There is an old joke about an IRS auditor who calls a clergyman to confirm a large donation from a parishioner and asks, “Did Mr. Thompson donate $10,000?” The clergyman thinks a moment and replies with a smile, “He certainly will!”
The interesting thing is that while that donation is tax-deductible for Mr. Thompson, like other nonprofit organizations, the church doesn’t have to pay taxes on it, but unlike other charities, it has even less responsibility for reporting it.
So, what is religious exemption? For charities this is a big question because exemption can mean tax exemption, exemption from financial reporting, and exemption from state charitable solicitation registration in many cases.
Why is there a special classification for religion?
Churches are protected from government interference by the First Amendment to the Constitution. Therefore, the degree to which an organization is associated with the direct practice of religion determines their level of accountability (reporting) to the IRS and subsequently to the states.
The IRS categorizes religious charities accordingly: churches, their integrated auxiliaries, religious organizations, and other. Each type as defined by the IRS determines what level of reporting they need to do. In general, churches and their integrated auxiliaries (per the IRS) are treated differently from “religious organizations” as follows:
“Church” (used as an overarching term to indicate any similar place of worship, such as a synagogue or mosque) – The IRS gives 14 attributes of a church, primarily among which is being a legally recognized organization and having a congregation and an ordained clergy (see the IRS Tax Guide for Religious Organizations Glossary);
“Integrated auxiliary” is a 501(c)(3) nonprofit and public charity that is associated with a church or denomination and is internally funded, though missionary groups and youth groups do not usually need to meet this last criteria. Churches and Integrated Auxiliaries (including the definition of a missionary group) are further defined in the Code of Federal Regulations, 26 CFR Section 1.6033-2(g) & 2(h);
“Religious organizations” — according to the IRS, these can include nondenominational ministries, interdenominational and ecumenical (encompassing multiple Christian faiths) organizations, and groups whose purpose is for the study or advancement of religion; and
Other — If the activity of the organization is primarily secular in function when performed by other groups, the charity may not fit in the religious exemption. 184.108.40.206.1 (03-30-1999)
The biggest difference is that because of the need for the separation between church and state, churches and their integrated auxiliaries don’t have to file a Form 990, while religious organizations do. The other end of that separation is that religious organizations can do some, not substantial, issue based lobbying while churches cannot. Page 10 of the IRS Webinar on Churches and Religious Organizations: Do’s and Don’ts has a chart to help you see where you might fit by what is required of you.
It is important to know where your organization falls on this spectrum to know what is required of you at the federal level. Next, we will delve into how it affects state compliance.
This information is not intended as legal advice or instruction.
May 15th is fast upon us and with that we get a lot of calls asking us how to file an extension for the 990 series of informational returns from our website. Unfortunately we do not offer that service at this time but here is some information that will hopefully get your organization through the process.
Typically the e-File websites are quite straight forward and only ask you a few questions about your organization and contact information. Also, most are free or at a low cost to your organization depending on your revenue.
Once you have secured your organizations extension approval for the Form 990 then you can come back to our website and preview the state specific instructions for the charity registration renewal or annual update forms. Most states do require you to individually file an extension of time request with their state charity office if your organization will also require more time to file your renewals/updates with them.
Looking for some help with your nonprofit? Almost all states have an association devoted to nonprofit assistance no matter where your organization is in its lifecycle. Whether you just need a form or something more complex they will most likely have the answer. Most state associations offer online training, research and local events that you can attend to get more familiar with your fellow non-profiteer!
Alabama Association of Nonprofits
The Foraker Group
Alliance of Arizona Nonprofits
Arkansas Nonprofit Alliance
California Association of Nonprofits
Colorado Association of Nonprofits
CT Community Nonprofit Alliance
Delaware Alliance for Nonprofit Advancement
District of Columbia
Center for Nonprofit Advancement
Florida Nonprofit Alliance
Hawaii Alliance of Nonprofit Organizations
Idaho Nonprofit Center
Indiana Nonprofit Resource Network
Iowa Nonprofit Resource Center
Kentucky Nonprofit Network
Louisiana Association of Nonprofit Organizations
Maine Association of Nonprofit
Massachusetts Nonprofit Network
Michigan Nonprofit Association
Minnesota Council of Nonprofits
Mississippi Center for Nonprofits
Montana Nonprofit Association
Nonprofit Association of the Midlands
Alliance for Nevada Nonprofits
NH Center for Nonprofits
Center for Nonprofits
New York Council of Nonprofits
Nonprofit Coordinating Committee of New York
North Carolina Center for Nonprofits
North Dakota Association of Nonprofit Organizations
Ohio Association of Child Caring Agencies
Oklahoma Center for Nonprofits
The Nonprofit Association of Oregon
Pennsylvania Association of Nonprofit Organizations
South Dakota *
Texas Association of Nonprofit Organizations
Utah Nonprofit Association
Common Good Vermont
West Virginia Nonprofit Association
Wyoming Nonprofit Network
* States that do not have charitable registration requirements as of 9/1/2016.
Most states encourage out of state nonprofits to join their membership or offer free resources so if your state nonprofit association can not answer your question another may have whole libraries full of information for you!!
If you have a great resource and want to share it with us or other nonprofits please send us the information or link and we will post it in a future blog.
Please contact us with any comments, questions or concerns at (800) 780-6027 or support@SimpleCharityRegstration.com.
Non-compliance has been all over the news lately from the Donald Trump Foundation not being registered to solicit contributions to 7 West Virginia residents operating a fraudulent charity that netted them millions of dollars by using state-issued gaming licenses of two nonprofit organizations to divert money into corporate accounts.
If you’re looking to avoid the paperwork and not register your charity on the hope that your organization does not need to because you are exempt, that you do not hold any events outside your home state, or that all our money is used for mostly programs you may want to think again. You can no longer plead ignorance about state registration. It’s in the nightly news, it’s in your inbox and even talked about in every industry seminar, webinar and podcast.
The civil penalties associated with failure to register typically mean fines for the organization itself. They can often be fairly substantial taking quite a bite out of your group’s yearly revenue. Often, as in the State of Maryland, fines of $5,000 or more can be imposed for every single violation, so each time your group held an event and you weren’t registered, you may be adding to your tally. If a court determines that your nonprofit failed to register, it can order that it make restitution thus forcing you to return the donations received while in default.
The fines aren’t the only problem with a failure to register. If you knowingly fail to comply with the state’s charitable registration act, you could be facing up to felony charges just for failing to comply. This can extend to anyone on the directorial board who knew registration was required, and could mean extensive personal fines or even jail time for you and your board members. Not to mention the loss of credibility with the public as some states publish a list of offenders, so your organization could end up in the news defending itself against the claims of non-compliance.
The penalties for filing inaccurate IRS forms against your nonprofit can be to $20 per day up to the lesser of $10,000 or 5% of your annual gross receipts, penalties against the individual responding to any informational deficit request from the IRS in time can be up to $10 per day up to a maximum of $5,000, and possible loss of tax exemption.
A sampling of several state websites on the issue of non-compliance found that South Carolina states in their FAQ’s section, “If a charitable organization solicits contributions without being registered, submits false information to the Secretary of State, is delinquent in a filing or violates any other provision of the “Solicitation of Charitable Funds Act,” the Secretary of State may assess an administrative fine of up to $2,000 for each separate violation. It is extremely important that charitable organizations submit all forms and documents in a timely manner to avoid the assessment of administrative fines.”
Other states like Illinois conclude that your organization has been soliciting in their state the entire time your organization has been in business and will assess late fees for up to three years and require the submission of the missed annual reports to your existing charity. They will impose a $200 late registration fee and will require the annual filing for those years which they assumed you missed which results in a $100 late fee for each of those three years. The consequence can be up to $500 in late annual report fees and the late registration fee. 225ILCS 460/2 h.
Minnesota states that failure to comply may be a violation of Minnesota law and as such can result in “civil penalties, attorney’s fees, [and] costs.” Failure to file annual reports puts an organization in default in Minnesota so that they cannot solicit again until they are up to date on all filings, have paid a $50 fee, and file a new registration.
In New York, there are two overlapping categories of registration — one for soliciting from New York State residents (7-A), and the other for doing business in New York State (EPTL) — that are filed on the same forms. Monetary penalties for failing to register under 7-A are $1000 per violation and up to $100 per day of noncompliance. For EPTL it is up to $10 per day with a $1,000 max. Penalties are combined for those organizations subject to both rules.
Washington State code 19.09.271-279 penalizes non-filers after five days’ notice by publishing a press release on internet and newspapers of a notice of the charity’s unregistered status. Knowingly giving false information in your filing is punishable as a misdemeanor under RCW Title 9A Chapter 20.
The Good News
We spoke with the charity offices of 11 states that require state registration to find out their approach to noncompliance. All said that they do not generally issue penalties for initial registrations in order to encourage compliance but added that the charity should show good faith and send in the registration form with all attachments as soon as possible. Note, this generosity is reserved for charities that register proactively. A charity that the state discovers is not in compliance is likely to receive penalties.
Once registering, the charity should also make sure that the application package is complete, signed and accurate. In a case where there has been solicitation prior to registration, a couple of the states require filing up to 3-4 years of registration forms and fees to cover the solicitation period.
As you might expect, the states could not absolutely rule out penalties, which would be incurred for extenuating circumstances, such as other compliance issues. Organizations with larger revenues and/or long-term solicitation may receive some more scrutiny, so applications should be triple checked for completion and accuracy.
As you can tell, there is a difference in what we found on the state websites and in their solicitation regulations and when we spoke with them. The regulations are in place for the serious of offenders but the states really just would like the nonprofits to comply voluntarily.
Regardless of penalties, you should file where required. Penalties grow steeper for willful violations of the law. Also, when you file, your information must be accurate. The biggest penalties are reserved for those who knowingly file incorrect or incomplete information because accurate information protects states and their residents from fraud. The bottom line is that charities need to know what the state registration requirements are, how they apply to their organization, and how to follow them.
No charity ever feels like they have enough resources but it is not worth the risk of losing your reputation or the possibly of your board being fined over the cost of not registering. No one wants to go to that meeting. There are many resources out there that can help you register depending on your budget.
If you get the right person on the phone with the states, they will help you through the process but that is a long and arduous task. You will need to fill out the application or registration for each state separately and supply each with various attachments. You will also have to look up each state’s requirements one by one as each state requires a little something different.
Hiring a professional to perform the task for you is expensive and you still have to gather all the information and review all the paperwork for each state that you are registering in, so why not save the money. Ultimately, you are still responsible for those state registrations.
Use our affordable form-fill software that will help you through the process of registration and renewal easily and affordably. We have the most up to date forms, attachments and instructions available in one place with an added benefit of saving the information from year to year making renewal or expansion easier. You are able to add additional states as needed if you want to hold an event in a new state or expand your programs somewhere new.
This can be done in a few simple steps:
The compliance wizard will help you determine where you need to register or renew
Answer the basic information and state specific questions
Print the completed forms and attachments, sign and send
Please contact us with any comments, questions or concerns at (800) 780-6027 or support@SimpleCharityRegstration.com.
Welcome to SimpleCharityRegistration.com!! In this video we are going to give you a tour of our website.
Across the Top You Will Find
The “Home” page tab will always return you back to the “Login Page”
The “Contact Us” tab is where you will find the contact information for the support group at SimpleCharityRegistration.com.
The “Blog” tab is where you will find industry news, helpful information from state authorities, and miscellaneous articles essential to state registration. You can also follow us on Facebook, Twitter and our YouTube channel.
The “Login” tab is where you can login to another account or get back to where you left off in your account.
The Blue Ribbon Contains
The “Blue Ribbon” tabs are primarily for company specific information. There are 6 tabs that you can browse at your leisure but not used in processing forms.
How It Works, Get Started, About Us, FAQ, Our Guarantee, State Requirements
Left Side Navigation Bar
The left side navigation bar is where all the action happens.
The “Fiscal Year” is the first item you will see on the left side navigation bar. This is where you choose which fiscal year you would like to file forms for. A new organization or one just getting started will most likely choose 2015 as their starting point whereas an organization that has been soliciting in the past may want to start in 2014.
In the “Account Information” section you will see the “My Account” tab that is where you will find your invoices for the states you have purchased, you’re billing information and your password reset option.
The “Welcome” tab is where you will find all your instructions and helpful videos like this one.
The “Form Preview & Print” tab is where you will find information on printing your forms and saving your organizations pdf’s.
In the “Compliance Wizard you will find the “State Checklist” and the “State Registration Groups”.
State Checklist Page
The “State Checklist” page is where you want to start the process. It is here where you can choose to view the “Exemption Groups” for each state with one question. We call this the “Super Exemption Question”. There are some examples of the major exemption categories here. If you know you are not exempt you just check “No” and you will not be asked any further questions about exemptions. If you think you may be exempt check “Yes” and the exemption question groups will populate on the next page.
Here you will also choose which states you would like to register in or have previously registered in. After you have answered the questions on this page that apply to your organization you will hit “Continue” which will start populating the forms that are required for registration or renewal on the left hand navigation bar in the “State Specific” groups. The website will then take you to the next page which is the “State Registration Groups” page.
You will also notice on this page and throughout this site that each questions page has 3 buttons on the top and bottom of the page: Save, Continue and Skip. Please use the “Save” button often to save your work. The “Continue” button will save your work and take you to the next unchecked page.
State Registration Groups
The “State Registration Groups” page is next. Here you will enter information about your fiscal year, prior registration dates and a handful of questions which will finish the form population process.
The fiscal year is asked on most forms and some renewal dates are based on this date.
The “State Specific Groups” are primarily for your organization to have all your deadline information in one place. You can see renewal dates here and if an extension is available in a particular state. You will also add here any state registration numbers and answer a few state specific questions. The renewal dates are based on either your registration date or fiscal year end date. We will be sending you renewal reminders based on these dates.
Exemption Groups (if applicable)
The exemption groups will appear after the state specific registration groups based on your answer to the “Super Exemption” question on the prior page. These exemption questions vary widely in number and type state by state.
On the “Basic Information” tab is the most general questions that will be essential for any form you wish to complete such as addresses and contact information.
You will find the steps to file extensions in the “Extension Information” tab. If you are intending to renew your organizations registration but do not have your paperwork ready in time for the deadline, you can look in the State Specific groups to see if one is offered by that state. You can then check that you would like to file an extension and the form will form will populate under this tab.
You may also want to look at the “Important Tips” of navigating the website on the “Welcome Page”.
As always please contact us with any comments, questions or concerns at (800)780-6027 or Support@SimpleCharityRegistration.com
You may already know that your charity or nonprofit has to register in any state where you’ll be seeking donations. For those groups who use social media to raise funds, this can mean meeting the requirements of almost forty states before you ever embark on a fundraising project. While that is certainly a paperwork nightmare, what you may not know is that registering once simply isn’t good enough. In most cases, there are ongoing registration requirements with which you must comply.
Once and Done?
Filling out the paperwork to register your charity is a nightmare. Just deciding whether you’re required to register and which states you should register in is rough enough. After you’re done, though, you’re not truly done. Instead, you have to look at renewal guidelines on a state by state basis. While most states and the District of Columbia require you to renew your registration on an annual basis, not all of them do. Some of them — Arizona, Delaware, Iowa, Idaho, Indiana, Montana, Nebraska, Nevada, South Dakota, Texas, Vermont, and Wyoming — don’t require registration at all. Some of them require renewal separately from annual financial reporting. Learning exactly what to expect can be difficult.
Is Renewal Hard?
Some states have managed to streamline the process a bit so that you can renew without a hassle using much of the same information you submitted initially. Unfortunately, like every other aspect of charity registration, that’s not always the case. There are states that require you to complete the same level of paperwork you did the first time during the course of renewal.
Is There an Easier Way?
Absolutely!! We can help!! Whether you’re registering the first time or trying to get your organization renewed to meet ongoing requirements, we make it easier than ever to make sure your group is complying with the standards in all applicable states, which is a must if you plan to raise funds in more than one state. To learn more, get started now.
Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegistration.com.
If you’re one of the many nonprofits preparing to raise funds in the upcoming year, you may already be familiar with the requirement to register in each state where you plan to raise funds. Because many are now using tools like social media to raise funds, the requirement to register in the states that require it is almost a foregone conclusion. If you’re looking to avoid the paperwork hassle, though, and not register your charity on the hope you qualify for some hidden exclusion, you may want to think again. The consequences associated with your actions are more serious than you think.
The civil penalties associated with failure to register typically mean fines for the organization itself. They can often be fairly substantial, too, taking quite a bite out of your group’s yearly revenue. Often, as in the State of Maryland, fines of $5,000 or more can be imposed for every single violation, so each time your group held an event and you weren’t registered, you may be adding to your tally.
The fines aren’t the only problem with a failure to register. If you knowingly fail to comply with the state’s charitable registration act, you could be facing up to felony charges just for failing to comply. This can extend to anyone on the directorial board who knew registration was required, and could mean extensive personal fines or even jail time (for multiple offenses in the State of Florida) for you and your board members.
Go The Easy Way
Fortunately, we make registration easier than ever, so there’s no problem with compliance. With a streamlined process that means one simple form ensures you’re complying with every state in which you plan to raise funds, and links to all the relevant information, it’s simple to get the paperwork you need completed immediately and never have to worry about facing penalties again. Get started now.
Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegistration.com.
Registering in Washington, DC is a multi-step process in which the steps must be followed in order to complete the process with success. The best way to register in DC is online through the Department of Consumer and Regulator Affairs (DCRA), Corporations Division, CorpOnline Web Portal. The steps are different according to your type of organization — i.e., foreign, not located in DC, and domestic, located in DC.
Here are the steps that we recommend to our out of state customers.
Foreign Organizations (not located in DC) — Will be required to provide evidence of foreign corporate qualification, DC tax exemption and other requirements are necessary prior to obtaining solicitation registration.
1. Corporate Registration:
a) Nonprofits must file for corporate registration with the FN-1 Form as a foreign entity conducting business in DC. It is best to do this through the portal because you can submit a copy of the confirmation email as evidence of filing with your DC tax exemption application (Step 2b).
During this process, you will need to appoint and maintain a Resident Agent to receive legal notices in DC and
Provide a Certificate of Good Standing from the state in which your organization is incorporated.
Provide a copy of your IRS determination letter.
b) If you plan on using a name in DC other than your registered corporate name, you also will need Trade Name registration. If you include a trade name on your BBL-EZ (Step 3) you will need to register that name.
2. DC Tax Exemption
a) File FR-500 to register with the DC Office of Tax and Revenue. This can also be done faster online because processing is faster and is designed to only accept fully correct entries, which avoids time delays resulting from rejected forms.
b) File FR-164 to become a tax-exempt entity in the District. (Fillable version). You can mail this or drop it off in person. We recommend you include a stamp-and-return copy in self-addressed stamped envelope to include with your BBL-EZ filing (see below).
3. Business Licensing:
a) Once steps 1 & 2 are completed, the organization can apply for the Basic Business License for Charitable Solicitation the BBL-EZ form. (This is the form found at Simple Charity Registration). You will need to include your registration certificate from Step 1 and a copy of your FR-164 filing from Step 2b.
Note: Accredited educational institutions, religious organizations, and member-based groups need to file the BBL-EZ to receive exemption.
Welcome to Simple Charity Registration, a do-it-yourself, form-fill software developed by nonprofit and IT professionals to make it easy and affordable for charities to comply with state charitable solicitation registrations.
If you’re watching this, you likely know that most states require that charities register with them in order to be able to solicit funds in their state. This requires initial and annual filings that have different deadlines and requirements. Those who have been through this process know it can be long and arduous.
Our mission is to bring affordable automation of the state charity registration process to all US nonprofits so that they can refocus human and financial resources on accomplishing their missions.
What can Simple Charity Registration do for your organization?
We can save you hundreds of hours of work through 4 steps which streamlines the individual state process by answering core questions that are asked on every application and a handful of state specific questions all the while auto populating all the forms for you.
Simply 4 Steps
First our Compliance Wizard will help you determine which states that your organization is required to register in and where your may be exempt from registration. Here you will also learn about categories of nonprofits which are exempt from the registration process. Also, during this step the system will begin to populate the necessary forms and the state specific question groups.
Next, you will begin the questionnaire process which includes questions about your organization, its people and some of the people you do business with.
You continue the process by filling in any state specifics and some financial questions from your own Form 990.
Lastly you print and review your organizations forms and attachments, sign and send them to the state.
The end product is auto-filled forms with the required addenda and a checklist of instructions with information on required signatures, attachments and fees, and how to file. We also include any additional information of note on the registration procedures for that state.
Another benefit of our software is you will receive email reminders 30 and 7 days prior to the upcoming state specific deadlines hopefully saving you from any nasty late fees and keeping you compliant.
Along with the state forms we provide updated instructions and state resources pages with links to regulations and contact information. We also offer an informative blog with industry news, information on upcoming conferences & webinars and anything else that we think you might find helpful to your organizations mission.
Simple Next Year
Finally, we make it even easier next year so that you only thing that you will need to do is review the prior year’s information, make necessary changes to your data, print and file.
We’ve been in your position with the confusion and frustration of filing state charitable solicitation registrations. So here is our answer to help your nonprofit remain transparent and in compliance so that you can continue your valuable work.
Let’s Get Started!! Your first state is free and after that, you can choose to pay as you go with the individual state form packages for $50 each or purchase the “All States Package” for $900 which includes the forms for all 39 states. Both packages do contain the forms necessary for each individual state including forms for extensions, exemptions, registrations, renewals, annual filings and in some cases financial statements.
Head on over to the “Get Started” tab, create an account and either poke around or check out our Basics Video where we give you valuable information to help you navigate the software!!
Please contact us with any comments, questions or concerns at (800)780-6027 or support@SimpleCharityRegstration.com.