Filing Form 1023 or 1023-EZ

Two forms

Most organizations seeking 501(c)(3) status file either Form 1023 or the shorter Form 1023-EZ. Both are filed electronically through Pay.gov, and both require a user fee paid at filing. Confirm the current fee on the IRS website before you apply.

Who can use the 1023-EZ

The streamlined form is intended for small organizations. To use it, you must complete the eligibility worksheet in the form's instructions. Among the conditions, projected annual gross receipts must not exceed $50,000 in each of the next three years, and total assets must not exceed $250,000 in fair market value. Certain types of organizations, including churches, schools, and hospitals, cannot use it.

The EZ asks for attestations rather than a full narrative. It is faster, but some state agencies and grantmakers want the detail that only the full Form 1023 contains. If you expect to grow quickly or apply for significant grants, consider filing the full form.

What the full Form 1023 asks for

• Your articles of incorporation and, if adopted, your bylaws
• A detailed narrative of past, present, and planned activities
• Information about directors, officers, and compensation
• Financial data, including projected budgets for new organizations
• Answers about public charity classification

The narrative is the most important part. Describe what you will actually do, who will do it, where, how it is funded, and how it serves your exempt purpose.

File within 27 months

If you file within 27 months of your date of formation, and the application is approved, exemption is generally recognized back to that date. Miss the window and the effective date may be later, which affects donations received in between.

After approval

The IRS issues a determination letter. Store it with your founding records. It is the document donors, banks, and funders will ask for. You must also make your application and determination letter available for public inspection on request.