Under federal law, 501(c)(3) organizations are forbidden from directly or indirectly participating in any political campaign on behalf of (or in opposition to) any candidate for elective public office. Nonprofits with 501(c)(3) tax exempt status should be ever vigilant about this prohibition -- a violation could result in severe consequences.
Nonprofit, tax-exempt 501(c)(3) organizations that are required to file the annual informational tax return called the Form 990 will, starting in 2009, find themselves facing a new version of the form (as they report on their year 2008 activities). Learning about the new Form 990 now will help your 501(c)(3) nonprofit start gathering the necessary information to successfully and easily file the return.
Obtaining 501(c)(3) tax-exempt status is a critical step in forming your nonprofit organization. Tax exemption is the source of most of the benefits for nonprofits. To apply for federal tax-exempt status, you must complete IRS Form 1023 -- a daunting task. This article gives you a general overview of what to expect.