Knowledge Center

Nonprofit FAQ

Can my nonprofit apply for tax exemption if we are in the planning stages and do not have a budget?

The IRS does not grant tax exemption to organizations that do not have their programs budgeted. They require detail regarding your proposed activities to ensure you qualify as a 501(c)(3) organization.

Regarding Your Budget: Your Nonprofit budget needs to balance out each year on the document you submit to the IRS. Significant profits or losses will be a point of concern with the IRS. Significant profits will prompt the IRS to assume you may be operating as a for-profit corporation.

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