July 7, 2021
Here are some tips to help understand the application process.
The IRS' Application Process page guides you by asking questions to help determine if the organization is eligible to apply for recognition of exemption from federal income taxation under section 501(a) of the Internal Revenue Code and, if it is, how to do so. For the IRS to recognize an organization's exemption, it must be organized as a trust, a corporation, or an association, and it must have an exempt purpose.
Form 1023-series applications for recognition of exemption must be submitted electronically online at Pay.gov. Register an account if you don't already have one, then enter "1023" to choose the Form 1023. The application must be complete, signed, and dated, and include the user fee.
Some types of organizations don't need to apply for Section 501(c)(3) status to be tax-exempt. These include churches and their integrated auxiliaries, and public charities with annual gross receipts normally no more than $5,000.
Every tax-exempt organization should have an employer identification number, which is a nine-digit number the IRS assigns to identify a business' tax accounts EIN, even if they don't have any employees. You must be include your EIN on the application; if you need to apply for one, you can do apply online.
The effective date of an organization's tax exempt status depends on their approved Form 1023. If they submit this form within 27 months after the month they legally formed, the effective date of their organization's exempt status is the legal date of its formation. If an organization doesn't submit this form within those 27 months, the effective date of its exempt status is the date it files Form 1023.
Once the IRS determines an organization qualifies for tax exempt status under the law, it will also be classified as a private foundation unless the organization meets the requirements to be treated as a public charity.
A charitable organization must make certain documents available to the public. These include its approved application for recognition of exemption with all supporting documents and its last three annual information returns. See Publication 557, Tax Exempt Status For Your Organization for additional information on public inspection requirements.