Nonprofit Tax Exemption Process - New South Memphis

Taxation and Finance Tennessee 3 Minutes Read ยท published February 08, 2026 Flag of Tennessee

Nonprofit organizations serving New South Memphis, Tennessee must comply with federal, state, and local rules to secure and keep tax-exempt status. This guide explains the typical steps: obtain federal recognition under section 501(c)(3), register with the Tennessee Department of Revenue for state exemptions, and apply for any local property or business-license exemptions with city or county offices. Read each section for practical action steps, required records, and where to get official forms from federal and state authorities.

Start federal and state registration early to avoid delays.

What municipal rules apply

New South Memphis falls under the City of Memphis and Shelby County jurisdictions for local property, business-license, and local sales/use issues. Municipal exemptions and eligibility criteria are administered locally, while recognition as a tax-exempt organization is federal. For federal recognition, apply to the IRS for 501(c)(3) status via the standard Form 1023 or Form 1023-EZ as described by the IRS application guidance[1]. For state-level sales and related exemptions, register with the Tennessee Department of Revenue and follow its exempt organizations guidance exempt organizations page[2].

Penalties & Enforcement

Enforcement may involve revocation of exemption, assessment of back taxes, interest, and potential civil penalties for misrepresentation. Specific municipal fine amounts and escalation rules are not specified on the cited pages; consult local assessor or city finance offices for exact figures and procedures.

Failure to disclose unrelated business income can lead to revocation or back tax assessments.
  • Monetary penalties: not specified on the cited pages.
  • Escalation: municipal practice varies; first, repeat, and continuing offence procedures are determined by local ordinance or county assessor policy.
  • Non-monetary sanctions: possible revocation of exemption, requirement to pay back taxes, and administrative orders.
  • Enforcer and complaints: local assessor, city finance, or licensing office handles investigations; appeals typically go to local appeal boards or state administrative review.

Applications & Forms

Federal recognition requires IRS Form 1023 or 1023-EZ and accompanying documentation; fees and exact submission instructions are provided on the IRS site cited above. State registration for Tennessee exemptions uses guidance and forms published by the Tennessee Department of Revenue; check their exempt organizations pages for submission steps and any required state forms. For local property or business-license exemption forms, contact the City of Memphis or Shelby County offices directly as local forms are issued by those offices.

Local exemption forms are issued by city or county offices, not by the IRS.

How to maintain compliance

Maintain detailed records of activities, finances, and board minutes; file required federal and state returns; and respond promptly to any local information requests. Common compliance items include annual IRS filings (Form 990 series), state tax filings where required, and local license renewals.

  • Recordkeeping: keep accurate books and minutes for audits and periodic reviews.
  • Deadlines: file federal and state returns on schedule; local renewal dates vary by office.
  • Forms: retain copies of exemption determinations and local application receipts.

FAQ

What federal status do I need to be tax-exempt?
You generally need recognition under IRS section 501(c)(3) or another appropriate 501(c) classification; follow IRS application guidance linked above.
Do I automatically get local property tax exemption after IRS approval?
No; local property tax exemption is a separate application with the city or county assessor and is not automatic after federal recognition.
Who enforces local compliance and how do I appeal?
Local assessors or city finance departments enforce exemptions; appeal routes are set by local ordinance or administrative procedures and may include local boards and state review.

How-To

  1. Confirm charitable purpose and collect governing documents, bylaws, and financial statements.
  2. Apply to the IRS for 501(c)(3) recognition using Form 1023 or 1023-EZ per the IRS guidance application guidance[1].
  3. Register with the Tennessee Department of Revenue for any state exemption and obtain required state certificates following the department guidance exempt organizations[2].
  4. Apply to the City of Memphis or Shelby County for local property or business-license exemptions, submitting documentation and local application forms as required.
  5. Maintain annual filings and records; respond to any audits or information requests promptly.

Key Takeaways

  • Federal 501(c)(3) recognition and state/local exemptions are separate processes.
  • Keep detailed records and meet federal, state, and local filing deadlines.

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