Acquisition of IRS Section 501(c)(3) & FTB Tax-Exempt Status
San Marcos Lawyer for Acquisition of IRC Section 501(c)(3) and FTB Tax Exempt Status
Also Helping Nonprofits and Businesses in Oceanside, Vista, Escondido and Carlsbad
Whether you’re running a corporation, charitable foundation, or scientific organization, you seek effective, legal mechanisms to achieve tax-exempt status. The Law Office of Darius Khayat can help with both the acquisition of IRC Section 501(c)(3) and Franchise Tax Board (FTB) tax-exempt status.
IRC Section 501(c)(3) Overview
To qualify for tax exemption under IRC Section 501(a), your organization must pass multiple tests. These include:
Your governing documents must comply with certain requirements stipulated in IRC Section 501(c)(3). These will limit the purpose of your organization and ensure that its assets are dedicated to purposes that the IRC would understand to be exempt. For instance, your corporation or foundation must be operated exclusively for the purpose of public safety, charity, education, or religious purposes.
Not every part of your organization’s activities must be dedicated to IRC Section 501(c)(3) purposes. According to the code, the organization can dedicate an "insubstantial part" of its monies and resources on non-exempt activities.
No Private Inurement
In general, your organization cannot deploy its assets or properties to help a person or a private group, such as the director of a foundation, an officer of a religious institution, etc. Basically, you are not allowed to pay unreasonable compensation to someone inside your organization, or you risk losing your exempt status.
Your organization is prohibited from trying to influence lawmakers (lobbying). The prohibition is not comprehensive: your group can do some lobbying; in addition, you may create educational materials, for instance, without violating this test.
Your organization cannot directly or indirectly engage in electioneering.
FTB Tax Exempt Status
In California, you can apply for tax exempt status using FTB forms. In addition to paying $25 to the Franchise Tax Board, your entity must fill out a number of documents, including the FTP 3500 exemption application, and you must provide copies of your creating documents, bylaws, budget or proposed budget, and other data and information stipulated by the forms.
Help Simplifying a Challenging Process
Darius and his team can help you and your organization streamline the process of achieving the tax-exempt status you need to do your business and good works.
The Law Office of Darius Khayat serves San Marcos as well as surrounding communities, including Carlsbad, Vista, Escondido, and Oceanside. Call us now: 760-591-0245.