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How To File For Your Garden Club's 501(c)(3) Status

by Becky HassebroekTreasurer, Pacific Region Garden Clubs Inc.
March 21, 2020

                                          HOW TO FILE FOR YOUR GARDEN CLUB’S 501(c)(3) Status

 

501(c)(3) Form

 

Has your garden club filed for a with the IRS? You know it’s important.

There are many things your garden club can’t do because it hasn’t obtained its status, such as:

  • You are unable to apply for grants.
  • Donors to your club will find their donations are not tax-deductible.

The 501(c)(3) status doesn’t automatically happen. You need to apply for it. So, what is it exactly? 

A 501(c)(3) organization is a corporation, trust, unincorporated association, or other type of organization that is exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code.

According to the IRS website, organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Garden clubs typically qualify. However, you may have heard horror stories about

  • The amount of time it takes to apply.
  • The amount of knowledge you need to fill out the forms.
  • How expensive it is.

Well, no more! The IRS has streamlined the process. If your annual gross receipts total $50,000 or less, your garden club can use the new IRS 1023-EZ form to apply.  You don’t need to be incorporated, and you don’t need to pay a tax professional or an attorney to do it for you. It’s easy, quick, costs only $275 and you should have your tax-exemption status within two weeks from filing. Just follow these instructions:

1. Get an EIN (employment identification number, also known as a federal tax identification number).

  • Go to https://www.irs.gov/ businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
  • Click on “apply online now” during regular business hours and follow the instructions.
  • When you’re finished, be sure to print your confirmation notice.
  • Even if you have a current EIN number, and if you haven’t filed taxes within the last three years, it will go dormant. If you use it to apply for your tax-exempt status, you will need to start all over again and wait for a refund of your first payment. If there’s any question in your mind, just apply for a new one. Make sure you apply for the EIN number with the exact name you will be using for your tax-exempt status.

2. Set up an account and pay the $275 fee.

  • Go to www.pay.gov and enter “Form 1023-EZ” in the search box.
  • The first item will be the “Streamlined Application for Recognition of Exemption under Section 501(c)(3).” That’s what you want!
  • Click on “Continue to the Form.” Select “Create an Account” to put in your bank account information or your debit or credit card.
  • After you create the account, be sure to write down your username and password. Then “Continue to the Form.” You may need to sign in again with your username and password.

3. Form 1023-EZ is quite simple. Check the box to attest that you have completed the worksheet. In Part 1: Put in your club’s name (exactly as shown on your EIN), your new EIN number, the month your tax year ends, and contact information. The user fee submitted is $275. You will list the names, titles and mailing addresses of your officers. If the person applying is not an officer, make sure you list his or her contact information as an “Advisor.”

4. In Part II: Check whether you are a corporation or an unincorporated association. Check the box that indicates you have the necessary organizing document. Add the date you were incorporated or formed, and in what state. Check the box in #5. Check the box in #6. Check the box in #7. If your organizing documents don’t contain this information, be sure and have them revised immediately.

5. In Part III: Enter the code “C42.” Check “Charitable” and “Educational” in #2. Check the box in #3. Answer “No” to questions 4 through 11.

6. In Part IV: Check the box under 1b.

7. In Part V: Leave it blank.

8. In Part VI: Check the box and type the name of the signer, title and date.

9. Submit the form. You can expect to receive your 501(c)(3) status letter by mail within two weeks!

You will be required to file a 990N postcard annually – that is also online and you will receive a letter from the IRS explaining how to do that. That is also very simple to do.

Congratulations! You are now a 501(c)(3) club!

 

Becky Hassebroek

Treasurer, Pacific Region Garden Clubs Inc.

Articles and photos reprinted with permission by The National Gardener, Fall 2017.


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