The Complete Start-Up Package
It can be intimidating and time consuming to draft the legal documents necessary to incorporate and file for recognition of tax-exemption. For organizations that don’t have the time to do-it-themselves Pfau Englund Nonprofit Law, P.C. provides a complete, start-up package for $2,750. This fee includes:
In addition, the IRS commonly will ask a series of additional questions when reviewing an exemption application. The package includes answering any questions forthcoming from the IRS through an initial determination regarding exempt status by the IRS. And, if for any reason the IRS does not grant recognition of tax-exemption the $2,750 retainer fee is fully refundable.
- drafting articles of incorporation
- drafting bylaws
- drafting and filing the appropriate IRS exemption application
(either Form 1023 or 1024) and the related IRS documents
(forms SS-4 and 2848)Frequently Asked Questions:
How long does it usually take to get recognition of tax-exemption?
The entire process generally takes about 3 - 6 months from start to finish. A lot of it depends on how fast the client gets information to us, and on how long a particular state takes to file the articles of incorporation. Most of the applications we file with the IRS are reviewed in about 3 - 4 months. It’s important to keep in mind, however, that the official date of the tax-exemption from the IRS will date back to the original date of incorporation if the tax-exemption application is filed within 27 months of the end of the month of the date of incorporation.Are there any additional costs other than the $2,750?
Clients are also responsible for the fee to file the articles of incorporation in their state, typically $25-100, and for the IRS filing fee. The IRS filing fee is currently $750 if your organization expects to receive gross receipts (income) of $10,000 or more per year. If your annual gross income is less than $10,000 the IRS filing fee is $300. Rarely will we charge for other expenses such as if you request or require overnight mail delivery of any of the documents or if any computer research is necessary. Our firm does not routinely charge for copies, phone calls or other routine administrative expenses. These are all included in the flat rate for the start-up package.How do we get started?
First you should contact our firm either by phone (703.304.1204) or by email (spfau@nonprofitlaw.com). Sandy will discuss your organization with you and determine if she thinks it qualifies for exemption. Then you will need to sign a retainer letter that you understand the firm’s fees and the work we will complete for you and provide the retainer fee. In addition, to get started we will need the following basic information about your organization:
- Name and address for the organization
- Basic mission statement and list of primary activities you plan to engage in
- List of names and addresses of the initial board of directors (we recommend at least 3-5 board members to start)
- Estimated budgets for the first three years of the organizations existence, including basic sources of income (i.e., individuals, corporate grants, private foundation grants, membership dues) and major categories of expense (i.e., program expenses, salaries, rent/utilities, legal, accounting).
We recommend setting up a simple spreadsheet as follows:
Year 1 Year 2 Year 3 Income Individual
Donations$ $ $ Corporate grants $ $ $ Total Income $ $ $ Expenses Program expenses $ $ $ Salaries & benefits $ $ $ Rent/utilities $ $ $ Legal $ $ $ Accounting $ $ $ Total Expenses $ $ $ Net surplus (deficit) $ $ $ What happens after you get all the necessary information?
We'll draft articles of incorporation and bylaws and complete the required IRS forms. We'll send everything to you for your review and signature, and then the documents will be filed.How often does the IRS deny tax-exemption?
For applications we've filed...rarely, if ever. We simply don't take on cases that we don't think will qualify for tax-exempt status.