discuss: Should LDP apply for non-profit status (was Re: VolunteerMatch ...)
Subject:
Should LDP apply for non-profit status (was Re: VolunteerMatch ...)
From:
David Lawyer ####@####.####
Date:
17 Apr 2007 06:46:25 -0000
Message-Id: <20070417064633.GA5450@davespc>
On Mon, Apr 16, 2007 at 05:24:45PM -0700, David Lawyer wrote:
Re Volunteer Match
> They use the EIN to check to see if you are actually a non-profit
> under section 501c of the IRS code. LDP isn't, so there is thus no
> point in filling out the application on the Internet for
> VolunteerMatch. Thus there's no point at this time for getting an EIN
> number (unless we want to open an investment account so as to get
> interest on our $). Perhaps we should get 501c status but the IRS
> says that you have to be either a corporation, trust, etc. to do so.
> Perhaps LDP should incorporate.
I'm sure I read the above and thought it was from the IRS. I've just
Googled and found another statement that one needs to be incorporated
to get tax-exempt status from the IRS. But I also checked a detailed
publication by the IRS about getting tax exempt status (501c, etc.).
It seems that you don't really need to be incorporated but you must
have an "organizing document" which might be our Manifesto. IRS says
that by-laws are not an organizing document by themselves (another
document is needed). So it seems that it might be possible to get
tax-exempt status without incorporating.
It costs $300 to apply and if there is something wrong, the IRS gives
you a few weeks to fix it. So if they rejected our Manifesto they
would need to say why and give us a chance to revise it. And I think
they would likely give us a second chance to revise the revision if
that proved necessary. I think that they want the organizing
documents to assure that the assets of LDP will not be used for
non-exempt purposes, including what happens to the assets if LDP were
to fail. In other words, the Manifesto would need to be revised to be
something like the "articles of incorporation" for a non-profit
corporation but the legalese in such articles is at odds with the
informal style of the Manifesto.
So the first step, if we want to try to get tax-exempt status without
formally incorporating, is to revise the Manifesto to be more like a
"constitution". I'm willing to try this and I think that we should
continue with the informal style and revise it to the point where it's
barely acceptable to the IRS.
We are pretty good on other requirements for being a non-profit as I
think that some non-profits have ulterior motives of putting profits
into high pay of key employees so as to appear to be nonprofit, while
they are actually making a profit. We don't have that problem.
David Lawyer
