No matter how well-planned or thought out the mission of a nonprofit organization is, a socially-conscious entrepreneur
may be in for a shock if they were under the impression that they were going to be able to operate their corporation without paying taxes. Because the Internal Revenue Service can take its time approving 501(c)(3) paperwork, it can often be a timely endeavor to gain tax-exempt status.
There are some steps that an entrepreneur can take, however, to speed the process along. The nonprofit should first be incorporated as a legal structure prior to submitting its application with the IRS. Although this is not required, the liability protection associated with incorporating a business will put the nonprofit in a better light, Fox News Small Business Center recommends
Often, one of the reasons the IRS is bogged down with applications and takes time approving them is because nonprofits fill out the incorrect forms. This paperwork takes hours to complete, so before embarking on this task, be sure that you actually are completing the proper form.
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