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Application preparation important when pursuing tax-exempt status

One tax benefit an organization might pursue is being granted 501(c)(3) tax-exempt status. Examples of groups that may qualify for this status include: charities, religious groups, scientific groups and education groups.

Whether a group holds this status can impact it deeply. So, among the things that can be frustrating and problematic for leaders of an organization that is seeking this status are delays in the processing and consideration of their application.

So, avoiding preventable delays in the application process can be important for such leaders. The IRS’ website contains a list of tips for trying to steer clear of such delays. The common thread in these recommendations is the importance of making sure to include everything you are supposed to in the application.

Among the things these tips note it is important to not miss in an application for tax-exempt status are:

  • Including the proper user fee.
  • Filling out the forms thoroughly. This includes making sure to fill out all the pages of the forms and include all required supporting schedules.
  • Including all relevant documents related to the group’s organization, structure and rules.
  • Including all needed financial data.
  • Including the information needed to show how the group will accomplish a qualifying exempt purpose.

Leaving out key information in an application could cause the tax-exempt application process to be more complicated, delay-ridden and time-consuming than it has to be. This underscores how important solid application preparation can be for groups that are pursuing tax-exempt status. Skilled tax lawyers understand the key role such preparation can play in efforts to avoid delays and protect one’s goals during the tax-exempt status application process and can assist leaders of organizations pursuing this process with such preparations.

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