IRS Tax-Exempt Rules

IRS reviews and approves state registered Non-Profit Organizations to ensure these mission based organizations can successfully and with ease conduct their work without worrying about paying federal income taxes. An organization that applies for a C3 status and is approved, has certain regulatory rules it must follow to ensure compliance and active status.

Rule #1: Conduct activities that align with your mission and status.

Rule #2: Establish governance procedures and practices.

Rule #3: Keep records to include charitable programs, budgetary results, financial statements, annual tax returns, sources of receipts, grant-making procedures, and racial nondiscrimination requirements (private schools).

Rule #4: File annual federal tax returns, form 990.

Rule #5: Report changes to the IRS, if things change in your organization.