Instructions for Form 1023 Part IX – Your financial data

Part IX of the IRS form 1023 deals with your financial data. If you are an existing organization, you have all the realistic data and should be able to answer the following questions with ease. But if you are a new organization, and just applying for tax exemption status, this section will look outrageously stupid, because you have no financial data as of yet, but somehow you are required to provide them. Don’t get too worked up, its’ for your own good.

Even though you have no financial records, you should provide your past (even if it consist of buying lunch for the board), your present, and at least two or three complete years into future. This is where you and your CFO has to get creative and make up numbers. I say make up numbers because there is no other way of putting it. For lack of better word, you have to speculate on what you will earn, what your expenses will be, and what will remain at the end of each year.

Part IX of the IRS form 1023 has to be done with utmost professionalism. No government office temp is going to give you any heed if you hand draw your tables or list your data in an incoherent way. Get organized and act like a pro. If you have a financial person as your treasurer which you should, put him to work. He needs to project your expenses, from A to Z, and put them down in tables. Do not use the actual 1023 form for this; this section should go in your attachment sheet. Following is an example of how your financial data should be presented. Note that every table is clearly marked, and every section relates to questions asked on the form.

The following are sample attachment sheets for various organizations. The more in-dept explanation follows:

Part IX Form 1023 Financial Data

A) Statement of Revenues and Expenses and Projected Data for 2010, 2011, and 2012 Tax Years

Line 9.  Gross receipts from admissions, merchandise sold or services performed… in any activity that is related to your exempt purposes (attach itemized list.)

The following table consists of the projected gross income from monetary donations, grants and gifts to the corporation. This includes the promotional merchandise sales as well as services rendered. The table is sorted alphabetically.

Form 1023, Part VIII, Line 23. Any expense not otherwise classified (attach itemized list.)

The following table consists of the corporation expenses, expenditures and spending for the shown years. Please refer to the second worksheet for further itemizations. The table is sorted alphabetically.
Please note: For our 2009 expense and income report, please refer to section B: Balance Sheet for our most recently completed tax year on page 17 of this document.

Form 1023, Part VIII, Line 23. Any expense not otherwise classified (attach itemized list.)

The following table consists of the corporation expenses, expenditures and spending for the shown years. Please refer to the second worksheet for further itemizations. The table is sorted alphabetically.
Please note: For our 2009 expense and income report, please refer to section B: Balance Sheet for our most recently completed tax year on page 17 of this document.

Further Breakdown of Expenses

Please note that the inflation rate for the years of 2011 and 2012 has been calculated based on a 5% increase annually. Daily figures are based on 30-day months. (Please see table on next page.) The table is sorted alphabetically.

B) Balance Sheet (for your most recently completed tax year)

Please note:  The table below is an itemized list of the expenses and income of Transcontinental Humanitarian Corp. since its incorporation on December 7,2009 to December 31, 2009. The table is sorted alphabetically.

The last part is you asset sheet. You need to list anything and everything that your organization owns from chairs to automobiles.