Nonprofit solicitation registration is mandatory in some of the states in the United States. In some states, charitable organizations can operate without wasting time on documentation and other formalities involved in Nonprofit Solicitation Registration. However, still a non profit charitable organization has to be aware of federal and state laws especially if it is planning to receive contribution from citizens living in multiple states.
Your charitable organizations might be allowed solicitation in one state but chances are that in some other state, compliance with IRS is necessary. Therefore, instead of running fingers on keyboards and wasting time on getting a comprehensive understanding of laws, most of the small and medium-sized nonprofit organizations count on lawyers possessing specialization in non profit solicitation registration.
Whether an organization is going to work with a recognized team specialized lawyers or trying to comply with IRS regulations on its own, the organization cannot proceed without having satisfactory answers to some questions. Here are the answers to some of the frequently asked questions related to non profit charity registration.
When must you register for collecting funds?
Except for some exemptions, in most of the states, most of the charities must get registered for soliciting charitable donations. California is a state offering a 30-day grace period.
Where to register?
A charitable organization has to register with the state in which it is going receive contribution from residents. Idaho, Delaware, Iowa, Indiana, Montana, South Dakota, Nebraska, Wyoming and Vermont are the states in which registration is necessary. Non-compliance is followed by penalties
Who is required to register?
With the exception of religious organizations, most of the other charities are required to file IRS Form 990. Hospitals, educational institutes, and membership or political organizations raising less than $25,000 annually are exempted in many states. However, the organization might have to apply for an exemption.
How to find out whether a charitable organization is required to qualify in a given state?
Before getting registered, a charity in North Dakota and Washington D.C. has to qualify. However, there are different requirements in different states. In Colorado, California and Oregon, charitable organizations running fundraising campaigns across states lines are considered “conducting business”. So, the charitable organization is required to get registered as a corporation in these three states.
Does a charity require services of a registered agent?
Even though it is not mandatory in most of the states, still it is better to hire a registered agent or a team of registered agents to avoid the risk of penalties due to irregularities in the documentation and failure in complying with IRS. There are some states in which a charitable organization cannot fill out IRS Form 990 without a registered agent.
There are consequences of soliciting without complying with the IRS regulations. Therefore, it is always better to depend on a lawyer specialized in non profit solicitation registration.