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About Richard Keyt

The author of this article is Richard Keyt, an Arizona business law attorney who has formed 7,800+ Arizona companies, including 300+ nonprofit corporations.

Does My Nonprofit Need to File an IRS Form 990 While Waiting for Tax Exempt Status?

Question:  Our nonprofit corporation filed its IRS Form 1023 many months ago and has not yet been approved as a tax-exempt charity by the IRS.  Does the corporation have to file its tax return on IRS Form 990?

Yes:  A nonprofit corporation that seeks to become a 501(c)3) tax-exempt charity must file an IRS form 990 for the period beginning the day the corporation is formed  even if the IRS has not yet approved the corporation’s application for tax exemption.  The tax return must be filed EVEN IF THE CORPORATION DID NOT HAVE ANY INCOME!

If the corporation ultimately gets its tax-exemption, but failed to file Form 990s for three consecutive years, the IRS will automatically revoke the corporation’s tax exemption.

2013-10-05T18:08:48-07:00Applications for Exemption, FAQs|0 Comments
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Arizona Corporation Commission Warns Charities Not to Use Its Form Articles of Organization

The text below is taken from the Arizona Corporation Commission’s instructions for its form Articles of Incorporation for a nonprofit corporation.  The ACC Warning is for All Nonprofit Organizations that Intent to be Tax-exempt Organization. If your to be formed nonprofit organization intends to be a charitable organization exempt from federal income tax DO NOT USE THE ARIZONA CORPORATION COMMISSION’S FORM ARTICLES OF INCORPORATION!!! 

The following text is the warning the ACC gives to people on page 1 in the middle column of its Instructions for the Articles of Incorporation for a nonprofit corporation:

“The Internal Revenue Service requires that certain language be in the Articles of Incorporation before it will grant tax exempt status.  The form provided by the Arizona Corporation Commission complies only with the minimal requirements of Arizona law and does not include any IRS language.  If you intend to apply for tax exempt status after the corporation is formed, you should determine what language is required by the IRS and prepare your own Articles of Incorporation.  It is advisable to seek the advice of your tax or legal professional and/or the IRS before you form your corporation.  The Commission staff cannot give you legal or tax advice, and cannot tell you want language to include in your Articles.“

Translation:  The Arizona Corporation Commission is telling people who want to form an Arizona charitable organization to hire an experienced nonprofit organization attorney.  Of course I am prejudiced, but I recommend you hire me (a legal professional who has formed 9,300+ Arizona corporations and LLCs and who has a masters degree in federal income tax law from New York University School of Law) to start an Arizona nonprofit organization that intends to become a tax-exempt charity.  See my article called “Arizona Nonprofit Corporation Formation Services” for a list of the 28 tasks I perform and 16 documents I prepare when I create an Arizona charitable organization for the extremely low price of $1,297.

2024-02-01T14:14:52-07:00Legal Issues, Start Up Issues|0 Comments
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Arizona Corporation Commission Has New Nonprofit Organization Forms

Earlier this week the Arizona Corporation Commission published new pdf fillable forms.  See the complete list of corporate forms.  The forms are a welcome improvement to the old awful forms.  Each form also has detailed instructions.

The ACC provides form Articles of Incorporation only for a corporation that does not intend to become a tax-exempt charitable organization.  To form an Arizona nonprofit corporation that will not be a charitable organization the incorporator must prepare and file the following forms with the Arizona Corporation Commission:

Arizona Corporation Commission’s Warning for Nonprofit Organizations that Intent to be Tax-exempt Organizations

If your to be formed nonprofit organization intends to be a charitable organization exempt from federal income tax DO NOT USE THE ARIZONA CORPORATION COMMISSION’S FORM ARTICLES OF INCORPORATION!!!  The following text is the warning the ACC gives to people in its Instructions for the Articles of Incorporation:

“The Internal Revenue Service requires that certain language be in the Articles of Incorporation before it will grant tax exempt status.  The form provided by the Arizona Corporation Commission complies only with the minimal requirements of Arizona law and does not include any IRS language.  If you intend to apply for tax exempt status after the corporation is formed, you should determine what language is required by the IRS and prepare your own Articles of Incorporation.  It is advisable to seek the advice of your tax or legal professional and/or the IRS before you form your corporation.  The Commission staff cannot give you legal or tax advice, and cannot tell you want language to include in your Articles.“

Translation:  The Arizona Corporation Commission is telling people who want to form an Arizona charitable organization to hire an experienced nonprofit organization attorney.  Of course I am prejudiced, but I recommend you hire me (a legal professional who has formed 9,870+ Arizona corporations and LLCs and who has a masters degree in federal income tax law from the New York University School of Law) to start an Arizona nonprofit organization that intends to become a tax-exempt charity.  See my article called “Arizona Nonprofit Corporation Formation Services” for a list of the 28 tasks I perform and 16 documents I prepare when I create an Arizona charitable organization for the extremely low price of $1,297.

2024-02-01T14:16:17-07:00Arizona Corporation Commission|0 Comments
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Checklist for Nonprofit Corporation Bylaws

Because I form Arizona nonprofit corporations, people frequently ask me if I will charge less to form their new nonprofit corporation if they give me a copy of Bylaws they found somewhere.  I always answer no because one thing I have learned from practicing law and forming entities since 1980 is that it always takes me more time (translation more expensive) to review and revise a document given to me than it does for me to prepare the document using the form I researched and created.

People may think that one size of Bylaws fits all, but that is not true.  Bylaws are an specially troublesome legal document because the Bylaws are the rules and policies that govern the operation of the members (if any), the officers and the directors.  The Bylaws are the foundational rules of the road for governing the nonprofit corporation.

2016-12-19T21:06:20-07:00Bylaws|0 Comments
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Nonprofit Startups and the Value of a Nonprofit Attorney

Nonprofit Law Blog:  “Insightful founders of new ventures understand the value of involving legal counsel in the early stages of planning.  A knowledgeable attorney can identify issues, opportunities, and threats which allows founders to react appropriately as they plan the organizational and operational structures.  As a result, investing in legal assistance at the outset can help to avoid costly reactionary steps in later stages that might otherwise be necessary if the founders had unknowingly or unintentionally built their plan on a foundation of structures that are wrought with problems. “

2018-01-14T10:38:16-07:00Start Up Issues|0 Comments
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