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IRS Filing for Nonprofits

Once the organization is formed, the organization is considered nonprofit by the State of Ohio but is not yet considered "tax exempt" by the Internal Revenue Service (IRS). The organization must file a Form 1023 with the IRS to establish that it is organized and operated for "exempt" purposes.

Why 501(c)(3) Status Is Important
There are several advantages to being designated a 501(c)(3) tax exempt organization. The corporation generally will not have to pay taxes on the money it raises. It will be able to attract tax-deductible contributions from donors. Moreover, most government and foundation grants will be made only to groups who are 501(c)(3) organizations.

IRS Form 1023
To obtain the Form 1023, visit the IRS website at www.irs.gov/charities/. The form is very long and detailed. The following describes some important sections of the form. The IRS website contains helpful information regarding how to obtain exempt status. For additional information, you should also refer to IRS Publication 557 [Download PDF from irs.gov], "Tax-Exempt Status for Your Organization" (found on the IRS web site) and IRS Tax-Exempt Organizations Tax Kit published by the American Bar Association (www.abanet.org/tax/pubs/tetk).

Activities and Operational Information
Give a detailed narrative description of the group's past, present and proposed activities, the purposes for which the group was formed, and specific benefits, services or products the organization will provide - This ¾ page narrative is your chance to demonstrate that the group is organized and operated for exempt purposes. These exempt purposes include religious, charitable, scientific, literary or educational purposes. Provide details and descriptions of the organization's activities and community outreach programs.

Comprehensive Budget
Sources of financial support in order of size - government grants, corporate and private donations, ticket sales, membership, workshops, classes, investment income and others.

Describe proposed, fundraising program (Income) - Include information about government grant programs and foundations, identify corporate funders, describe plans for individual donors, fundraising events and others.

(Budgets) - The organization must develop a budget, which generally includes financial data for the current year and proposed budgeted information for the following two years.

This section has been designed to assist new arts and cultural groups. It is usually advisable to have an attorney and/or accountant assist with the start-up procedures. The professional, however, can only help put your information into the proper form. This section provides an outline of some of the information required for incorporation in Ohio and for completing IRS Form 1023.

Employer Identification Number
The organization must apply for an Employer Identification Number (EIN) to complete the Form 1023. You may obtain an EIN by filing IRS Form SS-4, which is published on the IRS web site. In most cases, a director or officer of the organization may obtain the EIN over the telephone by calling the IRS Center in Cincinnati at (859-292-5467) and faxing the SS-4 directly to the IRS.

Registration With Attorney General
Charitable organizations generally must register with the Ohio Attorney General on a Form CFR-1, Charitable Trust Registration Form. The information requested on this form is similar to the information requested on the IRS Form 1023. Call 614-466-3180 or visit the Ohio Attorney General web site at http://www.ag.state.oh.us/sections/charitable_law/index.htm.

Solicitation of Contributions
Most charitable organizations that intend to solicit contributions in Ohio must register with the Ohio Attorney General. In general, smaller organizations are exempt from this requirement. For more information, call 614-466-3180 or visit the Ohio Attorney General website (http://www.ag.state.oh.us/sections/charitable_law/index.htm). Organizations intending to solicit contributions in other states should check with such state's attorney general regarding registration requirements.

The Arts Services Office supports and sustains Greater Cincinnati's smaller arts organizations through programs, people and resources.

The Arts Services Office wishes to thank the Arts & Business Council of Miami, Inc. for providing the model template for this brochure, and J. Shane Starkey, a lawyer with Thompson Hine, LLP, and a member of Business Volunteer for the Arts/Cincinnati, who acted as a consultant on the updating of its content.

This site is designed to provide accurate and authoritative information regarding the subject matters covered. It is provided with the understanding that it is not rendering legal advice. If legal advice is required, the services of a competent professional should be sought.

Heather Hallenberg, Director
Mike Boberg, Communications Manager