Non-profit 501(c)(3) status allows your masjid to be tax-exempt from property tax and sales tax
More importantly, this status allows the organization to receive tax-deductible donations
The incorporating documents are usually filed with your state Department of State.
However, sales tax exemption has to be filed with the state Department of Revenue (or similar names related to taxation)
You need to incorporate and register with your state
Obtain an EIN (Employer Identification Number) from the IRS
Get the following information:
Exempt purpose: in this case, it is religious (if you are starting an Islamic school, then your purpose is educational)
Purpose statement: explain the problem you are trying to solve, your solutions, and your expected results
Financial information: income (or anticipated income), expenses, and assets
Structure: members and boards
Articles of organization
Bylaws
Conflict of interest policy
Dissolution clause
Decide who will sign the application (usually the president of the organization)
Decide who the contact person is
Decide if you are going to file by yourself, use an agent, or an attorney
File Form 1023 with IRS (masjids are not eligible to file for 1023 EZ)
If you appoint an attorney or another agent to file for you, you need to fill Form 2848
Answer all the questions carefully and correctly
Ask if you are not sure
Include all the required documents mentioned above
Keep records of all donations, grants, and funding received
Keep records of your operational expenses
Non-profit organizations are required to file Form 990 with the IRS annually. However, mosques are exempt from that
Follow the following rules.
Must be organized and explicitly operated for religious, educational, scientific, or other
Should not benefit any director or overcompensate/enrich anyone
Should not be attempting to influence legislation through any activities
Should not interfere in political campaigns or allow a substantial part of your organization's activities to be geared toward influencing legislation
Should not be part of any illegal or other activities that violate fundamental policy
Make sure your organization operates the way you said it would in your application
Hold regular meetings of the board of directors and take notes.
Run your organization like a business with its own bank account and credit card. Keep all financial transactions completely separate from personal accounts.
Avoid earning unrelated business income through your organization. This is income from an activity that is regularly carried on and is not substantially related to your organization’s purpose. Such income is subject to the unrelated business income tax.