine what type of organization to file as. Tax professionals can give informed advice and opinion on what to file as, and how to file properly.
Filings should be reported as soon as possible, and must be filed within 90 days of any year the organization has more than 5,000 dollars in budgeted revenues. If an organization does not meet this 5,000 dollar target, the business has 15 months from the date of incorporation in its state to file Form 1023 and the requisite fee. Applications that do not have an attached fee will not be processed. Additionally, depending upon the state, there is usually a possible 12-month extension that an NPO can request. Oftentimes, even if the filings are reported late, organizations can file for retroactive exemptions. As soon as the necessary forms are filed, a prospective nonprofit is considered tax-exempt.
