Reviews by Tax Professionals
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
Reviews of Prepare Your Own 501(c)(3) Application by tax professionals:
For many of the smaller organizations that apply for 501(c)(3) status each year, it should not be necessary to use an attorney. Yet, the prospect of preparing one's own application can be daunting. The IRS Form 1023 and accompanying instructions are filled with technical terms. How does one even begin to determine whether an organization qualifies under 501(c)(3)? What does the IRS want to know in the narrative? What should you expect once the application is filed? When should you seek professional advice? Common application errors can delay the granting of exemption, or even result in denial.
Sandy Deja's 2010 book, "Prepare Your Own 501(c)(3) Application," is aptly subtitled "How to Make the IRS Love Your Form 1023." Ms Deja not only guides us through the application process, using plain language, but she also shares insights about what the IRS really wants, based on her many years of experience working with and within the IRS. For example, Section I, Chapter 2, "Financial Information," begins by explaining how the IRS will use the required financial information. Similarly, in Section II ("Filling Out Your Own Application"), Chapter 8, Ms Deja explains what the IRS is looking for in the narrative of activities. She provides a list of questions that might be going through an IRS agent's mind, then provides an excerpt from an IRS training text to show what IRS reviewers are looking for.
Finally, Ms Deja provides an overview of what to expect once an application is submitted. She tells us which types of organizations are likely to be approved quickly, and which, based on IRS criteria, will be given greater scrutiny.
This excellent book (which is an updated and revised version of Sandy Deja's previous book) is well worth the investment for any organization considering whether to prepare its own 501(c)(3) application.
For years I have recommended Prepare Your Own 501(c)(3) Application to clients or would be clients who have more time to spend on a self-prepared exemption application than money to pay a lawyer. For those that lack funds to hire a professional to prepare their application, I often recommend they use this book to prepare their own application and hire me just to review it. Sure, paying me to do it for you is easier and provides the peace of mind to know it is done correctly, but I am the first to admit that most exemption applications are not rocket science. If you are willing to invest the time and energy in researching the requirements for tax exemption and understanding the application process, then this book is a great place to start.
Sandy Deja draws on her decades of experience with the exemption application process both inside and outside of the IRS to illuminate the complexities of 501(c)(3) qualification. The book is sold in electronic form and is aptly sub-titled “How to Make the IRS Love Your Form 1023.” In plain and simple language, Prepare Your Own 501(c)(3) Application gives the reader a lesson in 501(c)(3) fundamentals. Sandy walks her readers through the exemption application process, addressing specific questions on the Form 1023, offering visual aids, form resolutions and policies, as well as practice pointers and tips along the way. Even experienced 1023 preparers will learn some new tricks from Sandy.
Most importantly, Sandy acknowledges that some applications really do require the assistance of a trained professional. Her section titled “When to Call a Professional” helps readers weigh the risks of going it alone. I highly recommend that anyone considering preparing their own application for exemption purchase a copy of Prepare Your Own 501(c)(3) Application.
I form a lot of Arizona nonprofit corporations. Some are tax exempt charities and some are not. A nonprofit corporation formed under Arizona law does not automatically qualify as a charity that is exempt from federal income tax. Nonprofit corporations that want to be tax exempt organizations must file an IRS form 1023 and receive approval from the IRS.
For those who want to prepare the form 1023 themselves rather than hire a professional, I recommend an excellent how-to book called “Prepare Your Own 501(c)(3) Application” by former IRS agent Sandy Deja.
Sandy’s resume is impressive:
She has worked with form 1023 almost daily since 1974
She reviewed about three thousand exemption applications during her 12 years as an IRS Exempt Organizations Specialist
She has prepared over one thousand forms 1023, and reviewed almost that many prepared by others since leaving the IRS
Sandy Deja's ebook is a thorough guide to practically everything one must know about creating a non-profit organization and obtaining tax-exempt status from the Internal Revenue Service. Her ebook will allow you to easily sift through the multitude of issues that an applicant must consider. Being able to anticipate the government's questions greatly simplifies this process, and her ebook provides a long list of items that will help your application to get approved by the IRS more quickly and easily.