111: Yoink, You’re Done! | Understanding IRS 501(c)(3) Tax-Exempt Status

On this episode of Charity Therapy, we’re gonna break down the often confusing world of taxes for 501(c)(3) nonprofits.

We know, taxes? Yawn, right? But stick with us because we’ll make it as painless as a Band-Aid on a teddy bear. We’ll dig into the difference between public charities and those fancy private foundations and spill the beans on why “tax-exempt” doesn’t mean you can ghost the IRS on other taxes like payroll and sales tax. Yep, even nonprofits can’t dodge the tax man entirely!

But don’t worry. We’re not leaving you to figure this out alone. Jess and Meghan dive into the deep end of what it means to keep your nonprofit’s nose clean with the IRS. Spoiler alert: You could lose big time if you snooze on your paperwork. We talk about the dreaded “automatic revocation” (cue dramatic music), which is IRS-speak for, “You’re outta here!” if you forget to do your homework. We’ve all been there, juggling life’s curveballs and trying to save the world. Sometimes, things slip through the cracks, and suddenly, your tax-exempt status vanishes like ice cream on a hot day. But hey, we’ve got tips and a nifty tool called DIY Mission Guardian to help you stay on track without breaking the bank.

Lastly, if you’re like, “Wait, what’s this 990 form everyone’s talking about?” don’t sweat it. Think of it as your nonprofit’s yearly selfie to the IRS, saying, “Look, we’re still here, and we’re awesome!” We chat about why it’s super important and how not filing it is like forgetting your best friend’s birthday—three years in a row. Trust us, you don’t want to be that guy.

Grab your favorite snack, kick back, and let’s navigate the tax labyrinth together.

In this episode, you will hear:

• Tax exemption for nonprofits isn’t a total tax break
• Combining a 501(c)(3) and a 501(c)(4) sounds like a neat trick, but no can do – one nonprofit can’t be two tax-exempt BFFs at the same time
• Missing your 990 filings is like ghosting the IRS
• Running a nonprofit ain’t a solo gig
• Before you go all in on reviving your nonprofit, take a beat
• Nonprofits hiring their first employee need to jump through all the usual hoops

Resources from this Episode

Sign up for the Birken Law Email list: https://birkenlaw.com/signup/

Facebook page: https://www.facebook.com/birkenlaw

Download Transcript

Follow and Review:

We’d love for you to follow us if you haven’t yet. Click that purple ‘+’ in the top right corner of your Apple Podcasts app. We’d love it even more if you could drop a review or 5-star rating over on Apple Podcasts. Simply select “Ratings and Reviews” and “Write a Review” then a quick line with your favorite part of the episode. It only takes a second and it helps spread the word about the podcast.