Page 98 - Washington Nonprofit Handbook 2018 Edition

y Lines 1a & 1b- Private Foundation

The answer to this question is “yes” if the answer to line 2 is not “yes” or if a

box under line 5 is not checked. If the organization will not qualify for one of the
public charity categories listed under line 5, consult with an attorney to understand
and comply with the rules applicable to private foundations.

y Line 2- Private Operating Foundation

True “private operating foundations” are rare. An organization that believes
it is a private operating foundation should have its application professionally
prepared.

y Line 5- Reason for Public Charity Status

Some organizations are “public charities” solely because of the activities they
carry on (churches-line 5a, schools-line 5b, hospitals-box 5c, or supporting
organizations-line 5d). If one of these boxes is checked, complete the appropriate
schedule.

Other organizations are “public charities” because they receive at least 33⅓%
of their support from the general public. Organizations whose public support is
mostly in the form of gifts, grants and contributions are described in sections
509(a)(1) and 170(b)(1)(A)(vi) of the Code, check line 5h. Organizations whose public
support is mostly in the form of payments for goods or services, such as fees for
admission to cultural events or educational seminars, are described in section
509(a)(2), should check line 5i. Many organizations have various sources of income.
Check line 5j to let the IRS decide between these two public support categories.

Part XI. User Fee Information

The IRS charges a nonrefundable processing fee for exemption applications.
The fee charged is currently $600. These amounts are subject to change, so check
the IRS website at https://www.irs.gov/ and type “Exempt Organizations User Fee” in
the search box.

The IRS does not begin processing an application until the check for the User
Fee has cleared, so consider paying with a cashier’s check or money order to speed
up an application. A new IRS revenue procedure announcing the User Fee comes
out each January; if you are submitting your application late in the year, there may
be some benefit to submitting it before January 1.

WASHINGTON NONPROFIT HANDBOOK -87- 2018