I am helping several planters complete their IRS 1023 applications (for 501(c)(3) status) right now. My experience causes me to recommend filing the 1023 within the first year of the planter being brought on staff.
The main reason is this: it is far easier to complete the tedious financial section based on proposed figures than on historic figures. If you file within the first 10-12 months of incorporation, you will end up spending less time on this form than if you wait until year 3 and have to research and compile actual numbers. It is daunting enough as is without the extra complication.
In case you’re wondering why a church, considered non-profit by their very nature according to the IRS, would want to file for 501(c)(3) determination. There is no question at the IRS whether churches have non-profit status. There may be a question about whether your particular congregation actually qualifies as a church based on your organization and activities. Rather than leave that up to chance during some future audit, it is a good idea to have a definitive ruling now.
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