We are excited to announce that OrgSpring recently received official 501(c)(3) approval from the IRS via determination letter. You can see the OrgSpring exemption letter here.
It\’s a simple document, really, and it outlines the basic organization exemption information. Things like EIN, Accounting period (this determines filing timelines for tax forms), whether a 990 is required, and the effective date of exemption, among other important items. The letter spells out the section of the code which the organization falls into. In our case, we fall under section 501(c)(3) and are currently classified as a public charity.
What\’s not mentioned in the letter is any reference to why it took the IRS almost 2 years to approve our application. It didn\’t make reference to why the application wasn\’t even looked at until more than 12 months after it was initially submitted, nor why it took the Director of Exempt Organizations nearly 2 whole months to review the final application after the exempt specialist had put it forth with a recommendation to approve.
Ultimately, the changes we made to our initial application were minor. We were asked to answer a few questions in relation to the specifics of our operation. We were asked to clarify, and to be more specific, about the organizations with which we pledged to work. I had to sign a few documents, submit them via fax, and that was it. Of course, we consulted with a CPA and an attorney, both of whom specialize in nonprofit work. But altogether, it took only a few days of work to submit the required paperwork, and from that point, it was only a few more days before the specialist felt comfortable making a recommendation to approve. I still wonder why that process could not have been handled sooner.
While I am ecstatic to finally receive our exemption, I feel sorrow for the wasted time, and painful \”fact-finding\” missions to which thousands of other nonprofit organizations are being subjected in order to gain tax exemption under the current IRS administration.
A Broken System
The plain truth is that the system is broken. We hear that often in relation to our government, especially in light of recent events where a total government shutdown continues even as I write this post. But never more clearly is the ineptitude of our government on display than with the Internal Revenue Service.
At OrgSpring, we\’ve written about the tax exemption process extensively. Here\’s an article detailing the process of tax exemption, and the steps which an organization must complete in order to gain approval. Here\’s another article about the scandal that recently unfolded centering on illegal and discriminatory targeting within the IRS exemption office which led to the ousting of the previous director and the installation of the new. This article gained the attention of a Congressman and prompted weeks of additional research on our part to provide the Congressman with information he could use in trying to reform the IRS. That same article also led to correspondence with a Senator on the oversight committee regarding the same issues in the IRS.
In all, we provided the senator and congressman with nearly 10 pages of research, statistics, and reports culled from sources that include the IRS website, conversations with IRS officials, conversations with attorneys and CPAs that work with the IRS in official and unofficial capacities, and through research reports commissioned by our own government. In it, I outline areas in the process where the review system breaks down, and make recommendations on how to improve that review process for all nonprofits making applications. I detail specific steps to be taken to cut the review time down from 2 years to just 2 months, without needing to add staff or without having to incur extra cost.
Later, we\’d setup a petition on change.org asking the public to request that the IRS review and rule on tax exempt organizations in a timely manner, because, amazingly, there is no law or rule that sets any effective deadline or timeline for the IRS to review and approve or deny our applications for tax-exemption, and unless you have the personal phone number of the President, the IRS doesn\’t really seem to answer to anyone. Have you tried calling IRS support? Good luck with that. The fact is, thousands of important nonprofit organizations are being created every year which are systematically ignored by the administration put in place to help those organizations exist, to thrive, and to provide essential services to needy segments of our economy.
The timing of our actual approval is curious. It comes just a few short weeks after the activity with local representatives. Did they have something to do with said approval? I don\’t know, and they\’ll probably never say. But, if the congressman and senator were involved in pushing it along, then I salute those two gentlemen for helping a constituent who helps hundreds of other organizations and individuals do what they do.
Fixing the Broken System
One thing is certain…nothing will change until we all demand action be taken to remedy this broken system. We must get our representatives involved, and if our current representatives wont take action on issues important to nonprofits we need install representatives who will be willing to take our concerns to congress and make changes to the system so it can help our organizations. Nonprofits are the companies which provide essential services when the government can\’t provide them , won\’t provide them, or is too shutdown to provide them.
To be clear, I am not advocating for any particular representative or future candidate, or any particular political party. Rather, I am suggesting that we, as nonprofit executives, get involved in the public – political process because it has so much influence over how nonprofits operate.
Let Your Voice Be Heard!
If you are involved with an organization waiting for official approval, please leave a comment here or get in touch with us. As a nonprofit dedicated to helping other nonprofits, if we can do anything to lighten your burden, shorten your wait, or ease the pain – we\’re happy to do it. It is our mission!