IRS form 1023 frequently asked questions are listed here.
The following are the most asked questions I have received. Please read through them as chances are that you are wondering about the same topic as well.
The last two question and answers are the phone numbers and addresses for the IRS, and instruction regarding how to contact the Exempt Organization Department of the Internal revenue Service (EO). Click on the questions to open and read the answers.
Do I need a tax-exempt number for my organization?
How much is the user fee for an exemption application?
What must be included in organizing documents to qualify for exemption?
A charity’s organizing document must limit the organization’s purposes to exempt purposes set forth in section 501c3 and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further those purposes. This requirement may be met if the purposes stated in the organizing document are limited by reference to section 501c3.
In addition, an organization’s assets must be permanently dedicated to an exempt purpose. This means that if an organization dissolves, its assets must be distributed for an exempt purpose described in section 501c3, or to the federal government or to a state or local government for a public purpose.
To establish that an organization’s assets will be permanently dedicated to an exempt purpose, the organizing document should contain a provision insuring their distribution for an exempt purpose if the organization dissolves. Although reliance may be placed upon state law to establish permanent dedication of assets for exempt purposes, an organization’s application can be processed by the IRS more rapidly if its organizing document includes a provision ensuring permanent dedication of assets for exempt purposes.
For examples of provisions that meet these requirements, see the nonprofit purpose and dissolution clause page.
If the organizing document does not contain these provisions, an organization should amend it before submitting its exemption application. Here you can learn how to amend your organizing documents.
May an authorized representative sign Form 1023?
No. Form 1023 instructions state that an individual authorized by Form 2848 (your attorney or a person with the power an attorney) may not sign the application unless that person is also an officer, director, trustee, or other individual who is authorized to sign the application. Form 1023 is an application for the issuance of a determination letter or ruling letter by the IRS that recognizes an organization’s exemption from federal income tax.
Revenue Procedure 2011-4 (or latest update), requires that a letter ruling or determination letter request be accompanied by a penalties of perjury statement signed by the taxpayer, not the taxpayer’s representative.
This requirement is based on the concept that by signing the application, an official of the organization is assuming responsibility for the accuracy of the information. Generally, an authorized representative would not be in a position to verify the accuracy of the information provided by the organization.
Is there such a thing as an advance ruling?
Why does Form 1023 ask for information about successor organizations?
Why am I asked for information about payments to third parties?
What happens if we don’t have the required organizational structure?
How much detail should be provided in the narrative description of activities?
The narrative description, including information referenced in other parts of the application, should include information that answers the following questions:
- What is the activity?
- Who conducts the activity?
- When is the activity conducted?
- Where is the activity conducted?
- How does the activity further the organization’s exempt purposes?
- What percentage of the organization’s total time is allocated to the activity?
- How is the activity funded?
This section of the form 1023 is the most important section, please see the Narrative Description of Activities page for complete detail.
What if purposes or programs change after an application is submitted?
If the organization’s organizing documents, purposes, or programs change while the IRS is considering an application, you should report the change in writing to the office processing your application. If you do not know the office that is processing your exemption application, contact Exempt Organizations Customer Account Services.
Because material changes in a charity’s structure or activities may affect its tax-exempt or public charity status, organizations should report such changes to the IRS Exempt Organizations Division.
Where do I send my 501c3 exemption application?
The application for 501c3 tax exemption is filed online on Pay.gov
How can I Contact the IRS regarding my application?
For answers to technical and procedural questions about charities and other non-profit organizations, call IRS Tax Exempt and Government Entities Customer Account Services at (877) 829-5500 (toll-free number). If you prefer to write, use the address below. For answers to employment tax questions, call the Business and Specialty Tax Line at (800) 829-4933 (toll-free). To obtain a determination letter that applies the principles and precedents previously announced to a specific set of facts, or to transmit copies of amended documents, write to:
Internal Revenue Service
Exempt Organizations Determinations
P.O. Box 2508
Cincinnati, OH 45201
