[Thantos]

Spoke with an accountant that does a lot of my family's taxes and he indicated that corporations weren't subject to the minimum corporate tax for the first year and only had to pay the franchise tax.  Since we had no income there is no tax.  I did some further searching and found http://www.ftb.ca.gov/forms/misc/1083.pdf which states

For your first taxable year:
• If your corporation incorporates or qualifies to do
business in California on or after January 1, 2000, you are
not subject to the minimum franchise tax. Your
corporation is still liable for a franchise tax on its net
income.

Now as for the tax exempt application he doesn't do them.  I seem to recall that the forms weren't that complex.  I'd like to put a WG together to gather all the forms up, review them, and then submit them.

[Thantos]

http://www.irs.gov/charities/article/0,,id=212562,00.html

[metallica48423]

That's good to hear.  Are there any sticking points you think might cause issues for us?

[RedOne]

It's good news there is no tax to pay for sure. Hopefully we are able to collect all the necessary information to file soon.

Maybe someone here knows someone who could assist a little further?

~RedOne

[Thantos]

That's good to hear.  Are there any sticking points you think might cause issues for us?

The narrative where we explain what we are doing and intend to do and basically why is it in one of the tax exempt categories.

One thing that I did notice while scanning over the form is that they want the name and address of all directors and officers.  I believe that IRS filings aren't public records but I need to confirm that.  Looking at the Apache submissions they had their directors listed as an attachment and didn't post that.  At the very minimum I'd want to do that.

I'd like to work my way through the form even before the electronic version is active so that we know what information is required and have an answer for it.  But we'll definitely want to use the electronic version in order to save money.

One thing we need to do (it appears) is actually solicit some donations and membership dues.  We want to fall into one of the two categories:

509(a)(1) and 170(b)(1)(A)(vi)—an organization that receives a substantial part of its financial support in the form
of contributions from publicly supported organizations, from a governmental unit, or from the general public.

509(a)(2)—an organization that normally receives not more than one-third of its financial support from gross
investment income and receives more than one-third of its financial support from contributions, membership
fees, and gross receipts from activities related to its exempt functions (subject to certain exceptions).

and having the numbers from donations by individuals and entities and the amount of dues will help us in that regard.

[Jeff Lewis]

From Josh:

I realize that the organization needs money, but it shouldn't need it to fulfill one of those two right now. It has a ton of in-kind donations already. Even the volunteering time counts as an in-kind donation. So long as people track their hours and you can come up with a reasonable amount of money that they would be paid if they were to be paid for those duties, they are a donation.

For instance, an in-kind donation of my  time working on software would be worth a lot more than someone donating flipping burgers.

[Thantos]

But none of that counts as "financial support".  From page 9 of the form:
 - Gifts, grants, and contributions received (do not include unusual grants)
 - Membership fees received
 - Gross investment income
 - Net unrelated business income
 - Taxes levied for your benefit
 - Value of services or facilities furnished by a governmental unit without charge (not including the value of services generally furnished to the public without charge)
 - Any revenue not otherwise listed above or in lines 9–12 below (attach an itemized list)
 - Gross receipts from admissions, merchandise sold or services performed, or furnishing of facilities in any activity that is related to your exempt purposes (attach itemized list)
 - Net gain or loss on sale of capital assets (attach schedule and see instructions)
 - Unusual grants


That is the categories for the "Financial Data" page under revenues.

[Jeff Lewis]

Doesn't fit under gift? I guess that would be stretching it...

[Thantos]

Think about it, we are talking about financial support.  All the in-kind donations in the world wouldn't pay for rent (if we had rent to pay).

The in-kind donations may come into play during other areas of the form.  I just don't see it coming into play for determining if we are or are not a private foundation.

[Jordan]

Just updating this with some new links for my records:
Cali state tax exempt process: http://www.ftb.ca.gov/businesses/bus_structures/Applying_for_tax-exempt_status.shtml
Federal (IRS) exemption process: http://www.irs.gov/charities/article/0,,id=96122,00.html

Xycose, Fustrate, would you guys know any accountants in your state who could help us through the exemption process?

[xycose]

Unfortunately I don't know any that would help us out for free, or even cheap.

I have not read through the pages entirely (As I am at work on break, and sorry about not responding here last night, Jordan, I forgot and just remembered) but I will do when I get home, I'm guessing that we can probably manage to do it ourselves.