Thursday, October 4, 2012

DCIN has 501c3 Status

November 28, 2012--Within less than a month, DCIN received its 501c3 letter from the US Internal Revenue Service. And it is a final, not a probationary, letter. You can view the letter at this link.  ~Venita


Bang Head Here!
October 4, 2012--DCIN obtained its state nonprofit incorporation on February 14, 2012. Since then, it's been on my to-do list to apply for the IRS not-for-profit status as a public charity. The IRS term for approved public charities for which donors can deduct their contributions on their US federal, state, and local government income tax returns is 501c3 organizations. I even traveled to the DC area in July to attend a day-long workshop about DCIN becoming a 501c3 organization. But I've been busy saving diabetic cats and, frankly, the thought of completing the daunting 30 page Form 1023 application for the IRS struck the fear of God into me. But it had to be done, and if I wanted DCIN to get 501c3 approval before year-end, I had to get started ASAP.

I started on Monday morning at 2am. Page 1 went well, until I got 1/4 down the page to question 7. Did I want the lawyer who incorporated DCIN in February to represent DCIN on the application? I read the form's instructions and searched the IRS website, looking for the pros and the cons of this page 1 decision. SIGH. The answer is No. It's too complicated and potentially pricey to draw Lawyer Ray into this.

Many of the application's yes and no questions don't really invoke yes or no answers, despite the boxes begging for a checkmark. And there are those "If yes, please explain..." instructions. I know all the answers, and have been completely truthful, but I have been careful with the phrasing so as not to set off red flags and alarm buzzers. But, I don't know what answers will sets off flags and buzzers. The instructions say to be thorough but concise. Which is it?

The draft application is now complete and in the hands of my dear husband for an independent review. I plan to ship the final application and pages upon pages of attachments to the IRS for delivery on Tuesday, October 9. Once the application is delivered, DCIN is considered a "pending" 501c3 organization. What does that mean for DCIN and its donors?

From IRS publication 4220: Most organizations must file Form 1023 by the end of the 15th month after they were created. From me: Done.

An organization that files its application before the deadline will be recognized as tax exempt under section 501(c)(3) of the IRC from the date of its creation. While an organization’s Form 1023 is waiting for approval from the IRS, the organization may operate as a tax-exempt organization. Kewl. As of Tuesday, DCIN will be considered a 501c3 organization retroactively to February 14, 2012.

But, SCREECH, keep reading. Although donors have no assurance that contributions are tax-deductible for federal income tax purposes until the application is approved, contributions made while an application is pending would qualify if the application is approved. However, if the application is disallowed, contributions would not qualify. Now what the heck does that mean? I asked at the IRS workshop in July and the answer there was as wishy-washy as is the answer in Publication 4220. The workshop facilitator recommended that anyone concerned about the deductibility of a contribution consult with his/her tax advisor. My answer is going to be a bit easier. I see absolutely no reason why DCIN would not ultimately receive its 501c3 status. I hope it is before year end 2012 so that there is no uncertainty when donors are filling out their 2012 tax returns. However, the facilitators at the workshop said that there is a backlog of 501c3 applications and that approvals are taking several months. If a DCIN's donor has a particular question about donations made or to be made to DCIN after February 14, 2012, please email me at

 ~Venita, DCIN Founder and Director

Thank you so much for supporting the sugar kitties.

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