Hey folks, David McCree, CPA here. The nonprofit tax guy. Listen, I just got a quick update for you. It is January 2018, happy new year and all that. The IRS has just released a new revision of Form 1023, the application for tax-exempt status. The last revision was in 2013, and the one before that was in 2006. When you prepare the form, you want to make sure you use the most recent revisions and, of course, the most recent instructions as well. When you download the new form, make sure you download the new instructions. So, what has changed? Well, the biggest thing for me is that they've dropped all that language about the advance ruling period. That has been inapplicable since 2008, so it's taken them that long to update the form for the advance ruling period. Now, what is the advanced ruling period? Well, it used to be before 2008 when you filed Form 1023 to apply for recognition of your tax-exempt status. When the IRS approved it, they would not give you a final determination letter or a final ruling. Instead, they would send you an advance ruling letter, which was kind of a provisional letter saying, "Okay, we're gonna treat you like you're tax-exempt and donors can deduct their contributions." But after five years, you had to send them a form with all your revenues showing that you did, in fact, meet the public support test. Only then would they issue a final determination letter. Now, they've done away with that. When you file Form 1023, you simply demonstrate on the form that you're most likely to meet the public support test for your first five years. Then, they will issue a final determination letter. And in the sixth year, you show on your return that you did,...
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1023 financial data sample Form: What You Should Know
It is not required to include the number of years of projected activity if the activities are related only in that they share a common theme, if you are not required to estimate the time and cost and if you can show that the number of projected years reflects your historical experience with the activity. Step 2 — Identify Your Projected Financial Information. The total projected annual revenues and expenses, which total 9,600.00 annually.  It is necessary to include the amount of assets and liabilities that are financed.  It also is necessary to include all current liabilities. Furthermore, it is necessary to determine the amount of projected income. Furthermore, it is necessary to determine the amount of projected expenditures for capital investment. Furthermore, it is necessary to determine the amount of income that will be distributed to beneficiaries annually.  You are required to estimate or certify the income, expense, net worth, and assets for the year in order to complete the form. You can complete this entire section from scratch, or you can use a pre-populated template or make a copy of one in Step 2.  Use it if you don't have a computer or if the completed tax returns from several years are required. You would include all of your operating expenses if you intend to have an office set up.  You would be required to include all property and equipment that your organization will use. Use a template or make a copy to complete the projected annual expenses and estimated revenues section. Form 1023 Annual Report and Financial Statement Worksheet (PDF) (Optional) IRS Form 1023 Part VI (6) — Financial Data & Budget Projection IF Form 1023: Required Financial Information — IRS How to Prepare a Federal Income Tax Return for Non-Profits. For a newly formed 501(c)(3) non-profit organization, you will be able to use Form 1023-Q to prepare the required federal income tax return. Form 1023-Q.pdf (Optional) IRS Form 1023 — Part V (a) (PDF) (The Form 1023 is a Federal Form. The return and its attachments are not considered business income or the proceeds to the charity of gifts made out of the charity funds. If these are the proceeds, you can't use Form 1023 on a federal income tax return at all.) IRS Form 1023-EZ–PAIRS Part VI — Form 1023 Part V (a) — Gross income 12,450.
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