Applying for 501(c)(3) tax exemption status is, first and foremost, a timely endeavor. Anyone planning on doing it should expect it to take up the better part of their day. In fact, the IRS advises organizations to set aside ten hours out of their schedule to complete the necessary paperwork required to file for it.
If a nonprofit organization is established as a public charity with a 501(c)(3) purpose and its gross receipts are, on average, less than $5,000 per year, then it is unnecessary for that nonprofit to file for a federal tax exemption. According to the IRS, a nonprofit typically doesn't have more than $5,000 annually in gross receipts if it had under $7,500 in gross receipts during its initial tax year, had $12,000 or less in gross receipts in its first two tax years or had $15,000 or less in its first three tax years.
However, if a nonprofit organization does make more than $5,000, it is required to file Form 1023 within 90 days of the end of the year.
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