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IRS Form 1023, Part IX

Form 1023, Part IX

Pages 9 and 10 - Financial Statements

I recommend you include the following financial information with
your 501(c)(3) application. (This list differs a bit from the list
that appears in the Form 1023 instructions, but the aim is the same.
You want to provide financial data that completely covers all past
periods for which your organization is seeking tax exempt status, as
well as projecting two years or more into the future. There should
be no gaps in your financial information.):

1. Statements showing actual revenue and expenditures for every
completed year your organization has been in existence, and for
which your organization is seeking tax exempt status. You may put
two or three years in several columns on one sheet if that is
convenient. If your group has been in existence less than one year,
skip this.

2. One statement showing actual revenue and expenditures for the
current year. This statement will probably not cover a full year.
Start with the beginning date of your organization's fiscal year and
end on the last day of a month near the time you will submit the
501(c)(3) application.

3. One statement projecting revenue and expenditures for the balance
of the current year. Start immediately after the statement in #2
above ends. End on the last day of your group's normal accounting
period.

4. One statement projecting revenue and expenditures for at least
two years following the statement you prepared for #3 above. This is
sometimes called a budget. The time period covered will be years
that have not yet started.

5. A balance sheet showing everything that the organization owns and
owes as of a recent date. The IRS prefers that you use the last day
of a month for your balance sheet. If possible, make your balance
sheet correspond to the ending date you have used for current year
revenue and expenses (see #2 above). Do not provide projected
balance sheets.

Always label your financial statements clearly!
The IRS needs to know exactly what period of time is covered.

Click on the link below to download simple worksheets you can use for
actual financial data, a projected budget, and a balance sheet, as well as
instructions. (If you do not have Microsft Excel on your hard
drive, you can download a "viewer" from the Microsoft website.)

Financial Worksheets

 
 
 
 
 

You are not required to use the format provided on pages 9 and 10
of Form 1023. If your organization has budget forms or treasurerís
reports that it already uses, you may use them, as long as the
information provided includes both income and expenses, and is
"classified," that is, broken down by types of income and expense.
Simply write "SEE ATTACHED" on pages 9 and 10 and insert your
organizationís financial forms between pages 9 and 10 of Form 1023.

Many organizations feel it is too difficult to predict what the
financial future holds. The IRS will, of course, require a projected
budget even if you find it difficult to prepare.

Some organizations find it works best to start with the goals the
group wants to accomplish, estimating goal by goal what the planned
activities will cost, and then creating a strategy to come up with
the necessary income. For other organizations, it makes more sense
to start with projected income when budgeting. For instance, a
membership group can estimate the number of people who might join,
as well as the amount of dues folks might be willing to pay.

Sandy Deja's book, Prepare Your Own 501(c)(3) Application has eight
pages covering financial information. Her supplements for Environmental
Organizations
and Animal Welfare Organizations have sample budgets
for those kinds of groups. (All books available only as ebooks.)

This page last corrected April, 2011.