Form 1023 Instructions and explanation of each part in detail
This page is a directory of instructions for the IRS form 1023 with complete explanations of each part and section so you can file your 501c3 application by yourself. This page should make it easy for users to open different tabs simultaneously for ease of navigation. Although these form 1023 instructions are accessible from the main navigation menu and the sidebar, this helps users with disability who are using text readers to navigate the website better.
- Instructions for Form 1023 Part I (1), identification of applicant. Step by step answers to questions on Part I of the IRS form 1023 application for 501c3 tax exemption.
- In Form 1023 Part II (2), IRS tries to identify you as an eligible Nonprofit organization. You need to adopt a Nonprofit Bylaws or the IRS won’t accept your Form 1023 application.
- Form 1023 Part III (3) asks for Required Provisions clause that 501c3 exempt nonprofit organizations have to adopt in their articles of incorporation. This section is extremely important as this is the number one cause of form 1023 rejection from the IRS.
- Narrative description of activity Part IV (4) of the form 1023 is the most important part of form 1023. We explore what needs to go in your narrative with references to sample narrative description of activities.
- Form 1023 Part V (5) deals with nonprofit compensation & arrangements to and between officers and directors of the applying organization. Here we answer how you are going to compensate your board members, directors, officers or trustees.
- IRS Form 1023 part VI (6) Financial Data section deals with your financial data and your form 1023 budget projection. I’ve provided a very useful free budget calculator for form 1023 as well.
- IRS Form 1023 Part VII (7) Foundation Classification – This section deals with what constitute a Private Foundation or a Public Charity status and which status you can qualify for.
- You have 27 months to apply for tax exemption or the IRS won’t backdate your donations. This very important as the date of the tax exemption will be the approval date of the 501c3 status.
- Certain organizations are not required to file annual information returns or notices (Form 990, 990-EZ, or Form 990-N, e-Postcard) such as churches but most organizations do. Here we talk about how you should answer this question.
- There is no need to electronically sign the form 1023, but all the same, you are declaring under the penalties of perjury that you are authorized to do so. We look at who can sign this document and what should your form 1023 attachment look like.
- Form 1023 User fee information. Updated information on the IRS Form 1023 Tax Exemption Application User Fee Payment which is directly paid on pay.gov website.
- Instruction & help on IRS form 1023 schedules. Form 1023 schedules run from A to H which cover churches, schools, hospitals & low income housing. Here I cover the all of them with instructions on what should be included in your answers.
- Do you want to expedite form 1023 tax exemption application? Expediting Form 1023 application can be accepted for compelling reasons which we look at here with a sample form 1023 expedite letter.