OBTAIN FEDERAL TAX-EXEMPTION DETERMINATION
Nonprofits obtain charitable or educational tax-exempt status under Section 501(c)(3) of the Internal Revenue Code by filing an application with the IRS. Depending on its circumstances, an organization may file either the Form 1023 Application, or the new online-only Form 1023EZ*, and receiving a positive determination letter in response from the IRS. The time needed to complete this form varies greatly based on individual circumstances. The Form 1023 (long-form) can be difficult to understand, and extremely time consuming. Answering incorrectly can damage your application.
*The three-page online Form 1023EZ was introduced in 2014 for use by organizations that do not expect to exceed $50,000 in revenues in any of their first three years of operation, and meet certain other conditions. The majority of start-up charitable organizations are probably eligible to use the Form 1023EZ. To determine if you are eligible you must complete the Form 1023-EZ Eligibility Worksheet on pages 11-20 of the Form 1023EZ Instructions. You do not submit incorporation or other organizational documents with the online filing but must attest under penalty of perjury to the existence and content of the documents and other required information.
Filing the IRS Form 1023EZ online (The required filing fee for the Form 1023EZ was reduced to $275 (from $400) on July 1, 2016)
Completing and filing the IRS FORM 1023
IRS Form 1023
IRS Form 1023 Instructions
IRS Frequently Asked Questions about using the Form 1023
There is also an “Interactive” Form 1023 that you can complete, then download and print for filing.
Filing a Form 1023 will require a date-stamped copy of your filed Articles of Incorporation, signed Bylaws, an adopted Conflict of Interest Policy, a detailed description of program activities, and your program budget for at least 3 years.
$400 - if your projected gross revenue average is less than $10,000 for the first three years
$850 – if your projected gross revenue average is greater than $10,000 for the first three years
After filing the Form 1023, IRS response time can vary, taking anywhere from 2-12 months before you receive your determination letter.