Form 1023 Paperwork, In Millions of Hours, 1986 to 2016
Source: U.S. Office of Management and Budget. Click image to learn more.
Real Help With Your 501(c)(3) Application
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A. Federal tax law allows public charity 501(c)(3) organizations to make payments to insiders as long as the amounts are reasonable and the goods and/or services are actually rendered. The IRS may impose fines not only on insiders who receive unreasonably high payments, but also on board members who approve such transactions. In extreme cases the organization can lose its exempt status.
If you check this box yes, you are responsible for learning the IRS "excess benefit" rules and understanding how they affect your organization. (Note that rules for private foundations, not covered here, are different.)
Q. Are 501(c)(3) organizations permitted to
engage in financial transactions with officers,
directors or trustees, or with entities related to them?