Fastest Nonprofit Approval in Three Years!

For the past three years, I have been helping to launch 501(c)(3) nonprofit organizations around the country.

From beginning to end, from idea to both hands victoriously up in the air, there are eleven steps. Some are quick and easy; others are a bit more detailed and complicated.

The crux move is applying for federal tax exemption.

IRS Form 1023, or Form 1023-EZ if you’re lucky, if approved, is what “upgrades” an organization to a nonprofit organization. California nonprofit organizations have three main perks:

  1. not required to pay the $800 annual franchise tax to the California Franchise Tax Board
  2. do not have to pay income tax
  3. donors can deduct the amount of their contributions on their income tax return

I recently started working with Lisa Karadjian of Studio City, California to launch “Rediscover Studio City East,” a community-revitalization project.

On behalf of Rediscover Studio City East, I electronically submitted Form 1023-EZ (we were lucky), along with the $275 filing fee, to the IRS. Processing times run about 3 months, but I was hoping to hear back in less than 90 days. This is significantly faster than when I started Idle Tuesdays Recording Studio in 2012 – it took the IRS 18 months to approve our application! Mind you, the application was a whopping 26 pages long, asked detailed financial questions of organizations without a dollar to their name, and had to be snail mailed.

The archaic form was a waste of future-founder’s time and a total waste of IRS employee’s time. Don’t get me started on how many tax dollars went to waste too.

Well, within one week of submitting IRS Form 1023-EZ, we received our IRS Determination Letter, confirming Rediscover Studio City East was officially a 501(c)(3) California nonprofit organization!

Sometimes the stars just align and everything goes your way. Who knows if it’ll happen so quickly next time, but for now, we’re celebrating the victory and are excited to get Rediscover Studio City East up and running!

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