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I am in a University Choir and we are non-profit organization hoping to become tax exempt. Is this possible and how?

Bowling Green, OH |

We are going on tour to Toronto, Ontario and our budget is low in terms of paying for a hotel and bus.

Attorney Answers 4


  1. The best place to start is www.irs.gov about not for profits. Then one forms a corporation in your state, file for federal exemption and any required state exemption after getting a tax ID.

    Good advice: find some alumni who became attorneys and have them contribute the legal work. Even alumni CPAs can be very helpful. Make sure they comply will all potential university regulations for fundraising, and the university usually has an office which addresses this issue, legal department or otherwise.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.


  2. You already say that you are a "non-profit," I assume that that means a corporation or LLC, presumably in Ohio. The next step is your qualification with the IRS. I have attached the link to the IRS Frequently Asked Questions page which will help you through the selection process of how the law relates to your specific type of association.

    You probably don't need a lawyer to help you with this. If I chose anyone, I would probably choose an accountant, AFTER TAX DAY.


  3. It may be possible but it is extremely difficult to file for a 501(c)(3) status. There is a lot of paperwork that must be done and accountings that are required. Many clients have decided that it is not worth it to seek tax exempt status because of the added attorney and accounting costs. If you are going to try and do a non-profit you should hire an attorney who has experience in these things. Good luck.

    Attorney Chris Beck
    Beck Law Office, L.L.C.
    Beavercreek, Ohio
    (937)510-6110 phone
    attycbeck@gmail.com
    www.becklawofficellc.com

    The responses of Attorney Chris Beck to any questions posed on Avvo do NOT establish an Attorney-client relationship. Attorney Beck is available for private hire and consultation for a fee. Only after Attorney Beck is retained as counsel, or agrees to discuss this matter with you privately, shall he be legally deemed to be your Attorney. His responses herein are an attempt to assist persons temporarily based upon the very extremely limited amount of information provided by the questioner


  4. First, of course, don't engage in transactions based on what you read on a free website. Get expert advice from someone who has reviewed your specific situation in detail. Having said that, it is not quite as difficult to obtain an exemption from US federal income tax as some people believe, although the requirements for obtaining and maintaining an exemption have been tightened in recent years. However, unless it is a for-profit university, your academic institution almost certainly already has tax-exempt status under IRC Section 501(c)(3). If it is willing to handle an account for you, you can ride the coattails of its exemption. If your choir is like most, the university would have no trouble justifying its involvement with the choir, because its activities would in all likelihood be deemed to be in furtherance of the university's educational mission.

    In the event you can't take advantage of the university's exemption, your group could apply to the IRS for an exemption. It is worth considering what kind of exemption you want to obtain, because there are several potentially available exemptions. The most well known is the exemption for a charity under Internal Revenue Code Section 501(c)(3). The advantages of a 501(c)(3) exemption are significant. You don't have to pay federal income tax on the revenues of the organization that are substantially related to its exempt purpose, and those who make charitable contributions to the organization may, subject to statutory and regulatory restrictions, deduct those contributions on their US federal income tax. If your attorney searches for "choir" in the IRS's online Publication 78 (http://apps.irs.gov/app/eos/), he or she will find several hundred choir organizations that have obtained 501(c)(3) exemptions. One current example is the Bach Cantata Choir of Portland, OR (http://www.bachcantatachoir.org). Whether your organization would meet the requirements for a 501(c)(3) exemption depends on the specific facts of the choir, including its operations, sources of income, expenses, etc.

    If you do obtain a 501(c)(3) exemption (or any other exemption, you should be aware that there are ongoing compliance requirements, including the requirement to file an annual information return with the IRS. If the organization’s annual gross receipts are normally $50,000 or less, it files the annual information return electronically, via a fairly simple procedure involving an “e-Postcard.” If you fail to comply with these requirements, your organization may lose its exemption. In fact, an organization that fails to file required annual information return for three consecutive years will automatically lose its tax-exempt status.

    Finally, there are many other things to consider when establishing a tax-exempt organization. There isn't space to discuss them all here, and how those considerations apply to your organization will depend on its own particular facts. I recommend that, in addition to consulting an attorney, you review the IRS's Publication 557, http://www.irs.gov/pub/irs-pdf/p557.pdf, which provides a wealth of information about applying for exemption under IRC Section 501(c)(3) as well as the other exemption provisions of Section 501 of the Internal Revenue Code.

    The above is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.

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