According to the Internal Revenue Service of the United States federal government, non-profit status is a special form of tax exemption given to certain types of organizations that do not attempt to make money for shareholders or owners, but instead uses any money raised to further a charitable cause. Several different types of organizations qualify for non-profit status in the United States, including churches and private charities. The procedure for qualifying for non-profit status is handled by the section 501(c)(3) of the IRS code.
Instructions
Paperwork
1. Fill out Form 1023--Application for Recognition of Exemption Under Section 501(c)(3)). Churches and public charities that make less than $5,000 do not need to fill out this form when applying for non-profit status.
2. Fill out Form 1024, Application for Exemption Under Section 501(a).
3. Pay the user fee, as established in Part XI of Form 1023.
4. Include necessary documents. In addition to the forms, the application packet for non-profit status must include your employer identification number, and a full description of proposed activities and bylaws for the organization.
5. Turn in the application to the address listed on Form 1024. The IRS only accepts physical requests for non-profit status; electronic versions will not be considered.
Qualifying
6. Do not file as an individual. The IRS does not recognize individuals as non-profit entities.
7. Incorporate. To qualify for non-profit status, the IRS requires incorporation of an organization. Incorporation protects individual members of a company from liability.
8. Write a mission statement. An important aspect of qualifying for non-profit status includes a declaration of how you intend to spend the money you make. Some non-profits claim very specific goals in their mission statements, while others broaden the mission, using the money for a wide variety of causes.
9. Forgo profits. To qualify as a non-profit organization, no individual within the organization can profit. You must invest any money raised above operating costs back into the organization to further your mission statement.
