Operating a non-profit organization or charity involves managing many moving parts and taking on multiple responsibilities you may not have planned for. Rather than becoming a tax expert or hiring in-house counsel to handle your tax law issues, consider working with the Sacramento tax lawyers for non-profits at NewPoint Law Group.
Our knowledge, skill, and experience have given us the skills needed to work with charitable organizations. Additionally, our decades of experience have given us the necessary skills to determine the best solution for each of our clients. If you need advice concerning your non-profit’s tax filing, you should consult with a Roseville, CA tax attorney. Call NewPoint Law Group today at 1-800-358-0305.
What Qualifies as a Non-Profit Organization for Tax Purposes?
“Non-profit” is the designation given to a corporation organized to serve the public, not itself. Entities such as churches and fraternal organizations are examples of non-profits. Non-profits receive special consideration from taxing authorities. However, to be considered a tax-exempt non-profit organization, you must apply for a recognition letter from the Internal Revenue Service (IRS).
Recognition as a non-profit charitable organization can be found under section 501(c)(3) of the Tax Code. This section of the Tax Code is used to allow tax exemption for non-profit organizations. To qualify for an exemption under 501(c)(3), organizations are required to apply for recognition with the IRS at least 27 months from the date of their formation. Once the IRS determines you meet the requirements to be exempted, they will grant you the designation of a non-profit organization or charitable entity.
A knowledgeable, skilled non-profit tax attorney can help you apply for your organization’s tax exemption. At NewPoint Law Group, we dedicate ourselves to providing high-quality tax services to all our clients. Thanks to many years of hands-on experience, we have developed the necessary skills to make sure you comply with both state and federal regulations.
We can help you utilize specific language required to complete your tax exemption recognition successfully. Such language includes statements meeting the IRS’s requirements and statements declaring your organization will not engage in political and legislative activities. Retaining the services of a knowledgeable Roseville tax attorney can help you determine the best course of action to establish your non-profit organization.
Does a Non-Profit Organization Have to File Taxes to the IRS?
According to the IRS, most tax-exempt organizations (except for churches or church-related entities) are required to file what is known as an “annual information notice” with the Internal Revenue Service. Tax-exempt corporations must submit necessary Forms (990, 990-EZ, 990-PF, or 990-N) to the IRS every year. A skilled Sacramento tax lawyer can help you make sure you are required to file your tax returns and produce accurate, timely filings. Remember, noncompliance could lead to unnecessary problems with the IRS.
What Are the Penalties for Not Filing a Non-Profit’s Tax Returns for a Non-Profit?
If a corporation fails to file required IRS Forms for three consecutive years, they will automatically lose their tax-exempt status. As a result of losing tax exemption privileges, a corporation may be required to file federal income taxes. Income tax returns for non-exempted corporations include a U.S. Corporation Income Tax Return (Form 1120) and a U.S. Income Tax Return for Estates and Trusts (Form 1041).
The law strictly prohibits the IRS from reinstating an automatically-removed organization. Once an entity loses their tax-exempt status, they cannot resort to an appeals process. Instead, they need to apply to be reinstated. The IRS provides a few ways in which a corporation may request their tax exemption to be restored, but petitioners are subject to stipulations set forth by the IRS.
Reinstatement will be done retroactively once the petitioner meets the required criteria. Proper filing needs particular attention to detail since it will be the last chance you may have to get your tax exemption privileges back. Consult with a California tax attorney before attempting to file for tax exemption reinstatement.
Tax Attorneys Serving Non-Profit Organizations in Roseville and Sacramento, California
The Tax Code is a complex and ever-changing set of rules governing the way individuals and institutions should file their income tax returns. While some requirements might be simple and require little time to complete, others can be incredibly complex. This is especially true for institutions and organizations who must abide by both state and federal law.
NewPoint Law Group can help you navigate the complex world of the Tax Code and help to limit your tax liability. We offer nothing but professional and high-quality services with incredible attention to detail. We’ll make sure provide a professional and straightforward answer to your questions. To schedule a confidential consultation with our legal team, call 1-800-358-0305 today or contact us online. We are conveniently located in the Sacramento area of Folsom and Roseville.