Starting non-profit business and taxes

As far as the IRS is concerned, they're primarily concerned that the organization is only performing functions within its exempt purpose.

Your state's Secretary of State may have something to do about the other issues like whether the Managing Director is paid too much.

___ Stu

"Chip Wood" wrote

File to incorporate the company under the non-profit (not-for-profit) laws of your state, then submit the application to be treated as a non-profit entity by the IRS. Both tasks are probably not suitable for a DIY person, nor is it going to be cheap. Hire a good attorney with non-profit experience, they should be able to be a one stop provider and incorporate and apply for non-profit.

They can also guide you to and through the laws that apply in your state as well as at the federal level.

Why hire an attorney? Would an EA or tax preparer be sufficient?

Not for forming the corporation. An EA might be able to prepare the non-profit application for the IRS; most uncredentialled tax preparers would not.

Ira Smilovitz Leonia, NJ

First, a good book to start out with is, "How to Form a Nonprofit Corporation" by attorney Anthony Mancuso (published by Nolo Press). Here's a link to information about the book:

(NOTE: I have no connection with Nolo Press, the book, its author, etc. These are just low-cost resources that I have used in the past).

And, finally, do a Google search for "fiscal sponsorship". That will show you links to information on how you could possibly start out by operating under the auspices of an existing tax exempt nonprofit corporation (called "fiscal sponsorship"). Usually, you can structure the arrangement in a way that would allow you to later spin off your own separate tax exempt nonprofit corporation.