An IRS determination letter recognizes a charity’s federal tax exemption. It does not register the charity to solicit in Florida, and it does not give donors the paperwork they need to deduct a gift. Five steps close the gap.
- Register Before Soliciting
Unless an exemption in section 496.406 applies, a charity that intends to solicit contributions in or from Florida must file an initial registration statement with the Department of Agriculture and Consumer Services before soliciting, and a renewal statement annually. Section 496.405(1), Florida Statutes. It may not solicit until the department approves its statement. Section 496.405(1)(c). A charity that registered before its IRS letter arrived must file a copy of the letter with the department within 30 days after receiving it. Section 496.405(2)(h).
- Put the State Disclosure on Every Request and Receipt
A charity required to register must conspicuously display the following statement on every solicitation, confirmation, receipt, or reminder of a contribution, together with a toll-free number and website for the Division of Consumer Services:
“A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE WITHIN THE STATE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL, OR RECOMMENDATION BY THE STATE.”
Section 496.411(3). On a website, the statement must appear on any page that gives a mailing address or telephone number for contributions or processes contributions online. Printed solicitations, written confirmations, receipts, and reminders must also show the charity’s registration number. Section 496.411(6).
- Acknowledge Gifts the Way the IRS Requires
A donor may not deduct a contribution of $250 or more without a contemporaneous written acknowledgment from the charity. Section 170(f)(8)(A) of the Internal Revenue Code. The acknowledgment must state the amount of cash and describe, but not value, any other property; state whether the charity provided goods or services in return; and, if it did, describe them and give a good faith estimate of their value. Section 170(f)(8)(B). It is contemporaneous if the donor obtains it on or before the earlier of the date the donor files the return for that year or the return’s due date, including extensions. Section 170(f)(8)(C).
When a payment of more than $75 is partly a gift and partly for goods or services, such as a gala ticket, the charity must give the donor a written statement, in connection with the solicitation or receipt, that the deductible amount is limited to the excess of the payment over the value of the goods or services, along with a good faith estimate of that value. Section 6115.
- Keep Key Documents Open to the Public
A charity must make its exemption application materials and its annual returns available for public inspection at its principal office during regular business hours, and must provide copies on request for no more than a reasonable fee for reproduction and mailing, unless it has made the documents widely available under IRS regulations. Section 6104(d)(1) and (4). Each annual return must remain available for three years beginning on its due date, including extensions. Section 6104(d)(2). The IRS Tax Exempt Organization Search also lets anyone check whether an organization is eligible to receive tax-deductible contributions, so confirm the listing is accurate.
- Keep the Exemption Current
File the required Form 990 series return or notice every year. An organization that fails to file a required return or notice for three consecutive years loses its exemption automatically, as of the due date of the third one. Section 6033(j). A Florida nonprofit corporation must also file its annual report with the Department of State between January 1 and May 1 each year. Section 617.1622(4). Our post “The Florida Nonprofit’s Annual Legal Calendar” covers the remaining deadlines.
Haft Law Group helps Florida charities obtain exemption and stay compliant afterward. Contact the firm before the first fundraising appeal goes out.