Contents
The IRS 1023 form is a crucial document for organizations seeking tax-exempt status under section 501(c)(3) of the Internal Revenue Code. This form allows nonprofits to apply for recognition as a charitable organization, which can open doors to various funding opportunities and grant eligibility. When completing the form, applicants must provide detailed information about their mission, activities, governance structure, and financial projections. Additionally, the IRS requires a thorough description of the organization's programs and how they align with its charitable purpose. The application process can be complex, often necessitating careful attention to detail to avoid delays or denials. Understanding the requirements and implications of the IRS 1023 form is essential for any nonprofit aiming to operate legally and effectively in the charitable sector.
Preview - IRS 1023 Form
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)
7
Are 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
8
Was 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.
Yes No
9a Organization’s website:
b
Organization’s email: (optional)
10 Certain 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.
Yes No
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? Yes No
If “Yes,” state the country.
For Paperwork Reduction Act Notice, see instructions.
Cat. No. 17133K
Form 1023 (Rev. 12-2017)
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.
1
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.
Yes No
2
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.
Yes No
3
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.
Yes No
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.
Yes No
b
Have you been funded? If “No,” explain how you are formed without anything of value placed in trust.
Yes No
5
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.
Yes No
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.
1
Section 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.
b If 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)
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 3
Part V
Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees,
and Independent Contractors (Continued)
b
List 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.
Name Title Mailing address
Compensation amount
(annual actual or estimated)
c
List 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.
Name Title Mailing address
Compensation amount
(annual actual or estimated)
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.
Yes No
b
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.
Yes No
c
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.
Yes No
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.
b
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.
Yes No
4
In 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?
Yes No
b Do you or will you approve compensation arrangements in advance of paying compensation?
Yes No
c Do you or will you document in writing the date and terms of approved compensation arrangements?
Yes No
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 4
Part V
Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees,
and Independent Contractors (Continued)
d
Do you or will you record in writing the decision made by each individual who decided or voted on
compensation arrangements?
Yes No
e
Do 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.
Yes No
f
Do you or will you record in writing both the information on which you relied to base your decision and its
source?
Yes No
g
If 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.
Yes No
b
What 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?
c
What 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.
Yes No
b
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.
Yes No
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.
Yes No
b
Do you or will you sell any goods, services, or assets to 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 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.
Yes No
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.
Yes No
b Describe any written or oral arrangements that you made or intend to make.
c Identify with whom you have or will have such arrangements.
d Explain how the terms are or will be negotiated at arm’s length.
e
Explain 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.
Yes No
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 5
Part V
Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees,
Employees, and Independent Contractors (Continued)
b Describe any written or oral arrangements you made or intend to make.
c Identify with whom you have or will have such arrangements.
d Explain how the terms are or will be negotiated at arm’s length.
e
Explain how you determine or will determine you pay no more than fair market value or that you are paid
at least fair market value.
f Attach 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.
Yes No
b
In 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.
Yes No
2 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.
Yes No
3 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.
Yes No
Part VII Your History
The following “Yes” or “No” questions relate to your history. See instructions.
1 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.
Yes No
2
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.
Yes No
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.
Yes No
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.
Yes No
b
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.
Yes No
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.
Yes No
b
Do 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.
Yes No
c
List the states and local jurisdictions, including Indian Reservations, in which you conduct or will conduct
gaming or bingo.
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 6
Part VIII 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.
Yes No
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.
Yes No
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.
Yes No
d
List 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.
Yes No
5
Are you affiliated with a governmental unit? If “Yes,” explain.
Yes No
6a Do you or will you engage in economic development? If “Yes,” describe your program. Yes No
b
Describe in full who benefits from your economic development activities and how the activities promote
exempt purposes.
7a
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.
Yes No
b
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.
Yes No
c
If 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.
Yes No
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.
Yes No
b
Do 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).
Yes No
c
Of 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).
Yes No
d
Are 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).
Yes No
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.
Yes No
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 7
Part VIII Your Specific Activities (Continued)
11
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.
Yes No
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.
Yes No
b
Name the foreign countries and regions within the countries in which you operate.
c 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.
Yes No
b Describe 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. Yes No
d Identify each recipient organization and any relationship between you and the recipient organization.
e Describe the records you keep with respect to the grants, loans, or other distributions you make.
f Describe 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.
Yes No
(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.
Yes No
g
Describe 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.
Yes No
b
Provide 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.
c
Does 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.
Yes No
d
Do 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.
Yes No
e Do 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.
Yes No
f
Do 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.
Yes No
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 8
Part VIII Your Specific Activities (Continued)
15 Do you have a close connection with any organizations? If “Yes,” explain.
Yes No
16
Are you applying for exemption as a cooperative hospital service organization under section 501(e)? If
“Yes,” explain.
Yes No
17
Are you applying for exemption as a cooperative service organization of operating educational
organizations under section 501(f)? If “Yes,” explain.
Yes No
18 Are you applying for exemption as a charitable risk pool under section 501(n)? If “Yes,” explain.
Yes No
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.
Yes No
20 Is your main function to provide hospital or medical care? If “Yes,” complete Schedule C.
Yes No
21
Do you or will you provide low-income housing or housing for the elderly or handicapped? If “Yes,”
complete Schedule F.
Yes No
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.
Yes No
Note: Private foundations may use Schedule H to request advance approval of individual grant
procedures.
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
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
Type of revenue or expense
Current tax year
(a) From
To
3 prior tax years or 2 succeeding tax years
(b) From
To
(c) From
To
(d) From
To
(e) Provide Total for
(a) through (d)
1 Gifts, grants, and
contributions received (do not
include unusual grants)
2 Membership fees received
3 Gross investment income
4
Net unrelated business
income
5 Taxes levied for your benefit
6
Value of services or facilities
furnished by a governmental unit
without charge (not including the
value of services generally furnished
to the public without charge)
7 Any revenue not otherwise listed
above or in lines 9–12 below
(attach an itemized list)
8 Total of lines 1 through 7
9
Gross 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)
10 Total of lines 8 and 9
11 Net gain or loss on sale of
capital assets (attach
schedule and see instructions)
12 Unusual grants
13
Total Revenue
Add lines 10 through 12
Revenues Expenses
14 Fundraising expenses
15 Contributions, gifts, grants,
and similar amounts paid out
(attach an itemized list)
16 Disbursements to or for the
benefit of members (attach an
itemized list)
17
Compensation 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
23
Any expense not otherwise
classified, such as program
services (attach itemized list)
24
Total Expenses
Add lines 14 through 23
Form 1023 (Rev. 12-2017)
Form 1023 (Rev. 12-2017)
Name: EIN:
Page 10
Part IX Financial Data (Continued)
B. Balance Sheet (for your most recently completed tax year)
Year End:
Assets
1 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
(Whole dollars)
2 Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . .
2
3 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Bonds and notes receivable (attach an itemized list) . . . . . . . . . . . . . . . . . 4
5 Corporate stocks (attach an itemized list) . . . . . . . . . . . . . . . . . . . . 5
6 Loans receivable (attach an itemized list) . . . . . . . . . . . . . . . . . . . . 6
7 Other investments (attach an itemized list) . . . . . . . . . . . . . . . . . . . . 7
8 Depreciable and depletable assets (attach an itemized list) . . . . . . . . . . . . . . 8
9 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10 Other assets (attach an itemized list) . . . . . . . . . . . . . . . . . . . . . . 10
11 Total Assets (add lines 1 through 10) . . . . . . . . . . . . . . . . . . . . . . 11
Liabilities
12 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
13 Contributions, gifts, grants, etc. payable . . . . . . . . . . . . . . . . . . . . 13
14 Mortgages and notes payable (attach an itemized list) . . . . . . . . . . . . . . . . 14
15 Other liabilities (attach an itemized list) . . . . . . . . . . . . . . . . . . . . . 15
16 Total Liabilities (add lines 12 through 15) . . . . . . . . . . . . . . . . . . . . 16
Fund Balances or Net Assets
17 Total fund balances or net assets . . . . . . . . . . . . . . . . . . . . . . .
17
18 Total Liabilities and Fund Balances or Net Assets (add lines 16 and 17) . . . . . . . . . . 18
19
Have there been any substantial changes in your assets or liabilities since the end of the period
shown above? If “Yes,” explain.
Yes No
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.
Yes No
b
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.
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.
Yes No
3
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.
Yes No
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?
Yes No
5
If 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.
c
509(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.
Form 1023 (Rev. 12-2017)
Document Specifics
| Fact Name | Description |
|---|---|
| Purpose | The IRS Form 1023 is used to apply for recognition of exemption from federal income tax under Section 501(c)(3) of the Internal Revenue Code. |
| Eligibility | Organizations must be organized and operated exclusively for charitable, educational, religious, or scientific purposes to qualify. |
| Filing Fee | A filing fee is required, which varies depending on the size of the organization’s gross receipts. |
| State-Specific Forms | Some states require additional forms for charitable organizations. For example, California requires Form CT-1 under California Revenue and Taxation Code Section 23701d. |
| Submission Method | Form 1023 can be submitted electronically through the IRS website or mailed directly to the appropriate IRS office. |
| Processing Time | Processing times can vary, but organizations should expect a wait of 3 to 6 months before receiving a determination letter from the IRS. |
IRS 1023: Usage Instruction
Filling out the IRS Form 1023 can be a crucial step in establishing your organization as a tax-exempt entity. Completing this form accurately is essential to ensure that your application is processed smoothly. Below are the steps to guide you through the process of filling out the form.
- Gather necessary information about your organization, including its legal name, address, and the purpose of your organization.
- Determine your organization’s structure, such as whether it is a corporation, unincorporated association, or trust.
- Review the eligibility requirements for tax-exempt status to confirm that your organization qualifies.
- Begin filling out Part I of Form 1023, which includes basic information about your organization.
- Complete Part II, detailing your organization’s structure, governance, and financial information.
- Provide a thorough description of your organization’s activities in Part III, including programs and services offered.
- Fill out Part IV, which requires information about your organization’s financial history and projections.
- Complete Part V, which asks for information regarding your organization’s members, directors, and officers.
- In Part VI, disclose any relationships with other organizations, including any affiliated entities.
- Provide any additional documentation required, such as your organization’s bylaws, articles of incorporation, and financial statements.
- Review the entire form for accuracy and completeness before submission.
- Sign and date the form, ensuring that the signature is from an authorized individual within the organization.
- Submit the completed form along with the appropriate filing fee to the IRS.
Learn More on IRS 1023
What is the IRS Form 1023?
The IRS Form 1023 is an application for recognition of exemption under Section 501(c)(3) of the Internal Revenue Code. This form is essential for organizations seeking tax-exempt status as charitable organizations. By filing this form, you are requesting the IRS to recognize your organization as tax-exempt, which can provide significant benefits, including exemption from federal income tax and eligibility to receive tax-deductible contributions.
Who needs to file Form 1023?
Any organization that wishes to operate as a tax-exempt charity under Section 501(c)(3) must file Form 1023. This includes:
- Nonprofit organizations
- Foundations
- Religious organizations
If your organization is planning to engage in charitable activities and receive donations, filing Form 1023 is a critical step in establishing your tax-exempt status.
What information is required on Form 1023?
Form 1023 requires detailed information about your organization, including:
- Your organization’s structure and governance.
- A description of your organization’s activities.
- Financial data, including projected budgets for the next few years.
- Details on your organization’s mission and purpose.
Providing complete and accurate information is crucial, as the IRS uses this data to evaluate your eligibility for tax-exempt status.
How long does it take to process Form 1023?
The processing time for Form 1023 can vary. Generally, it takes about 3 to 6 months for the IRS to review your application. However, delays can occur, especially if the application is incomplete or requires additional information. To avoid delays, ensure that all required documents are included and that your application is filled out thoroughly.
What happens after Form 1023 is approved?
Once the IRS approves your Form 1023, your organization will receive a determination letter confirming your tax-exempt status. This letter is important, as it allows you to:
- Receive tax-deductible donations.
- Apply for grants from foundations and government entities.
- Enjoy exemption from federal income tax.
Keep this letter on file, as it may be required for various purposes, including compliance and fundraising efforts.
Common mistakes
Filling out the IRS Form 1023, which is essential for obtaining tax-exempt status, can be a complex process. Many applicants make common mistakes that can delay approval or lead to outright rejection. Understanding these pitfalls is crucial for a smooth application process.
One frequent mistake is providing insufficient detail about the organization’s activities. The IRS requires a comprehensive description of the planned activities. When applicants fail to elaborate on their programs, they risk being denied. Clear and thorough explanations can help demonstrate the organization’s purpose and activities.
Another common error involves neglecting to include the required financial information. Applicants often overlook the necessity of submitting a detailed budget and financial projections for the next three years. This information helps the IRS assess the organization’s viability and sustainability. Without it, the application may be deemed incomplete.
Many people also mistakenly underestimate the importance of the organizational structure. Failing to provide a clear description of the governing body, such as the board of directors, can lead to questions about accountability and oversight. The IRS wants to see a well-defined structure that supports the organization’s mission.
Inaccurate or inconsistent information can create significant problems. Some applicants may inadvertently provide conflicting details about their mission or activities in different sections of the form. This inconsistency can confuse the IRS and result in delays or rejection. It’s essential to ensure that all information aligns and supports the overall narrative.
Another mistake is not addressing the public support test. Organizations must demonstrate that they receive a substantial part of their support from the public. Failing to provide adequate evidence of public support can lead to disqualification. Clear documentation of funding sources is vital to meet this requirement.
Many applicants also overlook the importance of properly completing the signature section. The form must be signed by an authorized individual. If the signature is missing or provided by someone without authority, the application may be rejected. Ensuring that the right person signs the form is a critical step.
Applicants sometimes fail to follow the instructions for submitting the form. The IRS has specific guidelines regarding submission methods and required attachments. Ignoring these instructions can lead to delays or complications. Following the guidelines carefully can prevent unnecessary issues.
Some organizations mistakenly believe that they can submit the form without reviewing it thoroughly. Errors in spelling, grammar, or numerical calculations can undermine the professionalism of the application. A careful review can catch these mistakes and enhance the overall quality of the submission.
Lastly, many applicants underestimate the importance of seeking professional assistance. Navigating the complexities of IRS Form 1023 can be challenging. Consulting with a legal or tax professional can provide valuable insights and help avoid common pitfalls. Taking this step can significantly improve the chances of a successful application.
Documents used along the form
When applying for tax-exempt status using the IRS Form 1023, several other documents may be required to support your application. These documents provide additional information about your organization and its activities. Below is a list of common forms and documents that are often submitted alongside the IRS Form 1023.
- Organizational Documents: This includes your articles of incorporation or organization. These documents outline your nonprofit's purpose, structure, and governance.
- Bylaws: Bylaws detail how your organization will operate. They include information on board member roles, meeting procedures, and decision-making processes.
- Financial Statements: Provide a detailed budget and any financial statements, such as balance sheets or income statements. These documents demonstrate your organization's financial health and projected revenue.
- Conflict of Interest Policy: This policy outlines how your organization will handle potential conflicts among board members and staff. It helps ensure transparency and accountability.
- IRS Form 1023 Schedule: If applicable, this schedule includes additional information specific to your organization’s activities or structure that is not covered in the main Form 1023.
Gathering these documents can streamline the application process and improve the chances of obtaining tax-exempt status. Ensure that all information is accurate and complete before submission.
Similar forms
The IRS Form 990 is similar to the IRS Form 1023 in that both are essential for tax-exempt organizations. While Form 1023 is used to apply for tax-exempt status, Form 990 serves as an annual information return that organizations must file to maintain that status. This document provides a comprehensive overview of the organization's activities, finances, and governance. It ensures transparency and accountability, allowing the IRS and the public to assess how well the organization is adhering to its mission and utilizing its resources.
Another document that shares similarities with Form 1023 is the IRS Form 501(c)(3) determination letter. This letter is issued by the IRS once an organization successfully completes Form 1023 and is granted tax-exempt status. It serves as official recognition of the organization’s non-profit status under section 501(c)(3) of the Internal Revenue Code. This document is critical for organizations as it allows them to receive tax-deductible contributions and confirms their eligibility for various grants and funding opportunities.
The IRS Form 1024 is another relevant document, as it is used by organizations seeking recognition as a tax-exempt entity under sections other than 501(c)(3). While Form 1023 is specifically for charitable organizations, Form 1024 caters to a broader range of non-profit types, such as social welfare organizations or labor unions. Both forms require detailed information about the organization's structure, purpose, and financial activities, ensuring that the IRS can evaluate their eligibility for tax-exempt status.
Form 1023 is also akin to the IRS Form 990-EZ, which is a shorter version of the Form 990. Smaller tax-exempt organizations with gross receipts under a certain threshold can use this simplified form to report their financial activities. Like Form 990, it helps maintain transparency and provides essential information about the organization’s operations. Both forms are vital for compliance, but Form 990-EZ is designed to ease the reporting burden on smaller entities.
Lastly, the IRS Form 8868 is comparable to Form 1023 in that it allows organizations to apply for an extension of time to file their annual returns, including Form 990 or Form 990-EZ. While Form 1023 initiates the process of obtaining tax-exempt status, Form 8868 ensures that organizations remain compliant with filing requirements. This document is crucial for organizations that may need additional time to gather necessary financial information, thus helping them avoid penalties for late submissions.
Dos and Don'ts
Filling out the IRS Form 1023 can be a daunting task, but following these guidelines can help streamline the process. Here’s a list of things you should and shouldn’t do when completing this important form.
- Do gather all necessary documentation before starting.
- Don’t rush through the application; take your time to ensure accuracy.
- Do provide detailed descriptions of your organization’s activities.
- Don’t use vague language; clarity is key to a successful application.
- Do include a thorough budget and financial projections.
- Don’t overlook the importance of your mission statement; it should reflect your purpose.
- Do review the instructions carefully before submitting.
- Don’t forget to sign and date the form.
- Do seek assistance if you encounter challenges; professional help can be invaluable.
By adhering to these guidelines, you can enhance your chances of a smooth application process. Take the time to prepare, and your efforts will pay off.
Misconceptions
The IRS Form 1023 is essential for organizations seeking tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. However, several misconceptions often lead to confusion. Here’s a closer look at six common misunderstandings about this important form:
-
Filing Form 1023 Guarantees Tax-Exempt Status:
Many believe that submitting the form automatically grants tax-exempt status. In reality, the IRS reviews the application and makes a determination based on the information provided.
-
All Nonprofits Need to File Form 1023:
Not every nonprofit must file this form. Some organizations may qualify for a streamlined application or may not need to apply at all, depending on their structure and activities.
-
Form 1023 is a One-Time Requirement:
While the form is crucial for initial tax-exempt status, organizations must continue to comply with IRS regulations and may need to file additional forms annually to maintain their status.
-
The IRS Provides Extensive Guidance on Completing Form 1023:
Although the IRS does offer some resources, many find the instructions vague. Seeking help from professionals or experienced individuals can make the process smoother.
-
Form 1023 is Only for Charitable Organizations:
While many associate the form with charities, it is also applicable to educational, religious, and other types of organizations that meet the criteria for tax exemption.
-
Once Approved, an Organization Can Operate Without Restrictions:
Tax-exempt organizations must adhere to specific rules regarding their operations and finances. Failing to comply can jeopardize their tax-exempt status.
Understanding these misconceptions can help organizations navigate the process more effectively. Being informed is the first step toward successfully achieving tax-exempt status.
Key takeaways
When filling out and using the IRS 1023 form, there are several important considerations to keep in mind. Here are six key takeaways:
- Understand the Purpose: The IRS 1023 form is used to apply for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. This status allows organizations to receive donations that are tax-deductible for the donor.
- Gather Required Information: Before starting the form, collect necessary information such as your organization’s mission statement, financial data, and details about your activities. This preparation will streamline the process.
- Be Thorough and Accurate: Complete each section of the form with care. Inaccuracies or incomplete information can lead to delays or denial of your application.
- Include Supporting Documentation: Attach all required documents, such as articles of incorporation and bylaws. These documents provide essential context about your organization’s structure and purpose.
- Consider Professional Assistance: If the process feels overwhelming, consider seeking help from a professional experienced in nonprofit law or tax-exempt applications. Their expertise can be invaluable.
- Stay Informed: Tax laws and IRS requirements can change. Regularly check the IRS website or consult with professionals to ensure you have the latest information relevant to your application.