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About Richard Keyt

The author of this article is Richard Keyt, an Arizona business law attorney who has formed 4,600+ Arizona companies, including many nonprofit corporations. Connect with Richard on Google+

How Long is the IRS Taking to Approve Form 1023 Applications for Exemption?

Question:  If my nonprofit corporation files its IRS Form 1023 today, how long will it take before the IRS issues a letter approving the corporation as a tax-exempt Section 501(c) charitable organization?

Answer:  See the the IRS’ web page called “Where Is My Exemption Application?” to determine how far behind the IRS is in reviewing applications for tax-exemption.  We know of organizations that have received favorable IRS determination letters as quickly as six weeks and as long as two years after submitting applications for tax exemption.

2018-01-14T10:38:15+00:00 October 4th, 2013|Applications for Exemption, FAQs|0 Comments

Arizona Abolishes Charity Registration Requirement

Before September 13, 2013, Arizona law required that all Arizona charities register with the Arizona Secretary of State before soliciting charitable donations in the State of Arizona.  The Arizona legislature passed and Arizona Governor Jane Hull signed House Bill 2457, which repealed Arizona’s charitable organization solicitation registration laws and eliminated the requirement that Arizona charities must file annual charitable organization renewal forms with the Arizona Secretary of State.

HB 2457 repealed the following Arizona statutes:

  • ARS Section 44-6552 Charitable organizations; registration; violation; classification
  • ARS Section 44-6553 Exemptions
  • ARS Section 44-6554 Contracted fund raisers; registration, reregistration, contract and disclosure requirements
  • ARS Section 44-6555 Solicitation disclosure requirements; written confirmation
  • ARS Section 44-6556 Public records
  • ARS Section 44-6557 Fiscal records; inspection; retention
  • ARS Section 44-6558 Exchange of information with other states
  • ARS Section 44-6559 Rules
  • ARS Section 44-6560
2018-01-14T10:38:15+00:00 September 13th, 2013|Legal Issues|0 Comments

ACC Now Gives Email Reminders of Due Date for Corporate Annual Reports

Since October 1, 2009, when the Arizona Corporation Commission stopped mailing reminders to Arizona corporations that the corporation’s annual report was due to be filed ten percent of the corporations formed in Arizona have been administratively dissolved because the corporation did not file its annual report.  Dissolution means the corporation ceases to exist, which is almost always a bad thing.  Fortunately the problem and the dissolution can be corrected if the corporation files all past due annual reports within six years of the date of the dissolution.”

Our corporate friendly Arizona Corporation Commission adopted a new feature that will help to reduce the number of corporations that are dissolved each year due to failure to file the annual report.  Beginning September 5, 2013, anybody can do a look up for the corporation commission on the ACC’s website and enter an email address to which the ACC will send four email reminders (90, 60, 30 & 15 days) of the upcoming due date of the corporation’s annual report.  Multiple email addresses can be entered for a corporation.  Tell your computer to accept email from CorpScheduler@azcc.gov.

Once you find your corporation on the ACC’s website scroll down to the heading “Annual Reports” then click on the link that says “Subscribe to Annual Report Email Reminder” and enter the email address of the person who you want to receive reminders of the due date of the annual report.

2018-01-14T10:38:15+00:00 September 5th, 2013|Arizona Corporation Commission|0 Comments

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+00:00 September 5th, 2013|Applications for Exemption, FAQs|0 Comments

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 

5,800+ 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 $1,097.

2018-01-14T10:38:15+00:00 October 13th, 2012|Legal Issues, Start Up Issues|0 Comments

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 IncorporationIt 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 5,300+ 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 $1,097.

2018-01-14T10:38:15+00:00 July 14th, 2012|Arizona Corporation Commission|0 Comments

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+00:00 July 1st, 2012|Bylaws|0 Comments

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+00:00 July 1st, 2011|Start Up Issues|0 Comments