Form 1023 Instructions Part IX: Annual Filing Requirements

In Form 1023 Part IX, certain organizations are not required to file annual information returns or notices (Form 990, Form 990-EZ, or Form 990-N, e-Postcard). The question on the form is that "if you are granted tax-exemption, are you claiming to be excused from filing?"

Form 1023 Part IX: What the IRS is Actually Asking

Part IX is not asking whether you would prefer not to file annual returns. It is testing whether you understand that filing is a condition of exemption, not an optional compliance step. Organizations that answer "yes" are not claiming a privilege; they are signaling that they misunderstand the basic obligations that come with tax-exempt status.

Recognition of exemption removes federal income tax liability on exempt income. It does not remove the obligation to report activities, finances, and governance to the IRS on an annual basis. Part IX forces the applicants to acknowledge that transparency is the price of exemption, not a separate choice.

Form 1023 Part IX: How to Answer the Annual Filing Requirements

The answer has to be a big fat NO. If you say yes, you're just asking for questions you can't answer.

Here's the rule: if you make more than $50,000, you have to file the full Form 990; if not, you file the 990-EZ or 990-N (e-Card). Either way you have to file.

Form 1023 Part IX: Do you Have to File Form 990?

Almost all organizations must file some flavor of Form 990 unless they fall into one of these categories:

1. A Church.
2. An integrated auxiliary of a church, as described in Regulations section 1.6033-2(h);
3. The exclusively religious activities of a religious order; or
4. An organization whose gross receipts are normally $5,000 or less and that supports a 501c3 501(c)(3) religious organization.

Take the time to understand your annual filing obligations as a tax-exempt organization. The penalties for failing to file or filing late are severe and should be avoided at all costs.

Form 1023 Part IX: Consequences of Not Filing Annual Returns

Failure to file required annual returns doesn't trigger a warning cycle or discretionary enforcement. Under federal law, an organization that fails to file a required annual information return or notice for three consecutive years automatically loses its tax-exempt status. The revocation is statutory, not elective, and it happens by operation of law, not by examiner review.

Part IX is a reminder of this obligation up front. Answering "yes" to being excused from filing is a complete misunderstanding of a rule that, if ignored later, ends exemption entirely.