The IRS 1023 form is essential for organizations seeking recognition as a 501(c)(3) tax-exempt entity by the Internal Revenue Service. It's a detailed document that requires an in-depth understanding of the organization's structure, activities, and financial information. For those ready to take the next step towards obtaining tax-exempt status, start filling out the form by clicking the button below.
The journey to achieving tax-exempt status for a nonprofit organization is both crucial and intricate, involving several essential steps, one of which includes the completion and submission of the IRS 1023 form. This fundamental document serves as the application used by the United States Internal Revenue Service to evaluate and determine if an organization meets the stringent qualifications for exemption under section 501(c)(3). Organizations that aspire to be recognized as exempt from federal income tax must navigate through the comprehensive information required by the form, which includes detailed narratives of their activities, financial statements, governance policies, and future plans. The importance of this form extends beyond its role in securing tax-exempt status; it lays the foundation for the organization's accountability and transparency to both the IRS and the public. Ensuring its accuracy and completeness is paramount, as errors or omissions can result in delays or denials, posing significant setbacks for the organization's mission and financial stability. By meticulously preparing the IRS 1023 form, organizations take a pivotal step towards achieving their goals and advancing their impact on the communities they serve.
Form 1023 is filed electronically only on Pay.gov.
Go to www.irs.gov/form1023 for additional filing information.
Form 1023
(Rev. December 2017)
Department of the Treasury
Internal Revenue Service
Application for Recognition of Exemption
Under Section 501(c)(3) of the Internal Revenue Code
▶Do not enter social security numbers on this form as it may be made public. ▶ Go to www.irs.gov/Form1023 for instructions and the latest information.
OMB No. 1545-0056
Note: If exempt status is approved, this application will be open for public inspection.
Use the instructions to complete this application and for a definition of all bold items. For additional help, call IRS Exempt Organizations Customer Account Services toll-free at 1-877-829-5500. Visit our website at www.irs.gov for forms and publications. If the required information and documents are not submitted with payment of the appropriate user fee, the application may be returned to you.
Attach additional sheets to this application if you need more space to answer fully. Put your name and EIN on each sheet and identify each answer by Part and line number. Complete Parts I – XI of Form 1023 and submit only those Schedules (A through H) that apply to you.
Part I
Identification of Applicant
1
Full name of organization (exactly as it appears in your organizing document)
2
c/o Name (if applicable)
3
Mailing address (Number and street) (see instructions)
Room/Suite
4
Employer Identification Number (EIN)
City or town, state or country, and ZIP + 4
5
Month the annual accounting period ends (01 – 12)
6
Primary contact (officer, director, trustee, or authorized representative)
a Name:
b
Phone:
c
Fax: (optional)
7Are you represented by an authorized representative, such as an attorney or accountant? If “Yes,” provide the authorized representative’s name, and the name and address of the authorized representative’s firm. Include a completed Form 2848, Power of Attorney and Declaration of Representative, with your application if you would like us to communicate with your representative.
Yes
No
8Was a person who is not one of your officers, directors, trustees, employees, or an authorized representative listed in line 7, paid, or promised payment, to help plan, manage, or advise you about the structure or activities of your organization, or about your financial or tax matters? If “Yes,” provide the person’s name, the name and address of the person’s firm, the amounts paid or promised to be paid, and describe that person’s role.
9a Organization’s website:
bOrganization’s email: (optional)
10Certain organizations are not required to file an information return (Form 990 or Form 990-EZ). If you are granted tax-exemption, are you claiming to be excused from filing Form 990 or Form 990-EZ? If “Yes,” explain. See the instructions for a description of organizations not required to file Form 990 or Form 990-EZ.
11
Date incorporated if a corporation, or formed, if other than a corporation.
(MM/DD/YYYY)
/
12
Were you formed under the laws of a foreign country?
If “Yes,” state the country.
For Paperwork Reduction Act Notice, see instructions.
Cat. No. 17133K
Form 1023 (Rev. 12-2017)
Name:
EIN:
Page 2
Part II Organizational Structure
You must be a corporation (including a limited liability company), an unincorporated association, or a trust to be tax exempt.
See instructions. DO NOT file this form unless you can check “Yes” on lines 1, 2, 3, or 4.
Are you a corporation? If “Yes,” attach a copy of your articles of incorporation showing certification of
filing with the appropriate state agency. Include copies of any amendments to your articles and be sure
they also show state filing certification.
Are you a limited liability company (LLC)? If “Yes,” attach a copy of your articles of organization showing
certification of filing with the appropriate state agency. Also, if you adopted an operating agreement, attach
a copy. Include copies of any amendments to your articles and be sure they show state filing certification.
Refer to the instructions for circumstances when an LLC should not file its own exemption application.
Are you an unincorporated association? If “Yes,” attach a copy of your articles of association,
constitution, or other similar organizing document that is dated and includes at least two signatures.
Include signed and dated copies of any amendments.
4a
Are you a trust? If “Yes,” attach a signed and dated copy of your trust agreement. Include signed and
dated copies of any amendments.
Have you been funded? If “No,” explain how you are formed without anything of value placed in trust.
Have you adopted bylaws? If “Yes,” attach a current copy showing date of adoption. If “No,” explain
how your officers, directors, or trustees are selected.
Part III Required Provisions in Your Organizing Document
The following questions are designed to ensure that when you file this application, your organizing document contains the required provisions to meet the organizational test under section 501(c)(3). Unless you can check the boxes in both lines 1 and 2, your organizing document does not meet the organizational test. DO NOT file this application until you have amended your organizing document. Submit your original and amended organizing documents (showing state filing certification if you are a corporation or an LLC) with your application.
1Section 501(c)(3) requires that your organizing document state your exempt purpose(s), such as charitable, religious, educational, and/or scientific purposes. Check the box to confirm that your organizing document meets this requirement. Describe specifically where your organizing document meets this requirement, such as a reference to a particular article or section in your organizing document. Refer to the instructions for exempt purpose language.
Location of Purpose Clause (Page, Article, and Paragraph):
2 a Section 501(c)(3) requires that upon dissolution of your organization, your remaining assets must be used exclusively for exempt purposes, such as charitable, religious, educational, and/or scientific purposes. Check the box on line 2a to confirm that your organizing document meets this requirement by express provision for the distribution of assets upon dissolution. If you rely on state law for your dissolution provision, do not check the box on line 2a and go to line 2c.
bIf you checked the box on line 2a, specify the location of your dissolution clause (Page, Article, and Paragraph). Do not complete line 2c if you checked box 2a.
c See the instructions for information about the operation of state law in your particular state. Check this box if you rely on operation of state law for your dissolution provision and indicate the state:
Part IV
Narrative Description of Your Activities
Using an attachment, describe your past, present, and planned activities in a narrative. If you believe that you have already provided some of this information in response to other parts of this application, you may summarize that information here and refer to the specific parts of the application for supporting details. You may also attach representative copies of newsletters, brochures, or similar documents for supporting details to this narrative. Remember that if this application is approved, it will be open for public inspection. Therefore, your narrative description of activities should be thorough and accurate. Refer to the instructions for information that must be included in your description.
Part V Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors
1a List the names, titles, and mailing addresses of all of your officers, directors, and trustees. For each person listed, state their total annual compensation, or proposed compensation, for all services to the organization, whether as an officer, employee, or other position. Use actual figures, if available. Enter “none” if no compensation is or will be paid. If additional space is needed, attach a separate sheet. Refer to the instructions for information on what to include as compensation.
Name
Title
Mailing address
Compensation amount (annual actual or estimated)
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Part V
Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees,
and Independent Contractors (Continued)
bList the names, titles, and mailing addresses of each of your five highest compensated employees who receive or will receive compensation of more than $50,000 per year. Use the actual figure, if available. Refer to the instructions for information on what to include as compensation. Do not include officers, directors, or trustees listed in line 1a.
cList the names, names of businesses, and mailing addresses of your five highest compensated independent contractors that receive or will receive compensation of more than $50,000 per year. Use the actual figure, if available. Refer to the instructions for information on what to include as compensation.
The following “Yes” or “No” questions relate to past, present, or planned relationships, transactions, or agreements with your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in lines 1a, 1b, and 1c.
2a
Are any of your officers, directors, or trustees related to each other through family or business
relationships? If “Yes,” identify the individuals and explain the relationship.
Do you have a business relationship with any of your officers, directors, or trustees other than through
their position as an officer, director, or trustee? If “Yes,” identify the individuals and describe the business
relationship with each of your officers, directors, or trustees.
Are any of your officers, directors, or trustees related to your highest compensated employees or highest
compensated independent contractors listed on lines 1b or 1c through family or business relationships? If
“Yes,” identify the individuals and explain the relationship.
3 a
For each of your officers, directors, trustees, highest compensated employees, and highest
compensated independent contractors listed on lines 1a, 1b, or 1c, attach a list showing their name,
qualifications, average hours worked, and duties.
Do any of your officers, directors, trustees, highest compensated employees, and highest compensated
independent contractors listed on lines 1a, 1b, or 1c receive compensation from any other organizations,
whether tax exempt or taxable, that are related to you through common control? If “Yes,” identify the
individuals, explain the relationship between you and the other organization, and describe the
compensation arrangement.
4In establishing the compensation for your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed on lines 1a, 1b, and 1c, the following practices are recommended, although they are not required to obtain exemption. Answer “Yes” to all the practices you use.
a
Do you or will the individuals that approve compensation arrangements follow a conflict of interest policy?
Do you or will you approve compensation arrangements in advance of paying compensation?
Do you or will you document in writing the date and terms of approved compensation arrangements?
Page 4
dDo you or will you record in writing the decision made by each individual who decided or voted on compensation arrangements?
eDo you or will you approve compensation arrangements based on information about compensation paid by similarly situated taxable or tax-exempt organizations for similar services, current compensation surveys compiled by independent firms, or actual written offers from similarly situated organizations? Refer to the instructions for Part V, lines 1a, 1b, and 1c, for information on what to include as compensation.
f Do you or will you record in writing both the information on which you relied to base your decision and its
source?
gIf you answered “No” to any item on lines 4a through 4f, describe how you set compensation that is reasonable for your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in Part V, lines 1a, 1b, and 1c.
5a Have you adopted a conflict of interest policy consistent with the sample conflict of interest policy in
Appendix A to the instructions? If “Yes,” provide a copy of the policy and explain how the policy has
been adopted, such as by resolution of your governing board. If “No,” answer lines 5b and 5c.
bWhat procedures will you follow to assure that persons who have a conflict of interest will not have influence over you for setting their own compensation?
cWhat procedures will you follow to assure that persons who have a conflict of interest will not have influence over you regarding business deals with themselves?
Note: A conflict of interest policy is recommended though it is not required to obtain exemption. Hospitals, see Schedule C, Section I, line 14.
6a
Do you or will you compensate any of your officers, directors, trustees, highest compensated employees, and highest
compensated independent contractors listed in lines 1a, 1b, or 1c through non-fixed payments, such as discretionary
bonuses or revenue-based payments? If “Yes,” describe all non-fixed compensation arrangements, including how the
amounts are determined, who is eligible for such arrangements, whether you place a limitation on total compensation,
and how you determine or will determine that you pay no more than reasonable compensation for services. Refer to
the instructions for Part V, lines 1a, 1b, and 1c, for information on what to include as compensation.
Do you or will you compensate any of your employees, other than your officers, directors, trustees, or your
five highest compensated employees who receive or will receive compensation of more than $50,000 per
year, through non-fixed payments, such as discretionary bonuses or revenue-based payments? If “Yes,”
describe all non-fixed compensation arrangements, including how the amounts are or will be determined, who
is or will be eligible for such arrangements, whether you place or will place a limitation on total compensation,
and how you determine or will determine that you pay no more than reasonable compensation for services.
Refer to the instructions for Part V, lines 1a, 1b, and 1c, for information on what to include as compensation.
7a
Do you or will you purchase any goods, services, or assets from any of your officers, directors, trustees, highest
compensated employees, or highest compensated independent contractors listed in lines 1a, 1b, or 1c? If “Yes,”
describe any such purchase that you made or intend to make, from whom you make or will make such purchases, how
the terms are or will be negotiated at arm’s length, and explain how you determine or will determine that you pay no
more than fair market value. Attach copies of any written contracts or other agreements relating to such purchases.
Do you or will you sell any goods, services, or assets to any of your officers, directors, trustees, highest
describe any such sales that you made or intend to make, to whom you make or will make such sales, how the
terms are or will be negotiated at arm’s length, and explain how you determine or will determine you are or will be
paid at least fair market value. Attach copies of any written contracts or other agreements relating to such sales.
8a
Do you or will you have any leases, contracts, loans, or other agreements with your officers, directors,
trustees, highest compensated employees, or highest compensated independent contractors listed in
lines 1a, 1b, or 1c? If “Yes,” provide the information requested in lines 8b through 8f.
bDescribe any written or oral arrangements that you made or intend to make.
cIdentify with whom you have or will have such arrangements.
dExplain how the terms are or will be negotiated at arm’s length.
eExplain how you determine you pay no more than fair market value or you are paid at least fair market value. f Attach copies of any signed leases, contracts, loans, or other agreements relating to such arrangements.
9a Do you or will you have any leases, contracts, loans, or other agreements with any organization in which
any of your officers, directors, or trustees are also officers, directors, or trustees, or in which any individual officer, director, or trustee owns more than a 35% interest? If “Yes,” provide the information requested in lines 9b through 9f.
Page 5
Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees,
Employees, and Independent Contractors (Continued)
bDescribe any written or oral arrangements you made or intend to make.
eExplain how you determine or will determine you pay no more than fair market value or that you are paid at least fair market value.
fAttach a copy of any signed leases, contracts, loans, or other agreements relating to such arrangements.
Part VI
Your Members and Other Individuals and Organizations That Receive Benefits From You
The following “Yes” or “No” questions relate to goods, services, and funds you provide to individuals and organizations as part of your activities. Your answers should pertain to past, present, and planned activities. See instructions.
1 a In carrying out your exempt purposes, do you provide goods, services, or funds to individuals? If “Yes,” describe each program that provides goods, services, or funds to individuals.
bIn carrying out your exempt purposes, do you provide goods, services, or funds to organizations? If “Yes,” describe each program that provides goods, services, or funds to organizations.
Do any of your programs limit the provision of goods, services, or funds to a specific individual or group
of specific individuals? For example, answer “Yes,” if goods, services, or funds are provided only for a
particular individual, your members, individuals who work for a particular employer, or graduates of a
particular school. If “Yes,” explain the limitation and how recipients are selected for each program.
Do any individuals who receive goods, services, or funds through your programs have a family or
business relationship with any officer, director, trustee, or with any of your highest compensated
employees or highest compensated independent contractors listed in Part V, lines 1a, 1b, and 1c? If
“Yes,” explain how these related individuals are eligible for goods, services, or funds.
Part VII
Your History
The following “Yes” or “No” questions relate to your history. See instructions.
Are you a successor to another organization? Answer “Yes,” if you have taken or will take over the
activities of another organization; you took over 25% or more of the fair market value of the net assets of
another organization; or you were established upon the conversion of an organization from for-profit to
nonprofit status. If “Yes,” complete Schedule G.
Are you submitting this application more than 27 months after the end of the month in which you were
legally formed? If “Yes,” complete Schedule E.
Part VIII
Your Specific Activities
The following “Yes” or “No” questions relate to specific activities that you may conduct. Check the appropriate box. Your answers should pertain to past, present, and planned activities. See instructions.
1 Do you support or oppose candidates in political campaigns in any way? If “Yes,” explain.
2 a
Do you attempt to influence legislation? If “Yes,” explain how you attempt to influence legislation and
complete line 2b. If “No,” go to line 3a.
Have you made or are you making an election to have your legislative activities measured by
expenditures by filing Form 5768? If “Yes,” attach a copy of the Form 5768 that was already filed or
attach a completed Form 5768 that you are filing with this application. If “No,” describe whether your
attempts to influence legislation are a substantial part of your activities. Include the time and money
spent on your attempts to influence legislation as compared to your total activities.
3a Do you or will you operate bingo or gaming activities? If “Yes,” describe who conducts them, and list all revenue received or expected to be received and expenses paid or expected to be paid in operating these activities. Revenue and expenses should be provided for the time periods specified in Part IX, Financial Data.
bDo you or will you enter into contracts or other agreements with individuals or organizations to conduct bingo or gaming for you? If “Yes,” describe any written or oral arrangements that you made or intend to make, identify with whom you have or will have such arrangements, explain how the terms are or will be negotiated at arm’s length, and explain how you determine or will determine you pay no more than fair market value or you will be paid at least fair market value. Attach copies or any written contracts or other agreements relating to such arrangements.
cList the states and local jurisdictions, including Indian Reservations, in which you conduct or will conduct gaming or bingo.
Page 6
Your Specific Activities (Continued)
4 a Do
you or will you undertake fundraising? If “Yes,” check all the fundraising programs you do or will
conduct. See instructions.
mail solicitations
phone solicitations
email solicitations
accept donations on your website
personal solicitations
receive donations from another organization’s website
vehicle, boat, plane, or similar donations
government grant solicitations
foundation grant solicitations
Other
Attach a description of each fundraising program.
b Do you or will you have written or oral contracts with any individuals or organizations to raise funds for
you? If “Yes,” describe these activities. Include all revenue and expenses from these activities and state
who conducts them. Revenue and expenses should be provided for the time periods specified in Part IX,
Financial Data. Also, attach a copy of any contracts or agreements.
c Do you or will you engage in fundraising activities for other organizations? If “Yes,” describe these
arrangements. Include a description of the organizations for which you raise funds and attach copies of
all contracts or agreements.
dList all states and local jurisdictions in which you conduct fundraising. For each state or local jurisdiction listed, specify whether you fundraise for your own organization, you fundraise for another organization, or another organization fundraises for you.
e
Do you or will you maintain separate accounts for any contributor under which the contributor has the
right to advise on the use or distribution of funds? Answer “Yes” if the donor may provide advice on the
types of investments, distributions from the types of investments, or the distribution from the donor’s
contribution account. If “Yes,” describe this program, including the type of advice that may be provided
and submit copies of any written materials provided to donors.
Are you affiliated with a governmental unit? If “Yes,” explain.
Do you or will you engage in economic development? If “Yes,” describe your program.
bDescribe in full who benefits from your economic development activities and how the activities promote exempt purposes.
Do or will persons other than your employees or volunteers develop your facilities? If “Yes,” describe
each facility, the role of the developer, and any business or family relationship(s) between the developer
and your officers, directors, or trustees.
Do or will persons other than your employees or volunteers manage your activities or facilities? If “Yes,”
describe each activity and facility, the role of the manager, and any business or family relationship(s)
between the manager and your officers, directors, or trustees.
cIf there is a business or family relationship between any manager or developer and your officers, directors, or trustees, identify the individuals, explain the relationship, describe how contracts are negotiated at arm’s length so that you pay no more than fair market value, and submit a copy of any contracts or other agreements.
8 Do you or will you enter into joint ventures, including partnerships or limited liability companies
treated as partnerships, in which you share profits and losses with partners other than section 501(c)(3)
organizations? If “Yes,” describe the activities of these joint ventures in which you participate.
9a Are you applying for exemption as a childcare organization under section 501(k)? If “Yes,” answer lines 9b through 9d. If “No,” go to line 10.
bDo you provide childcare so that parents or caretakers of children you care for can be gainfully employed (see instructions)? If “No,” explain how you qualify as a childcare organization described in section 501(k).
cOf the children for whom you provide childcare, are 85% or more of them cared for by you to enable their parents or caretakers to be gainfully employed (see instructions)? If “No,” explain how you qualify as a childcare organization described in section 501(k).
dAre your services available to the general public? If “No,” describe the specific group of people for whom your activities are available. Also, see the instructions and explain how you qualify as a childcare organization described in section 501(k).
10 Do you or will you publish, own, or have rights in music, literature, tapes, artworks, choreography,
scientific discoveries, or other intellectual property? If “Yes,” explain. Describe who owns or will own any copyrights, patents, or trademarks, whether fees are or will be charged, how the fees are determined, and how any items are or will be produced, distributed, and marketed.
Page 7
Do you or will you accept contributions of: real property; conservation easements; closely held
securities; intellectual property such as patents, trademarks, and copyrights; works of music or art;
licenses; royalties; automobiles, boats, planes, or other vehicles; or collectibles of any type? If “Yes,”
describe each type of contribution, any conditions imposed by the donor on the contribution, and any
agreements with the donor regarding the contribution.
12 a
Do you or will you operate in a foreign country or countries? If “Yes,” answer lines 12b through 12d. If
“No,” go to line 13a.
Name the foreign countries and regions within the countries in which you operate.
Describe your operations in each country and region in which you operate.
d
Describe how your operations in each country and region further your exempt purposes.
13a
Do you or will you make grants, loans, or other distributions to organization(s)? If “Yes,” answer lines 13b
through 13g. If “No,” go to line 14a.
bDescribe how your grants, loans, or other distributions to organizations further your exempt purposes.
c Do you have written contracts with each of these organizations? If “Yes,” attach a copy of each contract.
dIdentify each recipient organization and any relationship between you and the recipient organization.
eDescribe the records you keep with respect to the grants, loans, or other distributions you make.
fDescribe your selection process, including whether you do any of the following.
(i)
Do you require an application form? If “Yes,” attach a copy of the form.
(ii)
Do you require a grant proposal? If “Yes,” describe whether the grant proposal specifies your
responsibilities and those of the grantee, obligates the grantee to use the grant funds only for the
purposes for which the grant was made, provides for periodic written reports concerning the use of
grant funds, requires a final written report and an accounting of how grant funds were used, and
acknowledges your authority to withhold and/or recover grant funds in case such funds are, or appear
to be, misused.
gDescribe your procedures for oversight of distributions that assure you the resources are used to further your exempt purposes, including whether you require periodic and final reports on the use of resources.
14 a Do you or will you make grants, loans, or other distributions to foreign organizations? If “Yes,” answer lines 14b through 14f. If “No,” go to line 15.
bProvide the name of each foreign organization, the country and regions within a country in which each foreign organization operates, and describe any relationship you have with each foreign organization.
cDoes any foreign organization listed in line 14b accept contributions earmarked for a specific country or specific organization? If “Yes,” list all earmarked organizations or countries.
dDo your contributors know that you have ultimate authority to use contributions made to you at your discretion for purposes consistent with your exempt purposes? If “Yes,” describe how you relay this information to contributors.
eDo you or will you make pre-grant inquiries about the recipient organization? If “Yes,” describe these inquiries, including whether you inquire about the recipient’s financial status, its tax-exempt status under the Internal Revenue Code, its ability to accomplish the purpose for which the resources are provided, and other relevant information.
fDo you or will you use any additional procedures to ensure that your distributions to foreign organizations are used in furtherance of your exempt purposes? If “Yes,” describe these procedures, including site visits by your employees or compliance checks by impartial experts, to verify that grant funds are being used appropriately.
Page 8
15
Do you have a close connection with any organizations? If “Yes,” explain.
16
Are you applying for exemption as a cooperative hospital service organization under section 501(e)? If
“Yes,” explain.
17
Are you applying for exemption as a cooperative service organization of operating educational
organizations under section 501(f)? If “Yes,” explain.
18
Are you applying for exemption as a charitable risk pool under section 501(n)? If “Yes,” explain.
19
Do you or will you operate a school? If “Yes,” complete Schedule B. Answer “Yes,” whether you operate
a school as your main function or as a secondary activity.
20
Is your main function to provide hospital or medical care? If “Yes,” complete Schedule C.
21
Do you or will you provide low-income housing or housing for the elderly or handicapped? If “Yes,”
complete Schedule F.
22
Do you or will you provide scholarships, fellowships, educational loans, or other educational grants to
individuals, including grants for travel, study, or other similar purposes? If “Yes,” complete
Schedule H.
Note: Private foundations may use Schedule H to request advance approval of individual grant procedures.
Page 9
Part IX
Financial Data
For purposes of this schedule, years in existence refer to completed tax years.
1.If in existence less than 5 years, complete the statement for each year in existence and provide projections of your likely revenues and expenses based on a reasonable and good faith estimate of your future finances for a total of:
a.Three years of financial information if you have not completed one tax year, or
b.Four years of financial information if you have completed one tax year. See instructions.
2.If in existence 5 or more years, complete the schedule for the most recent 5 tax years. You will need to provide a separate statement that includes information about the most recent 5 tax years because the data table in Part IX has not been updated to provide for a 5th year. See instructions.
A.Statement of Revenues and Expenses
Revenues
Expenses
Type of revenue or expense
Current tax year
3 prior tax years or 2 succeeding tax years
(a) From
(b) From
(c) From
(d) From
(e) Provide Total for
To
(a) through (d)
1Gifts, grants, and contributions received (do not include unusual grants)
2Membership fees received
3Gross investment income
4Net unrelated business income
5Taxes levied for your benefit
6Value of services or facilities furnished by a governmental unit without charge (not including the value of services generally furnished to the public without charge)
7Any revenue not otherwise listed above or in lines 9–12 below (attach an itemized list)
8Total of lines 1 through 7
9Gross receipts from admissions, merchandise sold or services performed, or furnishing of facilities in any activity that is related to your exempt purposes (attach itemized list)
10Total of lines 8 and 9
11Net gain or loss on sale of capital assets (attach schedule and see instructions)
12Unusual grants
13Total Revenue
Add lines 10 through 12
14 Fundraising expenses
15Contributions, gifts, grants, and similar amounts paid out (attach an itemized list)
16Disbursements to or for the benefit of members (attach an itemized list)
17Compensation of officers, directors, and trustees
18 Other salaries and wages
19 Interest expense
20 Occupancy (rent, utilities, etc.)
21 Depreciation and depletion
22 Professional fees
23Any expense not otherwise classified, such as program services (attach itemized list)
24Total Expenses
Add lines 14 through 23
Page 10
Financial Data (Continued)
B. Balance Sheet (for your most recently completed tax year)
Year End:
Assets
(Whole dollars)
Cash
Accounts receivable, net
Inventories
Bonds and notes receivable (attach an itemized list)
Corporate stocks (attach an itemized list)
Loans receivable (attach an itemized list)
7
Other investments (attach an itemized list)
8
Depreciable and depletable assets (attach an itemized list)
9
Land
10
Other assets (attach an itemized list)
Total Assets (add lines 1 through 10)
Liabilities
Accounts payable
13
Contributions, gifts, grants, etc. payable
14
Mortgages and notes payable (attach an itemized list)
Other liabilities (attach an itemized list)
Total Liabilities (add lines 12 through 15)
Fund Balances or Net Assets
Total fund balances or net assets
Total Liabilities and Fund Balances or Net Assets (add lines 16 and 17)
Have there been any substantial changes in your assets or liabilities since the end of the period
shown above? If “Yes,” explain.
Part X Public Charity Status
Part X is designed to classify you as an organization that is either a private foundation or a public charity. Public charity status is a more favorable tax status than private foundation status. If you are a private foundation, Part X is designed to further determine whether you are a private operating foundation. See instructions.
1 a
Are you a private foundation? If “Yes,” go to line 1b. If “No,” go to line 5 and proceed as instructed. If you
are unsure, see the instructions.
As a private foundation, section 508(e) requires special provisions in your organizing document in
addition to those that apply to all organizations described in section 501(c)(3). Check the box to confirm
that your organizing document meets this requirement, whether by express provision or by reliance on
operation of state law. Attach a statement that describes specifically where your organizing document
meets this requirement, such as a reference to a particular article or section in your organizing document
or by operation of state law. See the instructions, including Appendix B, for information about the special
provisions that need to be contained in your organizing document. Go to line 2.
Are you a private operating foundation? To be a private operating foundation you must engage directly in
the active conduct of charitable, religious, educational, and similar activities, as opposed to indirectly
carrying out these activities by providing grants to individuals or other organizations. If “Yes,” go to line 3.
If “No,” go to the signature section of Part XI.
Have you existed for one or more years? If “Yes,” attach financial information showing that you are a
private operating foundation; go to the signature section of Part XI. If “No,” continue to line 4.
Have you attached either (1) an affidavit or opinion of counsel, (including a written affidavit or opinion
from a certified public accountant or accounting firm with expertise regarding this tax law matter), that
sets forth facts concerning your operations and support to demonstrate that you are likely to satisfy the
requirements to be classified as a private operating foundation; or (2) a statement describing your
proposed operations as a private operating foundation?
5If you answered “No” to line 1a, indicate the type of public charity status you are requesting by checking one of the choices below. You may check only one box.
The organization is not a private foundation because it is:
a 509(a)(1) and 170(b)(1)(A)(i)—a church or a convention or association of churches. Complete and attach Schedule A. b 509(a)(1) and 170(b)(1)(A)(ii)—a school. Complete and attach Schedule B.
c509(a)(1) and 170(b)(1)(A)(iii)—a hospital, a cooperative hospital service organization, or a medical research organization operated in conjunction with a hospital. Complete and attach Schedule C.
d 509(a)(3)—an organization supporting either one or more organizations described in line 5a through c, f, h, or i or a publicly supported section 501(c)(4), (5), or (6) organization. Complete and attach Schedule D.
Filling out the IRS Form 1023 is a crucial step for organizations seeking recognition as a 501(c)(3) tax-exempt entity. This form can seem daunting due to its comprehensive nature and the detail it requires. However, completing it accurately is essential for establishing your organization’s tax-exempt status, which can provide significant financial benefits, including eligibility to receive tax-deductible charitable contributions and exemption from certain federal income taxes. Below is a step-by-step guide to aid in the process, ensuring you provide all the necessary information to the IRS.
Once the IRS receives your Form 1023, they will review your application for tax-exempt status. This process can take several months, so patience is crucial. During this time, the IRS may contact you for additional information or clarification. Respond promptly to any requests from the IRS to avoid unnecessary delays. Upon approval, your organization will receive a determination letter from the IRS, confirming your tax-exempt status under section 501(c)(3). This letter is important for your records and for providing proof of your status to donors and other stakeholders.
What is the IRS Form 1023, and who needs to file it?
IRS Form 1023 is a form that organizations use to apply for recognition of exemption under Section 501(c)(3) of the Internal Revenue Code. This form is necessary for charitable organizations that wish to receive tax-exempt status, allowing them to be exempt from federal income tax on certain types of income and potentially qualify for various grants and other benefits. Specifically, this applies to nonprofit organizations, including charities, religious, educational, scientific, and literary institutions, among others, that seek to operate without the primary goal of generating profits.
How long does it take to process Form 1023?
The processing time for Form 1023 can vary significantly, depending on the complexity of the organization's application and the current backlog at the IRS. Typically, it can take anywhere from 3 to 6 months for the IRS to process Form 1023 applications. However, in some cases, it may take longer, especially if the IRS has questions or requires additional information. Organizations can opt for the Form 1023-EZ, a simplified version of the application, for a quicker process if they meet the eligibility requirements.
What are the eligibility requirements for filing Form 1023?
To be eligible to file Form 1023, an organization must be organized as a corporation, an unincorporated association, or a trust, and its purpose must strictly comply with the requirements outlined for 501(c)(3) organizations. This includes being operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals. Additionally, the organization must not benefit any private shareholder or individual, and it must not be an action organization, meaning it cannot attempt to influence legislation as a substantial part of its activities or participate in any campaign activity for or against political candidates.
Are there any fees associated with filing Form 1023?
Yes, there are fees required when submitting Form 1023 to the IRS. As of the last update, the standard filing fee for Form 1023 is $600. This fee applies to the full version of the form. For organizations eligible to file Form 1023-EZ, the shorter, streamlined version of the application, a lower fee of $275 is required. It is essential for organizations to check the latest fee structure on the IRS website or consult with a tax professional, as these fees are subject to change.
Can an organization start operating as a nonprofit before the IRS approves its Form 1023 application?
Yes, an organization can begin operating as a nonprofit before receiving IRS approval of its Form 1023 application. However, there are certain risks and limitations associated with this. For instance, while the organization can start its operations and accept donations, its tax-exempt status is not guaranteed until the application is approved. If the application is approved, the organization’s tax-exempt status is retroactive to the date of its formation. Nevertheless, there is no assurance the application will be approved. For this reason, organizations should take careful consideration and possibly seek legal guidance when operating and accepting donations prior to receiving IRS approval. It’s also crucial for such organizations to inform donors that their contribution may not be tax-deductible until the exemption status is granted.
When people fill out the IRS 1023 form, aiming to secure nonprofit status for their organizations, several common mistakes often surface. Avoiding these errors can smooth the path toward achieving tax-exempt status, ensuring your organization is on solid footing to pursue its mission.
Not providing sufficient detail about the organization's activities: Applicants should clearly describe how their organization's activities support its exempt purposes. Vague or incomplete descriptions may delay the approval process.
Forgetting to attach necessary schedules: Depending on the organization's structure and activities, additional schedules might be required. Overlooking these can result in an incomplete application, stalling the review process.
Incorrect financial data reporting: It's crucial to present accurate and detailed financial records for the past, present, and projected future. Errors or unrealistic financials can raise red flags with the IRS.
Failing to properly document the nondiscrimination policy: Organizations that provide educational programs must include a nondiscrimination policy in their application. Lack of this documentation can be a significant oversight.
Overlooking the requirement for a conflict of interest policy: A formal conflict of interest policy is mandatory. Failure to adopt and mention this policy in the application can hinder the approval of your tax-exempt status.
Avoiding these mistakes not only accelerates the application process but also aligns your organization with the IRS's compliance expectations. Paying close attention to detail and ensuring completeness can pave the way for a smoother path to achieving your nonprofit goals.
When an organization decides to apply for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, the IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, is a critical document. However, completing Form 1023 is seldom a solitary task. It often requires the preparation and submission of several additional documents and forms to substantiate the application, clarify the organization's status, and comply with federal requirements. These associated documents play a substantial role in illustrating the organization's eligibility for tax-exempt status, detailing its governance structure, financial projections, and operational procedures.
Together, these forms and documents complete the picture of an organization's mission, structure, and compliance with the legal requirements for tax-exempt status. It’s important for organizations to understand the role of each document in the application process and to approach them with the thoroughness and precision they demand. Having all the necessary documents prepared and properly filled out can streamline the application process, helping to avoid delays and increase the chances of a favorable outcome.
The IRS Form 1023-EZ is a streamlined version of the IRS Form 1023. It is used by smaller organizations seeking tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. It requires less information and documentation than the full Form 1023, making it quicker and easier for small nonprofits to complete.
IRS Form 990 is another similar document, which is used by tax-exempt organizations to provide the IRS with annual financial information. While the IRS Form 1023 is for applying for tax-exempt status, Form 990 is for maintaining it by reporting income, expenditures, and adherence to tax-exempt purposes.
The IRS Form 8868 is used to request an extension of time to file an exempt organization return, including Form 990. This form is similar to the IRS 1023 in the sense that it directly affects the reporting and management of tax-exempt organizations.
IRS Form 8940 is used by tax-exempt organizations to request specific rulings or determinations from the IRS regarding their tax-exempt status. It can involve changes in operation, structure, or activities. Although it serves a different function, it is still closely related to the process of maintaining or altering the status initially granted through IRS Form 1023 filings.
The IRS Form SS-4, Application for Employer Identification Number (EIN), is often completed in conjunction with the IRS Form 1023. Every organization needs an EIN to operate and to file its tax forms, including the 1023 form for applying for tax-exempt status.
IRS Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation, is applicable to organizations that have received their 501(c)(3) tax-exempt status through Form 1023. This form allows or revokes an organization’s consent to engage in lobbying activities, indicating the intertwined regulatory processes for tax-exempt entities.
Filling out the IRS 1023 form can be a rigorous process, but it's key to secure tax-exempt status for your non-profit organization. By following certain best practices, you can avoid common pitfalls that might delay or derail your application. Here are 10 tips to help guide you through the process:
While the process of filling out the IRS 1023 form can be daunting, taking a careful and informed approach will increase your chances of a successful application. Remember, obtaining tax-exempt status is a significant milestone for your organization, enabling you to focus more on your mission and less on tax liabilities.
Understanding the IRS 1023 form is crucial for nonprofit organizations seeking tax-exempt status. However, several misconceptions can lead to confusion and errors during the application process. Here are eight common misunderstandings:
It's only for 501(c)(3) organizations. While it's true that the IRS 1023 form is primarily associated with 501(c)(3) entities, it's actually applicable to organizations seeking exemption under various subsections of 501(c). It's essential to determine your organization's eligibility before applying.
Filing is mandatory for all charities. While most charitable organizations must file the 1023 form to receive tax-exempt status, there are exceptions. For example, churches and their integrated auxiliaries may not be required to file.
There's only one version of the form. The IRS provides two versions: the standard Form 1023 and the Form 1023-EZ, a streamlined version for smaller organizations. Choosing the correct form depends on your organization's size and financial situation.
The process is quick. The review process can be lengthy, taking several months or even longer. Adequate preparation and complete submissions can help expedite the process, but patience is necessary.
Approval is guaranteed. Submitting the 1023 form does not ensure approval. The IRS rigorously reviews each application to ensure compliance with federal requirements. Organizations must meet all criteria for tax-exempt status.
Once approved, the status is permanent. Maintaining tax-exempt status requires ongoing compliance with IRS regulations, including annual filings and restrictions on political activities. Organizations may lose their status if they fail to adhere to these regulations.
There's no need for financial data if newly established. Even newly formed organizations must provide projected financial statements for the next two years. This information is crucial for the IRS to evaluate the organization's compliance with tax-exempt purposes.
Legal advice is not necessary. While it's possible to complete the Form 1023 independently, seeking legal advice or consulting with a professional experienced in tax law and nonprofit management is advisable. This can prevent errors and improve the chances of approval.
Dispelling these misconceptions can smooth the path to obtaining and maintaining tax-exempt status for nonprofit organizations. Being well-informed and prepared is key to a successful application process.
The IRS 1023 form is critical for organizations seeking recognition as a tax-exempt entity under Section 501(c)(3) of the Internal Revenue Code. Understanding the form's requirements can streamline the application process and improve the chances of approval. Here are seven key takeaways:
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