The Nonprofit FAQ

Is IRS recognition necessary before we receive donations?

Anyone can donate anything to anyone, of course. IRS recognition is only an issue if the donor is interested in receiving a tax-deduction. Application for IRS recognition must be made within 27 months of incorporation, so if 501(c)(3) status is a goal for your organization, that time limit definitely needs attention. Sandra Pfau wrote to the ARNOVA-L list on March 4, 1998: Proof of recognition of tax-exempt status is provided in the form of a letter from the IRS. While it is recommended that most nonprofit organizations apply to the IRS for recognition of exemption, it is not absolutely required. Most private foundations require proof of exemption by means of a copy of the IRS exemption letter. However, the most notable exception to seeking recognition of exemption is for mainstream religious demoninations. With respect to receipts for donors, any form of receipt indicating the amount contributed is sufficient. If noncash gifts are provided, you may want to use IRS Form 8283 to acknowledge the gift. More information from IRS publications and forms is available on my web site at: http://www.nonprofitlaw.com. Look under "IRS Forms". These forms and publications also are available from the IRS web site -- http://www.irs.gov. Posted April 24, 1998; note at top added 1/9/10 --PB