US tax exempt status for foreign NGOs
Foreign NGO's are encouraged to apply for recognition of tax-exempt status by the U.S. Internal Revenue Service (better known as a 501(c)(3) letter). The following information guides you through the process of applying. Please note: This recognition by the IRS qualifies you as a charitable organization in the United States. For Foundation and Trust grants, it makes you a qualifying organization. For individuals and businesses, a donation to you is not tax deductible because the money is being sent to a foreign charity. Only contributions used in the U.S. are considered tax deductible. The IRS maintains a website where the application process is outlined (www.irs.gov). Click on the section for "Charities and Non- Profits" found in the left-hand column. Then click on the "Application Process". This portion of the website will guide you through the application process for recognition by the U.S. Internal Revenue Service. All publications and forms can be downloaded from this site. All forms must be completed in English! If you are submitting copies of documents (constitution, bylaws or other documents), they must be notarized by a legal official. The original documents may be in a native language, but an exact translation (in English) of each document must also be provided.
1. Download Publication 557, the complete instructions for the application process.
2. Download Form SS-4. This form is an application for an Employer Identification Number. Even foreign NGO's need this number because it becomes your tax identification number. On the website and in the instructions, they have you fax the form to Ogden, Utah. Foreign NGO’s can call a special IRS office in Philadelphia that handles organizations located outside of the US at (215)516-3990 for assistance in completing the form. The form must then be faxed to that office in Philadelphia at (215)516-3990. You must obtain the Employer Identification Number before completing your IRS 501-c-3 application.
3. Download Form 1023, the application for recognition of taxexempt status. The instructions are outlined in the Pub 557 and within the 1023 form. It is on this form that the organization explains exactly what they do and how they do it. The form requires that the organization provide a copy of the "organizing document." That is the official form or document that created your NGO. It might be a government application, a constitution or other official form. It should be submitted in its original format along with an English translation of the document. Organizations are also asked to provide a document that describes how the organization operates. Here in the United States we refer to them as organizational bylaws. Again, an original copy should be submitted along with a translation if needed.
4. Download Form 8718. The United States charges an administrative fee to process each application. This form certifies the payment of this fee. The 1023, 8718 and the fee payment in U.S. dollars are sent to the address in Covington, Kentucky listed on the Form 8718. For each of these steps, there is help available on the IRS website or by calling the toll-free number listed on each form. For general information, you can call 1-800-876-1715. If they cannot answer your question, they will refer you to the appropriate office. Make sure you tell them if you are a charity located outside of the United States.
