Obtaining 501(c)(3) "Charitable Organization" Designation
In April 1990, the Space Coast PC Users Group, Inc. obtained a letter from the IRS granting us an exemption from Federal Income Tax. Because of the wording of our Bylaws, that exemption was as a 501(c)(7) Sport and Recreation Club . In June of 1998 we applied for and obtained a letter of exemption as a 501(c)(3) Charitable Organization.
The advantages of such an exemption are mainly: 1) donations made to the organization may be deductible on the donors federal income tax return, 2) postage rates for the organizations publications are lower than other bulk mail rates, 3) the organization is eligible to apply for public grants from various agencies, and 4) book sellers and other vendors are more inclined to give favorable prices on supplies for the organizations use.
There was much discussion at Association of Personal Computer User Groups (APCUG) and Florida Association of Computer User Groups (FACUG) meetings about the difficulty of changing from one 501(c)(x) designation to 501(c)(3). Some experts said that it was so nearly impossible, that they recommended just letting the corporate charter lapse and subsequently incorporating under another (or the same) name and applying for the tax exemption under that new entity.
At Space Coast PC Users Group, Inc., we simply took the bull by the horns and applied directly for a definitive ruling under section 501(a)(2) of the Internal Revenue Code.
After one further submittal of information, the IRS granted the corporation the desired exempt designation by letter in October 1998. A faithful representation of the Form 1023 pages that were submitted to the IRS, including answers to four additional questions from the IRS Exempt Organization Specialist is contained in the file scpc1023.pdf available here. This 13-page file in Portable Document Format (PDF) can be viewed online or downloaded. You must have Adobe Reader installed to view this file. A blank Form 1023 and other items of interest for becoming an exempt organization are available at http://www.irs.ustreas.gov/prod/bus_info/eo/eo-tkit.html. Form 1023 is contained in Kit 1023 on that page.
Other items that we were required to submit are the original IRS exemption letter from 1990, our membership recruitment brochure, and a copy of our monthly publication, The Space Coast PC Journal. These items are not published on this web site.
Space Coast PC Users Group
IRS Form 1023 Submittal
Application for Recognition of Exemption
Under Section 501(c)(3) of the Internal Revenue Code