IMPORTANT If a chapter is not incorporated and a suit is filed, the chapter Officers and Directors may be personally liable. This is why it is very important that chapters fulfill section 07 Chapter Relations of the Policy & Procedures manual.
- First you need Articles of Incorporation as a non-profit, also referred to as the certificate of incorporation or the corporate charter. This document acts as a charter to establish the existence of a corporation in the United States and is filed with your State Secretary of State. This can be done online and will need to be renewed every few years. Each state is different.
- Second, once incorporated, the chapter needs a Federal Employer Identification Number (FEIN). This can be completed online at irs.gov.
- Step three: Once you get incorporated in your state and get your FEIN, you need to file a form 1024 with the IRS to get tax exempt status. It takes about 6 weeks, once filed. Help with this is available.
- Step four: The chapter needs to file a form 990N which is the tax return for a non-profit that has total revenue under $50,000. If the chapter’s revenue is between $50,001 and $250,000 they must file a 990-EZ. This must be done within five (5) months of the close of the chapter’s books. Most have a December 31 year end, therefore the 990 must be filed by the end of May.
- NOTE. If a chapter has NOT filed a 990 tax return with the IRS within the past three years, they must start all over by filing form 1024.