YOU CAN DO IT YOURSELF!
The first thing our company advises you is that you can complete the 501c3 application yourself. You don’t have to have a lawyer, CPA, accountant or even our company to complete the application for you. Plenty of individuals successfully complete the application themselves. It takes a lot of time and thought, but you can do it.
OR… you can hire us to complete the application for you. We charge $1200 to complete the long form for the average company (about two thirds less than most companies). More detail below.
As a client, we will send you our multi-point TIP sheet on all the beginning steps you need to take as you plan to incorporate your company. That includes important information on incorporating, securing the URL (web address) for your business, your EIN number, forming your board, starting a website, etc.
The IRS will typically require you to incorporate your business with the appropriate governmental agency in your state. In California, that is the Secretary of State. But a 501c3 nonprofit also has filing requirements with the Attorney General, which we will review with you to make sure you stay in compliance.
We won’t stop just at the application process. Once you attain your 501c3 status, there are things you must do – mandatory filings – to make sure you stay in compliance with both state and federal regulations. We will advise you on those requirements as well.
THE COST AND THE PROCESS
The 1023 application is long and complicated. If you are meticulous and fill in everything correctly and attach the required documentation, you may be approved within four to five months of applying. If approved, your tax-exempt status will be retroactive to your date of incorporation. If there are fixable problems, the IRS will respond with questions about additional information they require. Alternatively, your application could be denied. Do not believe any company or professional that tells you they can “guarantee” that your application will be approved. Only the IRS has the power to approve your application.
The fees that you pay to the IRS and to our company are separate and each are nonrefundable.
IRS 501c3 application filing fees (paid to IRS):
Form 1023-EZ – The short form IRS filing fee for nonprofits with a projected gross receipt revenue of less than $50,000 a year is $275 (as of March, 2018).
LONG FORM IRS Form 1023 – The more traditional and detailed form is almost 30 pages and the one that organizations expecting to earn over $50,000 a year must file with the IRS to obtain their tax exempt status. Many of the schedules will not apply to you. The IRS Form 1023 User Fee, which is now $600 as of March, 2018, regardless of your organization’s projected future income. This application fee is made payable by check to the United States Treasury and sent in as part of your 501c3 application packet.
It can take up to four months, on average, to receive your 501c3 determination letter, unless you pay for expedited service. The IRS User Fee payment is non-refundable.
OUR APPLICATION PREPARATION SERVICES:
Our Services involve advice on incorporating, securing the URL for your business, starting a webpage, and applying for your Employee Identification Number. We complete the IRS Form 1023 (the actual application), any required schedules, the critical NARRATIVE portion of your application that answers many of the questions on the form, and prepare your corporate Bylaws. These completed documents, and the IRS check sheet, are returned to the client for submission to the IRS.
SEVERAL WEBSITES WILL ADVISE YOU THAT CPAs, consultants and attorneys who specialize in helping nonprofit organizations with the 501c3 application charge, on average, $2,500–$5,000 for preparation of IRS Form 1023 applications for small organizations, and $6,000-$15,000 for more complex ventures.
Fortuna Business Collective, LLC charges $500 for the short form and $1,200 for the long form. This includes one free 30-minute consultation. Standard consulting fees apply after that. We review those fees with you in more detail when we discuss your needs and the level of services you require.
We hope you will choose us.