As a potential donor, ensuring that your contributions go to legitimate charities is crucial. One key aspect of this due diligence is verifying a charity's IRS 501(c)(3) status. This status not only confirms that the organization is recognized as a non-profit but also determines if your donations are eligible for tax deductions.
This page will guide you through a straightforward process to confirm a charity’s tax-exempt status using the IRS Tax-Exempt Organization Search (TEOS). By following these steps, you can avoid the pitfalls of donating to organizations that may not be compliant, ensuring your generosity serves its intended purpose.
Step-by-step walkthrough
Access the IRS TEOS
Go to the IRS Tax-Exempt Organization Search page at apps.irs.gov/app/eos. This is the official tool for checking the tax-exempt status of organizations, and it is free to use.
Enter EIN or Organization Name
Input either the Employer Identification Number (EIN) or the name of the organization you wish to verify. This will lead you to information about its tax status.
Check the Status
Once you find the organization, check that the status shows 'Currently Exempt' and the subsection is noted as 501(c)(3). If the status is not clear, be cautious.
Verify with State AG
After confirming the IRS status, check the state Attorney General's charitable registration at your state's website. Each state maintains a registry for charities operating within its jurisdiction.
Save Your Verification
Before finalizing your donation, save a printout or screenshot of both the IRS and state AG verification as part of your donation records for future reference.
Positive signals (green flags)
✓ Currently Exempt Status
A charity with a 'Currently Exempt' status on the IRS TEOS means they are recognized as a legitimate 501(c)(3) organization, eligible for tax-deductible donations.
✓ Positive State Registration
Finding the organization in the state AG’s charitable registration ensures compliance with local laws, confirming they are authorized to solicit donations in your state.
✓ Up-to-Date Form 990
Charities that consistently file Form 990 show a commitment to transparency. Check for the most recent filings to understand their financial health.
✓ Good BBB Ratings
A favorable rating from the Better Business Bureau (BBB) can indicate that the charity meets high standards for accountability and transparency in operations.
Warning signals (red flags)
⚠ Revocation Notice
If the TEOS search indicates that the organization has been revoked, do not donate. Revoked charities can no longer accept tax-deductible donations, which could lead to issues for you during tax filing.
⚠ Inconsistent Information
If the information you find on the IRS TEOS does not match other resources, such as state registration or the charity's own website, proceed with caution and further investigate.
⚠ No State Registration
If the organization is not listed in the state AG's registry, they may not be compliant with state regulations. This is a significant red flag that should be taken seriously.
⚠ Lack of Form 990 Filings
If a charity has not filed Form 990 for three consecutive years, they risk losing their 501(c)(3) status. Ensure the charity maintains transparency by checking their filings.
Tools + resources
- IRS Tax-Exempt Organization Search: apps.irs.gov/app/eos
- Charity Navigator: charitynavigator.org
- ProPublica Nonprofit Explorer: projects.propublica.org/nonprofits
- Better Business Bureau Charity Reviews: bbb.org/charity-reviews
- New Jersey Division of Consumer Affairs: njconsumeraffairs.gov
- Association of Fundraising Professionals: afpglobal.org
New Jersey state-level oversight
In New Jersey, the Division of Consumer Affairs, under the Attorney General's office, oversees charitable organizations. Their website provides a registry for all registered charities in the state. Additionally, local chapters of the Better Business Bureau (BBB) offer charity reviews and ratings to help donors make informed decisions. Organizations like the New Jersey Nonprofit Association provide resources for both charities and donors, ensuring transparency and best practices within the sector.