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Legal Assistance Services for Non-Profit Incorporation and Tax Exemption This page last reviewed or updated 7/24/06 This fact sheet contains a brief description of services available from the Center for Non-Profit Corporations for persons interested in forming a New Jersey non-profit organization and pursuing federal tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Section 501(c)(3) describes charitable, educational, cultural, religious and other types of organizations that can receive tax-deductible donations. If you are thinking of forming an organization outside New Jersey, you may want to contact one of the other state associations that is part of the National Council of Nonprofit Associations (NCNA) network for more information. Should You Form a Non-Profit Organization? Keep in mind that even if your planned activities would meet the requirements for tax exemption under Section 501(c)(3), it is not always necessary or appropriate to form an independent organization. Although non-profits enjoy certain privileges, there are also numerous responsibilities, laws and regulations that must be adhered to. You should also consider realistically how you plan to sustain your organization to achieve its purposes, and whether there are existing organizations that are already conducting similar activities. It may be possible to achieve the same goals by teaming up with an existing organization without creating a new one. The Center for Non-Profit Corporations can help you evaluate the pros and cons of incorporation and tax exemption as you decide whether non-profit status is right for you. For starters, read our booklet, Thinking of Forming a Non-Profit? What to Consider Before You Begin. You can download the PDF version free of charge or request a hard copy by contacting the Center. [BEFORE YOU DOWNLOAD: Read and print this IMPORTANT NOTE regarding updated IRS filing fees effective 7/1/06] . A Spanish edition of the "Thinking of Forming" booklet (Piensa en Formar...) is available here . A Brief Outline of the Incorporation/Tax Exemption Process To incorporate your organization as a non-profit in New Jersey, you must file a Certificate of Incorporation with the NJ Department of the Treasury, Division of Revenue. You can expect to pay $115 for this, which includes the filing fee, expedited service (to speed up the turnaround time for filing your Certificate), and the return of a certified, stamped copy of your certificate for your files. The Department of the Treasury, Division of Revenue has its own forms for non-profit incorporation. However, to approve tax-exempt status, the IRS will want more information in your organizational documents than is required by the State of New Jersey for state-level non-profit status. Therefore, the State forms alone are not sufficient if you want to pursue federal tax-exemption from the IRS. You will also need to develop a set of by-laws and have them adopted by your Board of Trustees. If you are interested in pursuing federal tax-exempt status under Section 501(c)(3), you should call the IRS at 1(800)829-3676 and request the following (all are free):
These and other IRS forms commonly used by exempt organizations are also available online from the IRS Web site at www.irs.gov. To access a comprehensive listing of downloadable forms and publications by number, go to http://www.irs.gov/forms_pubs/formpub.html. The IRS site also provides important information about a wide variety of tax-exempt topics (from the IRS home page, follow the link for "Charities and Non-Profits", then link to "Charitable Orgs"). The Form 1023 is the application that is filed to request recognition from the IRS as a tax-exempt organization. The filing fee depends on your organization's gross receipts for the next four years. Effective July 1, 2006, the fee is $300 (if your average will not be more than $10,000) or $750 (if your average gross receipts will exceed $10,000). Once your form is submitted, expect a turnaround of 3-4 months for the IRS to process your application. There are also a number of reporting requirements that must be adhered to after your organization is up and running. The Center's Legal Assistance Programe The Center for Non-Profit Corporations has helped over 1,000 New Jersey organizations gain their non-profit, tax-exempt status. Our Legal Assistance program (available for $384 plus Center member dues) includes a comprehensive packet of informational materials, such as sample certificate of incorporation, sample by-laws, and a host of valuable resource articles. Most significantly, the legal assistance package includes up to 3 hours of our consulting attorney's time to help guide you through the process. Assistance includes telephone consultation and a review of your draft documents before you file them with the appropriate government entities. Center membership is required to participate. As a Center member, you can continue to call us for information on legal, management and other non-profit issues after your organization is established. PLEASE NOTE: Legal services are limited to advice and/or review of documents related to non-profit incorporation and charitable tax-exempt status. All services are provided by telephone, mail or fax. Neither the Center nor its attorney consultant engages in litigation on behalf of Center members. On issues other than the law of charitable tax-exempt organizations, our consulting attorney may provide basic information regarding the law but neither the Center nor its attorney consultant will represent you, advise you, or render legal opinions. You are strongly advised to obtain independent counsel for guidance with legal matters outside the scope of the Center's services. For more information Call the Center for Non-Profits at (732)227-0800. Go back to main legal/management page
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