Does the IRS Charge A Fee for Applying for An Irs Determination Letter?

Yes. The IRS user fee Form 8718 and the appropriate
fee must be included with your organization?s
Form 1023 or Form 1024 application. The fee ranges
between $150 and $500. (Consult the IRS for details
on the current fee schedule.)

Is My Organization Required To Obtain A Federal Tax-Exempt Status?

To find out whether your organization is required to
obtain Federal (IRS) tax-exempt status, study IRS
Publication 557 or talk with an IRS representative.

A qualifying organization may find it wants the IRS
determination letter of Section 501(c)(3) status, even
when it is not required by the IRS. The IRS instructions
for applying for Section 501(c)(3) status state:
?Section 501(c)(3) status provides certain incidental
benefits such as:

ï Public recognition of tax-exempt status.
ï Advance assurance to donors of deductibility of contributions.
ï Exemption from certain state taxes.
ï Exemption from certain Federal excise taxes.
ï Nonprofit mailing privileges, etc.

Also, your organization may want the IRS Section
501(c)(3) exemption letter to use to apply for exemption
from State sales and use tax.

Tax Exempt Organization

Tax Exempt Organization: A tax exempt organization is a non-profit organization
that is exemp from certain taxes because it is described under Section 501 of the
Internal Revenue Code. Certain organizations are required to apply to the Internal
Revenue Service for a determination letter that grants them formal tax exemption,
while other organizations are treated as tax exempt as long as they are organized
and operated under an applicable section of the Code.
IRC Section 501(c)(3) Organization: This is an organization that is organized and
operated exclusively for one or more of the following purposes: charitable, religious,
educational, scientific, literary, testing for public safety, fostering national or
international amateur sports competition (but only if none of its activities involve
providing athletic facilities or equipment), or the prevention of cruelty to animals.
To qualify, the organization must be a corporation, community chest, fund, unincorporated
association, or foundation. A trust is a fund or foundation and will qualify.
However, an individual or a partnership will not qualify.
Organizations not required to apply for formal tax exempt status: Some organizations
are treated as tax exempt under IRC Section 501(c)(3) without being required
to file Form 1023, provided they are organized and operated appropriately. These
include:

ï Churches, interchurch organizations of local units of a church, conventions or
associations of churches, or integrated auxiliaries of a church, such as a menís or
womenís organization, religious school, mission society, or youth group.

ï Any organization (other than a private foundation) normally having annual grossreceipts
of not more than $5,000.
Contributions to domestic 501(c)(3) organizations, except organizations testing for
public safety, are generally deductible as charitable contributions on the donorís
federal income tax return.