Can LLC use 8832 to back date C-Corp?

[AZ-Tax]

This relates to my previous thread on Nov 7, 2011 " Merging LLC to C-Corp to become 501(c) 4". I was on the phone with the IRS business dept and since the LLC was formed in Sept of 2011 and a initial tax return (P'Ship) was not filed yet, the IRS suggested to look into the LLC to file a 8832 under "late election relief" in effect making the effective date of the LLC, the C-Corp effect date. As per my previous thread, the LLC was under the understanding that they were a 501(c)4 and thus nearly $200K of donations were donated to the LLC for which most all lhas been spent and none of the 2 members received any compensation of any type. Question: its my understanding that one of the qualifications when applying for 501(c)4 status, the entity must be a C Corp. Assuming this LLC qualifys for the late election fiilng, does this satisify the C Corp for I am assuming the real reason to be a C Corp is for liability.

[Koss]

Should work...

When the IRS makes a determination that an organization is tax-exempt, the exempt status is usually effective as of the date of the organization was formed.

You need to get the entity classified as a corporation first. If that classification is backdated to the date of formation, then the exempt status should get bootstrapped in with the same effective date.

The question that arises is this:

Once you file Form 8832 to elect C-corp classification, do you wait until the IRS responds, and then apply for tax-exempt status?

Or do you file the application for exemption while Form 8832 is pending?

I know what I would do, just to show good faith.

File Form 8832. Then file the application for exemption the next day, or the next week, or whenever they get everything together. (The application for exemption is a pretty complicated affair.) Don't wait for the IRS to respond to Form 8832.

Within the application for exemption, clearly disclose that the entity is an LLC under state law, that it has filed Form 8832 to elect C-corp status with late election relief, and that the IRS has not yet responded to the Form 8832.

BMK

[AZ-Tax]

What would you charge?

File Form 8832. Then file the application for exemption the next day, or the next week, or whenever they get everything together. (The application for exemption is a pretty complicated affair.) Don't wait for the IRS to respond to Form 8832.

Within the application for exemption, clearly disclose that the entity is an LLC under state law, that it has filed Form 8832 to elect C-corp status with late election relief, and that the IRS has not yet responded to the Form 8832. BMK

Koss and/or anyone, what would you charge to prepare and file the 8832 PLUS prepare and file the form 990 for a Section 501(c)(4) social welfare organizations, with donations of over $200K since inception of Sept 2011?

[Gary2]

Question: its my understanding that one of the qualifications when applying for 501(c)4 status, the entity must be a C Corp. Assuming this LLC qualifys for the late election fiilng, does this satisify the C Corp for I am assuming the real reason to be a C Corp is for liability.

Filing the 8832 doesn't change the LLC into a C Corp. It just changes the tax rules of the LLC so that it is taxed like a C Corp. It's not at all clear that that's what you need.

I believe I said in the previous thread that there's no requirement that non-profits be corporations. The 1024 has a check box for either corporation, trust, or association. In addition, see http://www.irs.gov/charities/article...156356,00.html.

It also says on that page that partnerships generally don't qualify, but it's not clear whether that's referring to an entity type or a tax treatment. An LLC isn't a partnership, it's just often gets taxed like one.

The bottom line is that you really need to figure out what's behind the statement that this group needs to be a corporation.

[Koss]

Fees

Filing the 8832 is fairly simple; I'm not sure I would charge a separate fee for that.

Form 990... is a lot of work. I haven't done one in a while. But the real work is in the application for exemption, which is Form 1024.

I wouldn't touch a Form 1024 for under $500.

Gary may have a point about the entity type. I gotta think about that a bit more. I'll try to follow up by tomorrow.

BMK

[AZ-Tax]

Status changed, is now an official AZ NonProfit C-Corp

Filing the 8832 is fairly simple; I'm not sure I would charge a separate fee for that.

Form 990... is a lot of work. I haven't done one in a while. But the real work is in the application for exemption, which is Form 1024.

I wouldn't touch a Form 1024 for under $500.

Gary may have a point about the entity type. I gotta think about that a bit more. I'll try to follow up by tomorrow.BMK

I went to the AZ Corp Commission (ACC) website last week and looked up this LLC. What I saw was completed and approved "articles of Inc." as an AZ non profit Corp. I called the Attny and asked him, are you sure this an LLC for it looks like a Corp to me and he once again said the ACC sees it as an LLC. Now, today the Attny calls me and now the ACC sees it as a Corp. Am I correct by thinking form 8832 will not be needed now and file form 1024 to apply for 501(c)4 status?

Upon looking at form 1024, looks like all 501's need to complete the Part III financial data and hopefully they kept books. Since corp started Sept 2011, the form is asking for next 2 yrs (after current yr) budgets. TTB pg 22-7 has a little about form 1024. With that said, any additional help would be appreciated. Koss & Gary, I appreciate your past help.