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    Non Profit Return for filing

    A corporation was established in Maine in December of 2009 with the purpose of being a non-profit. We're still in the stages of waiting for IRS approval on the non-profit application. Do we file an information return for 2009 and if so, what form? Or do we wait for IRS approval, then file a 990 for 2009?

    #2
    Non Profit Return for filing

    Wait for IRS approval, then file 990.

    But - if the organization first formed in December 2009 - you're NOT REQUIRED to adopt a calendar year (unless Maine requires it)- it could be any end of month so long as it doesn't exceed 12 months.
    Uncle Sam, CPA, EA. ARA, NTPI Fellow

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      #3
      Disagree

      if you are operating and you can prior to approval your years (end) accounting and tax reporting can/will be required including a return. The forms you file depended on size and type of charity. IRS usual notifies you of that. Filing is a requirement that often comes before the final approval. You still have to work for the final approval or status will obviously be revoked..

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        #4
        Disagree

        You're not supposed to file a 990 PRIOR to being given the IRS approval.
        At that point the organization is NOT offficially a tax exempt organization - and IF anything - a 1120 would be the proper filing.
        But rather than file an 1120, then have to communicate with IRS to change that to a 990 and run the risk of gumming up the system - wait until 990 approval, THEN file 990.
        Any penalties can be abated if notices come, by sending a copy of the application (showing the date) and the date IRS approved it.
        Uncle Sam, CPA, EA. ARA, NTPI Fellow

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          #5
          In the stages

          is the original question. After the first filing the IRS notice back is not that you have been accepted, but your under review go operate. The organization can be operating and usually does. The IRS notifies it has the right to change anything it wants. I have seen 990s filing for three years before final acceptence is recieved. The initial application is always reponded to that I have see with not an acceptence, but notice they are preceding on the basis of what has been filed and the organization proceeds. I have never seen an application turned down, but I have seen were the IRS has requested additional information. I was at a meeting on Monday where the not for profit's final acceptence took 3 years - the attorney was proud of that fact as he said the average time period was close to 5. Remember that was an attorney that was trying to give himself a pat on the his back.

          I do have to admit I did a bunch of this stuff in the 80s and early 90s - now I avoided it unless I am forced too.

          Comment


            #6
            Non-Profit Filing

            I have been involved in recent years with 1023 applications.

            So far, I haven't had one client's request for abatement of penalties for non-filing/late filing due to the application holdup process denied.

            In fact, I have been advised that while an organization's application is in process - it's advisable not to file any return - because it would only complicate matters further - after the app has been accepted and the 990 should have been filed.

            But the OP stated that the organization was formed in Dec. 2009. That doesn't automatically necessitate a calendar year filing. IRS would not be looking for a filed return (regardless of which form) yet. The ending year date entered on an SS-4 is not binding.
            Uncle Sam, CPA, EA. ARA, NTPI Fellow

            Comment


              #7
              I agree with

              you on the year end. I used to always see the first correspondence after the app to direct you to file as _____ they tell you and go on to discuss the approval process. I have not filed one late I have filed one before the final acceptence.

              Again the last new one I did was probably 1992... Things do change.

              Comment


                #8
                Attorney Averaging

                Originally posted by JON View Post
                I was at a meeting on Monday where the not for profit's final acceptence took 3 years - the attorney was proud of that fact as he said the average time period was close to 5.

                Uh, I think this average must be based on intra-office data. LOL.
                If you loan someone $20 and never see them again, it was probably worth it.

                Comment


                  #9
                  My Take on the 990

                  ...for what it's worth.

                  I would file a 990 subject to your choice of a fiscal year. I believe the 1023 is a vehicle whereby IRS officially recognizes that an entity is a non-profit, and thus also establishes the deductibility of donations.

                  Until a 1023 is accepted, the entity is not recognized as a non-profit, but it is not recognized as a for-profit either. Sam, we should not automatically assume an entity is for profit just because IRS hasn't ruled on a 1023,

                  I have an entity choosing NOT to pay the large user fee for the 1023. We sent one in without the fee and they sent it back asking for money. I have told the members that the entity is not officially recognized as a non-profit, but I am continuing to file the 990 until such time as IRS determines that we are not.

                  There is a whole 'nother discussion about concepts of profit, and terminology of "surplus" and "deficit" instead of "profit" and "loss."

                  Comment


                    #10
                    Thanks a bunch everyone for your input, it was much appreciated!!!

                    Comment


                      #11
                      Originally posted by Edsel View Post
                      ...for what it's worth.

                      I would file a 990 subject to your choice of a fiscal year. I believe the 1023 is a vehicle whereby IRS officially recognizes that an entity is a non-profit, and thus also establishes the deductibility of donations.

                      Until a 1023 is accepted, the entity is not recognized as a non-profit, but it is not recognized as a for-profit either. Sam, we should not automatically assume an entity is for profit just because IRS hasn't ruled on a 1023,

                      I have an entity choosing NOT to pay the large user fee for the 1023. We sent one in without the fee and they sent it back asking for money. I have told the members that the entity is not officially recognized as a non-profit, but I am continuing to file the 990 until such time as IRS determines that we are not.

                      There is a whole 'nother discussion about concepts of profit, and terminology of "surplus" and "deficit" instead of "profit" and "loss."
                      I hope you also told them that contributions to them are not deductible. Pub 557 Chapter 3

                      Comment


                        #12
                        Originally posted by Uncle Sam View Post
                        I have been involved in recent years with 1023 applications.

                        So far, I haven't had one client's request for abatement of penalties for non-filing/late filing due to the application holdup process denied.

                        In fact, I have been advised that while an organization's application is in process - it's advisable not to file any return - because it would only complicate matters further - after the app has been accepted and the 990 should have been filed.
                        See page three of the 1023 instructions. The procedure is to mark "Application Pending" on any returns due prior to the determination letter being received.

                        Comment

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