Originally posted by JHB:
If you get a definitive answer, please share. Thanks for posting.

I did not get a definitive answer. I found out that they 'could' accept the disssolution clause in the bylaws and it should be OK, but not that it would.

So I just amended the A of I. It only cost $50 and now I meet the requirement without question.

[ 10-07-2005, 02:40 PM: Message edited by: CapeDad ]

I'd still recommend a call to the IRS. Despite the language of the instructions, they may well let you get by with it in the bylaws and save doing an amendment.

When we filed (under the old rules) we didn't know about the dissolution clause. They called me and we had to fax a letter signed by 2 officers as to the language we'd be adding and that it would be voted in at the next General Meeting (which was a few months away). It didn't slow down our application at all and we were able to wait until later to make all/any changes to our documents.

Also, be sure and read that section of the instructions. If you are a corporation or charitable trust in certain states, you don't even need the dissolution clause.

On the conflict of interest policy, it's recommended, not required. But if you don't have one, you'll have to provide some attached info about how you handle potential issus. It's probably easier just to adopt their generic one. But that doesn't necessarily have to be in your organizing document or bylaws. At most, you'll likely have a generic statement with the Policy as a separate document.

One of my PTOs added this sentence in the bylaws.

All PTO officers, directors, and members will abide by the organization’s Conflict of Interest Policy as well as any state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.

[ 06-03-2005, 06:14 PM: Message edited by: JHB ]

Yes, the new features of the fill-in-the-blank form is great. Next,they'll hopefully add computation.?!

As far as the instruction pages go, though, I prefer to let the IRS mail rather than to print out all the pages (30+) on my home printer. I like to have a hardcopy to hightlight and mark up to make sure I understand the nuances of the instructions. But you certainly could just read the instructions right on your computer screen. The IRS website is very easy to use and has tons of helpful info.

Critter - I did download the 1023 packet w/o a problem. As long as you have a high-speed connection it takes just a minute or two. Even if you don't, I would recommend downloading and saving to your hard drive. The form now allows you to enter information and save it. This way, you can complete the application over a few days (or weeks) and print when you are ready.

In October of last year, the IRS issued a newly revised Form 1023, the application for tax exempt status (501c3). It is very clear now...Part III, page 2 of the form specifies two provisions that must be in your Organizing Documents (your Articles of Incorporation in your case) - purpose and dissolution. The form says in bold letters: "DO NOT file this application until you have ammended your organizing document." to include these provisions. You must also include an IRS-approved Conflict of Interest policy, with date and manner by which is was adopted.

You might as well take the time now to ammend your AOI with the state, because the IRS will kick back your 1023 if those parts are missing. You can request a copy of the 1023 packet by calling the IRS at 1-877-829-5500. They'll send it free of charge in a couple of days. Don't try to download - it's 40-50 pages.

Since you are incoroporated, your Articles of Incorporation should be your legal document representing your organizing instrument. So I'd be cautious about submitting a constitution instead unless the IRS said it was okay.

In your case, I'd just call the IRS Exempt number and ask what to do. I'm sure they run up against this all the time. It may be fine for you to put the dissolution clause in the bylaws and include those with the application.

If you get a definitive answer, please share. Thanks for posting.