Section 501(c)(3) status is recognized by the Internal Revenue Service for federal income tax purposes and the states are not involved. 501 (c)(3) status does not have to be “renewed.”
But under the new provisions of the Pension Protection Act of 2006, a small charity that is not required to file a Form 990 because its gross receipts are below the threshold for filing will be required to file a new statement that it continues to exist. Any charity required to file the new report or a tax information return will lose its exempt status if it fails to do so for three consecutive years. The report is not so much a renewal as a confirmation of continued activity. (See Ready Reference Page: “Small Nonprofits Must File E-Postcard to Retain Exemption.”)
Many organizations receive an “advance ruling” that they qualify as public charities rather than private foundations when they receive their original letter of recognition of exemption. Those organizations must subsequently prove to the IRS that they have sufficiently broad sources of support to qualify as public charities on the basis of their first five years of income. But the question is whether they are public charities or private foundations, not whether they are 501(c)(3) exempts. (See Ready Reference Page: ‘Calculating Public Support.”)
Some states require periodic reports to maintain corporate status within the state and failure to do so can cause lose of corporate status. Some require periodic renewal of charitable exemption for sales or other taxes. Check with a knowledgeable attorney in your state.
Legal Issues in Volunteer Involvement:
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This pre-recorded webinar discusses: risk management and the organization's liability for the acts of volunteers; legal responsibilities in screening and placing volunteers; liability for harm to volunteers; applicability of volunteer protection statutes and workers' compensation statutes; insurance coverage and indemnification issues; applicability of employment discrimination laws; and more. The session also discusses confidentiality, protection of intellectual property, volunteer contracts, and ways to minimize risk through training and supervision. Learn to balance the risk of possible problems against the risk of turning away valuable volunteer support.
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