Final Steps to Start a CA 501(c)3 Tax Exempt

Once each of the individual applications and notices for establishing the California Nonprofit Corporation or Association have been met, you are ready to move on to drafting the I.R.S. 1023 application in order to have your California NonProfit Organization to be recognized as Tax Exempt by the I.R.S.

Whether you have just established a new California Nonprofit Corporation or Association or you have an existing California NonProfit that's been established for any extended period of time, the I.R.S. will consider a number of factors in determining whether you are eligible for 501(c)3 Tax Exempt recognition. These factors include:

    A) Your organizing document and specific provisions the I.R.S. requires: in addition to the provisions required by the State of California in your Articles of Incorporation or your Articles of Organization, you must also include:
    • a Dissolution Clause that requires any assets of your organization at the time of dissolution be donated to another like charity
    • a 501(c)3 eligible purpose, which states that your exclusive purpose is charitable, religious, educational, scientific, literary, public safety testing, amateur sports competition or the prevention of cruelty to animals or children. (If specifically supported, your purpose may fit more than one of the above eligible purposes.)
  • The specifics of any revenues you’ve accepted, how they've been used and who has benefited from those revenues.
  • The makeup of your Board of Directors and the Officers of the California NonProfit Organization.
  • Your specific intentions of obtaining revenues in order to operate your California NonProfit Corporation or Association including fundraising.

The I.R.S. will analyze any existing finances and projections for the immediate future to make a determination regarding your suitability as a 501(c)3 Charity or Foundation.

The I.R.S. allows retroactive recognition to an organization that was formed within 27 months of the postmark on their 501(c)3 application. This means that as long as you have the 1023 filing done

If you are earlier in the process and have yet to establish all of the details of the organization you intend to file, there is an opportunity to refine your intentions and organizing rules to insure that you'll be operating consistent with the most favorable designation possible as a California NonProfit Tax Exempt entity. We recommend that you contact us at in order to gain the advantage of our experience to help you determine the most advantageous path towards NonProfit Tax Exemption. We’ll share the expectations the I.R.S. has for applications filed for the same specific activities you will be conducting.

Under any filing circumstances, decisions made in the beginning are likely to affect your NonProfit Organization throughout its life. Our job at is to see that the very best decisions are made today to insure you the most productive opportunities and the greatest success as you proceed with your NonProfit Tax Exempt activities.

Call us at (310) 963-7640 with any questions.