Non-profit organizations are usually created to provide some charitable, civic, community, social, and/or business  objective.  States usually refer to these entities are non-profit or not-for profit organizations and the IRS usually refers to these organizations as exempt organizations.  Certain filings have to be made with the state and certain filings have to be made with the IRS to receive a determination letter or exempt status letter that your organization is exempt from federal and state income tax.  The following information is intended to get you started in requesting exempt status for your organization.

Getting started:  You should have basic information about your organization before filing articles of incorporation and attempting to complete Form 1023 or 1024 such as:

• name, address, contact information, and list of officers, directors, trustees, etc.;
• Employer Identification Number (EIN);
• primary activity of the organization because you will have to select an NTEE Code – otherwise the IRS will select an NTEE Code for you;
• expected sources of revenue such as donations, grants, fees for services;
• expected expenses such as service costs, salaries, rent;
• list of assets and liabilities;
• foundation classification, public charity or private foundation;
• organizing documents such as articles of incorporation, bylaws;

Articles of incorporation – are filed with the state, however review Pub. 557, Tax Exempt Status for Your Organization for the exact language to include in articles of incorporation.  If the Articles do not have language acceptable to the IRS regarding the purpose for which the organization was created, you may have to pay an additional fee to change/amend your articles to include certain language.  Articles must be submitted with your Form 1023 or 1024.  Sample language for Form 1023 includes – ”

Taxpayer Identification Number (TIN) –

Governing Board

Form 1023, Application for Recognition of Exemption under IRC section 501(c)(3) – beginning Jan. 31, 2020, applications for recognition as a 501(c)(3) organization must be filed online at www.Pay.gov and pay the $600 User Fee.  You may want to print the Application and complete it by hand before filing electronically because certain yes/no questions may require that you complete another form or schedule or give a detailed explanation.  Also, if try to skip a question, the software will not let you move on until the question is answered.

Before an exemption/determination letter is issued, an applicant must demonstrate that the organization is organized and operated for one or more 501(c)(3) purposes and not for a private purpose.  Organized means –

• be a corporation or unincorporated association;
• articles of incorporation must limit the organization’s primary purpose to a 501(c)(3) purpose;
• the articles must have a statement that if the organization is dissolved, all of the assets will go to the federal, state, or local government or other 501(c)(3).

Pub. 557 and the IRS’s website has sample organizing documents that contain the required language that can be included, word for word, in the articles of incorporation or other organizing document.

Form 2013-EZ Streamlined Application for Recognition of Exemption under IRC section 501(c)(3)

Form 1024, Application for Recognition of Exemption under IRC section 501(a)

Form 1024-A, Application for Recognition of Exemption under IRC section 501(c)(4)

• • Primary activity
  • Other activities
  • Primary source of revenue
  • Income statement
  • Balance Sheet

Service Providers

• • Employees
  • Independent Contractors
  • Professional Services –
  • Volunteers

Form 990, Return of Organization Exempt from Income Tax

Form 990-T, Exempt Organization Business Income Tax Return