How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask DanielleCPA Your Own Question
DanielleCPA
DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 793
Experience:  Years of Experience in Business & Personal Taxes
50747609
Type Your Tax Question Here...
DanielleCPA is online now
A new question is answered every 9 seconds

In forming a 501 (3) - Can employees raise money and be paid

This answer was rated:

In forming a 501 (C) 3-- Can employees raise money and be paid a salary while the IRS form is being approved?

Welcome and thanks for your question!

There is nothing precluding a newly-formed charitable organization from operating while it is waiting approval from the IRS for its Form 1023 (Tax Exempt Status) Application. Tax-exempt status is usually retroactive to the date the organization was formed.

However, before paying salary to employees and soliciting donations, you should make sure you are a registered organization in the state of Texas. This helps protect the organization. To register, certain paperwork will need to be filed with the Secretary of State (more info on those forms can be found here). These forms will need to be completed after Legalzoom completes the initial paperwork for forming the organization.

Please let me know if you need any additional clarification and I will gladly assist you. If this satisfactorily answers your question, please give the answer a positive rating. Thanks and have a great day! Best wishes to you and your non-profit!
DanielleCPA and other Tax Specialists are ready to help you