Non Profit Formation

Whether your need is to form a Public Charity or a Private Foundation, at IBC Law Firm, we understand the critical importance of securing tax-exempt status for charitable organizations. Our dedicated team specializes in guiding nonprofits and foundations through the complex process of obtaining IRS recognition, ensuring a smooth and thorough application experience.

We help communicate to our clients the specific requirements for their organization to qualify for tax-exempt status from federal income tax, and allows the organization to receive tax-deductible donations under Section 501(c)(3) of the Internal Revenue Code.

We also provide comprehensive support for obtaining this Tax Exempt Status under IRS Section 501(c)(3), using IRS Form 1023 (for more complex organizations) or 1023EZ (for smaller nonprofits meeting specific criteria) and we clarify the ongoing requirements to maintain tax-exempt status with the Federal government.

Under IRS tax law, Section 501(c)(3) Organizations that qualify for public charity status include publicly supported charities that receive most of their funding or donations from public sources. These can include churches or religious organizations, schools or educational organizations, scientific, hospitals, medical research organizations, testing for public safety, National or International Amateur Sports Competition, Prevention of Cruelty to Children, or Prevention of Cruelty to Animals, just to name a few.

Organizations such as Homeowner’s Associations, Civic leagues, and groups endorsing a political candidate are common types of nonprofits that do not qualify for 501(c)(3) status.

Our Comprehensive Tax-Exempt Application Services Include:

Detailed Bylaw Review

• Comprehensive analysis of your organization’s founding documents
• Professional guidance to ensure bylaws meet IRS requirements
• Recommendations for strengthening organizational governance

Strategic Nonprofit Counsel

• Expert consultation on nonprofit formation and compliance
• Personalized advice tailored to your organization’s unique mission
• Guidance on maintaining tax-exempt status after initial approval

Application Preparation and Submission

• Meticulous completion of IRS Form 1023 or 1023EZ
• Identification of NTEE Code appropriate for your organization
• Careful documentation of your organization’s purpose and activities
• Strategic presentation of your nonprofit’s goals and operational structure
• Counsel on state tax-exempt application and requirements

IRS Communication Management

• We submit a Power of Attorney request to manage all IRS correspondence and follow-up inquiries on your behalf
• Prompt and professional responses to any application questions
• Proactive communication to address potential concerns

Financial and Activities Documentation Review and Support

• Assistance in developing comprehensive estimated financial projections
• Collaborative approach to articulating your organization’s planned activities
• Guidance in crafting compelling narrative descriptions for the IRS application
• Help translating your Purpose, Mission, and Values into clear, detailed program activities descriptions
• Strategic framing of your nonprofit’s intended impact and operational plans

Application Options

We submit on your behalf:

• Full IRS Form 1023 (for more complex organizations)
• Streamlined 1023EZ (for smaller nonprofits meeting specific criteria)

Success in receiving tax-exempt status requires attention to detail, understanding of the law, and knowledge of what the IRS examiner will be reviewing and looking for in your application. Our staff has decades of experience with Non-profits and can help communicate your organization’s Purpose, Mission and Values and Financials in the 1023 application for limited or no back-and-forth with the IRS Examiner before your organization’s tax-exempt status is granted.

Under IRS Tax Code, a Section 501(c)(3) organization is presumed to be a private foundation unless it qualifies as a public charity. Private Foundations are also tax-exempt organizations. They are established for charity or humanitarian purposes, but do not rely on public funding. Rather, Private Foundations may receive funding from private sources such as individuals, families, trusts, or corporations. Private Foundations also have specific requirements to establish and maintain tax-exempt status with the IRS. Unlike a Public Charity classification, Private Foundations do not have the requirement to prove that most of their funding comes from public support, and is not required to pick a diversified Board of Directors.

Private foundations may designate their funds to be specific to a geographic area, area of study, particular issue, support students or specific people group. Private Foundations may include:

• Community or Local Foundations
• Corporate or Business Philanthropy
• Private Foundations
• Public Grant-making Charities
• Grants given to Public Charities
• Grants given to Individuals
• Scholarships to Individuals

Detailed Review & Counsel of the following:

• Organizational and Operational documents review
• Bylaws drafting or review
• Federal and State Tax Exemption documents and applications
• Review laws and definitions around IRC § 4941 – Acts of self-dealing
• Review laws around IRC § 4942 – Minimum payout requirements
• Review laws and definitions around IRC § 4943 – Excess Business Holdings
• Review laws and definitions around IRC § 4944 – Jeopardy Investment
• Review laws and definitions of IRC § 4945 – Taxable Expenditures
• Ongoing reporting and public accountability obligations
• Public disclosure requirements

Success in receiving tax-exempt status for a private foundation requires attention to detail, understanding of the law, and knowledge of what the IRS examiner will be reviewing and looking for in your application. Our staff has experience forming Private Foundations and can help identify everything required for the tax examiner to approve and grant your Private Foundation tax-exempt status.

The ongoing requirements and reporting to maintain federal tax-exempt status for a Private Foundation are different than a Charity. We will help communicate these laws and guidelines to you to maintain your tax-exempt status.

Get Started Today

Transform your charitable vision into a recognized nonprofit organization. Contact IBC Law Firm to begin your Private Foundation tax-exempt status application.