Legal minute with Wilkinson Mazzeo 

Do you operate a business that creates a social impact or has a charitable purpose? Ever wondered if you could turn that business into a tax-exempt non-profit organization?

Chances are, you can!

It’s a widely misunderstood notion that once you’ve established a business that the business can never become a non-profit, even if it functions substantially as a non-profit organization would. As with many things law related, there are confusing statutes and deadlines that create this skewed perception.

Many believe, in fact, that there is a twenty-seven (27) month deadline after establishing your business within which you must apply for tax-exempt status, and if you don’t apply within that time you miss the boat. To the contrary, however, this deadline is merely the deadline under which you would receive retroactive tax-exempt status for you business. If you apply within 27 months after establishing your business you have the chance of retroactive tax-exempt recognition dating back to when your business was legally formed. There are a few other considerations and factors, but that’s the gist. More interesting yet, there is an “automatic” extension of this 27-month deadline that simply requires certain language be included in your tax-exempt application.

In sum, if you operate a business that could reasonably be recognized by the government as a tax-exempt non-profit organization and you thought you missed the boat on that possibility – think again. You should consult an attorney versed in non-profit law to determine whether you can become a non-profit, and even more importantly, if you can receive potential tax refunds for the years you could receive retroactive recognition.

Disclaimer:  The information in this article is presented for informational purposes only, and should not be taken as legal advice. Before acting on any information presented in this article, you should consult an attorney regarding the facts of your specific situation. We would love to hear from you, so please feel free to contact Wilkinson Mazzeo for a consultation.

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Wilkinson Mazzeo is a law practice dedicated to providing legal support to causes and creative businesses founded by Emily Wilkinson and Sam Mazzeo.
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