7 Deadly Mistakes of Filing Your IRS Non-Profit Application
Learn to Avoid the Mistakes that Kill or Delay Nearly 50% of IRS Applications for Tax-Exempt Status
Published by WarpDrive Marketing, LLC at Smashwords
Copyright 2011 WarpDrive Marketing, LLC
All rights reserved. This eBook or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations with proper attribution, or in a book review.
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Centennial, Colorado 80122
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This eBook is licensed for your personal enjoyment only. This eBook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
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This eBook is presented solely for general educational purposes. The author and publisher are not lawyers or accountants and are not offering legal or financial advice. While best efforts have been made in preparing this eBook, the author and publisher make no representations or warranties of any kind and assume no liabilities of any kind regarding the accuracy or completeness of content and specifically disclaim any implied warranties of fitness for a particular purpose. Neither the author nor the publisher shall be held liable to any person or entity with respect to any loss or incidental or consequential damages cause, or alleged to have been caused, directly or indirectly, by the information contained herein. Every organization is different, and IRS guidelines and applicable law are subject to change. The reader is responsible for determining their need to consult a lawyer or other competent professional.
This eBook is also available in an audio version at many online retailers, and makes a great gift for anyone you may know who has considered starting a non-profit organization!
Table of Contents
About
the Author
Introduction
What
to Do if You Have Not Yet Filed Your Non-Profit Corporation
Deadly
Mistake #1: Failure to Clearly State Your Organization's Mission and
Purpose
Deadly
Mistake #2: Failure to Describe How All of Your Activities Relate to
Your Purpose
Deadly
Mistake #3: Failure to Complete and Enclose All Applicable
Schedules
Deadly
Mistake #4: Failure to Include Your Organization Name and EIN on Each
Page
Deadly
Mistake #5: Failure to Include Proper Addenda and Policies
Deadly
Mistake #6: Failure to Address Conflict of Interest Issues
Deadly
Mistake #7: Violating IRS Rules by Indicating Non-Exempt Purpose or
Activities
Closing
Comments
Helpful
Resources
About the Author
Christian LeFer is a marketing and strategic consultant with clients across the United States. He has developed projects for charities, churches, CEOs, and congressmen. Christian and his wife Allison, who is a court-appointed special advocate (CASA), have become tireless advocates for children in need of care, through their experience as a therapeutic foster family and recently as adoptive parents. The LeFers are proud to have been named 2011 Foster Parents of the Year by their regional therapeutic foster care agency provider.
Christian previously had followed a career path across a spectrum that included construction, classic autos, issue advocacy, and marketing and communication. Ultimately, his entrepreneurial streak, coupled with a passion for creating positive change, proved too strong to resist. Over the past ten years, he has formed, directed, advised, and consulted for non-profit organizations with diverse missions ranging from foster parenting to private education, church and civic organizations, and those promoting civil liberties and free-market philosophy.
Now he wants to help as many other non-profit leaders as possible achieve success. Christian specializes in guiding individuals and teams to bring their world-changing mission into reality by helping crystallize their vision into an action plan, with a constant eye to seeking and harvesting new opportunities for growth.
In the foreword to his forthcoming book, Compelled to Action: Voluntarism's Victory over Coercion, Christian declares:
"Contrary to conventional wisdom, I believe that the need for committed individuals to launch innovative non-profits and charitable ministries in the near future will be greater than at any time in our nation's-even our war/d's-his tory. But these leaders must outrun a new spirit of government compulsion.
"Economic crisis-whether the one we've seen or the one that many believe is looming-is not a reason to hesitate starting a non-profit. In fact, it's the reason you must heed the call, if you have one, to serve others. Get started now.
"Political elites will never solve the world's problems. Find me a need and I'll find you a free individual who has a vision to meet it voluntarily and more effectively than any bureaucrat could. True voluntarism beats coercion, even when masked as 'incentive', every time.
"When it comes to doing good unto others in a way that is compassionate, efficient, and transparent, nothing can match the independent non-profit organization or ministry. I hope you'll join me in pursuing the road less traveled-/ will do all I can to make that path easier for you to take."
Introduction
A Special Breed-The Social Entrepreneur
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Inspiration can come from the Bible, through classic poetry, and from our innate desire for community. Action comes from our will.
Anything you did for even the least of my people here, you also
did for me.
-The Book of Matthew
If I can stop one heart from breaking,
I shall not live in
vain;
If I can ease one life the aching,
Or cool one pain,
Or
help one fainting robin
Up to his nest again,
I shall not live
in vain.
-Emily Dickinson
***
Do you look at the world and see injustice, preventable suffering, lack of knowledge or hope-and envision a better world? Whether you are motivated by faith or simple compassion, the fact is, anyone who wants to start a non-profit organization probably fits a certain personal profile-it seems many of us are "wired that way."
Non-profit leaders are a particular breed. "Doers" rather than "wishers"-distinguished not so much by compassion, though it is essential, but by action. Men and women of action who are more concerned with contributing to the world than with getting something out of it. Are you the type of person who looks at the problems of the world and wonders: "Why isn't someone doing something about this? There must be a solution!"
If you're reading this eBook, you know exactly what I'm talking about. You're someone who wants to step in and make some thing happen simply because you don't see anyone else doing it. You aspire to be the solution.
Being a "social entrepreneur" is often more a calling than a sober career choice, a calling driven by new ideas and a passion for creating a better world. However, it is not a decision to be taken lightly. For many years, the problem I struggled with is, "How do I bring about this change while putting food on the table for my family?"
Starting a non-profit organization from the ground up may at once be the hardest and the most rewarding thing you'll ever do. Whoever coined the saying "The Road to Hell is Paved with Good Intentions" must have made an error in completing their IRS Form 1023 non-profit application! As you will see in "Deadly Mistake #7," even making an honest mistake can land you in "Form 1023 hell".
In other words, unfortunately, passion alone does not a successful charity make.
It's universal. You could be the next Michael Jordan, but that doesn't mean you'll pick up the ball and make points on your first five shots. We've all seen well-meaning leaders with every earthly advantage try and yet fail to improve conditions for the masses. On the other end of the spectrum, we have Mother Teresa, in possession of no wealth or high station, who changed the destiny of thousands and touched the heart of the world. It takes a special combination of spirit and spit to make it all happen. As a doer, you've already taken the first action step by reading this eBook.
Will you take the next step?
If you're just starting out on your non-profit effort, there are plenty of opportunities for you to learn hard lessons-despite your good intentions.
But why go through unneeded heartache in filing your IRS application for Tax-Exempt Status before you ever get off the ground?
Anyone who has attempted to file the Form 1023 knows it's an exercise in frustration. So what's a non-profit leader to do to navigate the IRS Exempt Organizations minefield? Learn as much as you can from those who have already overcome the obstacles.
Many serious mistakes can be avoided simply by being aware of them. The problem is, the IRS 1023 application process is fraught with traps, IRS Red Flags™, and few straight answers: Consider this eBook a "seaman's chart" to mark dangerous shoals, rough waters, and the pirates who await unsuspecting explorers.
For too long, the journey to non-profit success has been needlessly painful. My passion is to make the path to serving others through a non-profit mission easier and faster than it has ever been. Come on, let's get started!
First, Let's Keep It SIMPLE
The purpose of this eBook is not to tell you how to be a great leader, or how to build the next United Way. If you're interested in that, there's plenty of time once you get your non-profit corporation formed up, and then after you obtain IRS tax-exempt status.
The journey of a thousand miles begins with one step. But thousands of people who dream of starting a non-profit never even begin because of the daunting IRS application process. The fact that you're even considering taking on this kind of effort without a lawyer says a lot about you.
However, let me be clear: I have nothing against lawyers. Some of my best friends are lawyers! We are in many ways, however, the victim of our own choices-we've foolishly allowed "experts", including attorneys, to impede our involvement with our government representatives, our kids' schools, and even get between us and our fellow Americans.
My purpose in creating GetNonprofitStatus.com and my Non-Profit Launch Kit™ is to empower YOU to control your non-profit's destiny so you can use it to change the world. You shouldn't lose sleep over the daunting application process, or be forced to bear the expense of a lawyer's or accountant's services to do that.
I guarantee that preparing your IRS 1023 and ancillary paperwork using my step-by-step system will increase your chances at getting non-profit status for your organization-faster and at less expense that you might have imagined. Sure, it will require some ingenuity, perseverance and attention to detail, but in the end, you will benefit by truly "owning" the process. The exercises and processes to clarify and perfect your organization's mission and vision that I am offering to teach you - if you are willing - will equip you to raise money, build a board and succeed for the long haul.
So, without any further ado, I'm going to open the curtain and share my success AND my mistakes-so that you don't have to make the same ones I did.
By the time you're done with this eBook, you should have a solid idea of what not to do - as well as the basic elements of what you need to do. So, breathe easy, grab a highlighter and a pen for notes, and let's "demystify" your IRS Form 1023 "Application for Recognition of Tax-Exempt Status. You can realize your goals and dreams for your organization.
AND PLEASE NOTE: If you have not yet created your non-profit corporation – the basic starting point of your effort – or have not chosen a name for your organization, obtained an EIN (also know as an “IRS Tax-ID Number”), opened a bank account, drafted bylaws, or chosen a “beginning board”, I offer a 100% FREE training course on “How to Start a Non-Profit Organization is 5 Easy Steps” at www.getnonprofitstatus.com/training.
(If at any time you desire additional information, tools, or consulting in starting up or obtaining IRS Tax-Exempt Status for your non-profit organization, contact me or go to www.GetNonprofitStatus.com. There I offer significant resources for free, and if you want to go to the next level, professional-level training and Non-Profit Launch Kit, with the patent-pending Turbo1023 online software, for purchase.)
