Choosing between Form 1023 and Form 1023-EZ comes down to your organization’s size and type. Form 1023-EZ is the streamlined application: three pages, a $275 user fee, and roughly 22 days of processing for 80% of filers. The full Form 1023 runs much longer, costs $600, and takes about 191 days for 80% of applications to clear.1Internal Revenue Service. Where’s My Application for Tax-Exempt Status? But you don’t get to pick freely. The EZ form is limited to smaller organizations that pass an eligibility test; everyone else has to file the full 1023.
Who Can Use Form 1023-EZ
Before filing the EZ, you have to complete the Form 1023-EZ Eligibility Worksheet in the instructions. A single “yes” answer disqualifies you and pushes you to the full Form 1023.2Internal Revenue Service. Instructions for Form 1023-EZ
The financial cutoffs are firm. You cannot use the EZ if:
- Annual gross receipts exceeded $50,000 in any of the past three years
- Annual gross receipts are projected to exceed $50,000 in any of the next three years
- The fair market value of your total assets is more than $250,000 at the time of filing
Certain organization types are barred from the EZ regardless of their finances: churches, schools, colleges, universities, hospitals, and medical research organizations. So are organizations seeking classification as supporting organizations under Section 509(a)(3), and any organization that maintains or plans to maintain donor-advised funds.2Internal Revenue Service. Instructions for Form 1023-EZ These groups must file the full Form 1023.
If you clear the worksheet, the EZ is a real option. If you don’t, or you’re close to the thresholds and expect to grow past them soon, the full form is the safer path.
What the Full Form 1023 Asks For
The full application asks you to document, in detail, what the EZ lets you attest to with a checkbox.
A Narrative of Your Activities
Part IV requires a complete description of your past, present, and planned activities.3Internal Revenue Service. Form 1023 Part IV Narrative Description of Your Activities This is the section that most often holds applications up. The IRS wants specifics: what the organization does, who benefits, how activities are funded, and how each activity furthers an exempt purpose. General mission language isn’t enough.
Financial Data
You’ll provide three years of financial data, or projections if the organization is newer, including revenue sources and compensation paid to officers and directors.
Organizing Documents
The full 1023 requires you to attach an exact copy of your articles of incorporation, trust agreement, or articles of association. Those documents must contain a purpose clause limiting activities to exempt purposes under Section 501(c)(3) and a dissolution clause directing remaining assets to another 501(c)(3), the federal government, or a state or local government for a public purpose.4Internal Revenue Service. Charity – Required Provisions for Organizing Documents Without both clauses, the application won’t be approved. The EZ doesn’t ask you to attach the documents, but you still need them drafted and on file; the IRS can request them at any point.5Internal Revenue Service. Exempt Organizations – Organizing Documents
Supplemental Schedules
Depending on what your organization does, the full 1023 may require an additional schedule:6Internal Revenue Service. Instructions for Form 1023
- Schedule A for churches, synagogues, temples, and mosques
- Schedule B for schools, colleges, and universities
- Schedule C for hospitals and medical research organizations
- Schedule D for supporting organizations under Section 509(a)(3)
- Schedule F for low-income housing organizations
- Schedule G for successor organizations
- Schedule H for organizations providing scholarships, fellowships, or educational grants to individuals
Each schedule has its own requirements. A school, for example, must demonstrate a nondiscriminatory admissions policy. These schedules are one of the main reasons the barred organization types can’t take the EZ shortcut.
Conflict of Interest Policy
Form 1023 asks whether the organization has adopted a conflict of interest policy. Adopting one isn’t legally required for exempt status, but the IRS recommends it, and Appendix A of the instructions provides a sample.7Internal Revenue Service. Instructions for Form 1023 (Rev. December 2024) Many grant-making foundations require one as a condition of funding.
The Trade-Off Behind the EZ’s Speed
The EZ is faster because it relies almost entirely on attestations. You check boxes confirming you meet the legal requirements rather than submitting proof. The IRS pulls a random sample of 1023-EZ applications for pre-determination review, and if your attestations turn out to be inaccurate, the consequences can include rejection or later revocation of exempt status. Speed is real, but the responsibility for getting the underlying facts right sits entirely with the organization.
The 27-Month Deadline Applies to Both
Whichever form you file, timing matters. File within 27 months from the end of the month your organization was legally formed, and the IRS will recognize your tax-exempt status retroactively to the date of formation.8Internal Revenue Service. Form 1023 – Purpose of Questions About Organization Applying More Than 27 Months After Date of Formation Miss the deadline and exempt status may only be recognized from the date the IRS receives your application. Donations made during the uncovered gap wouldn’t be tax-deductible.
The clock starts when you incorporate or form your trust, not when operations begin. If your formation date is drifting toward the 27-month mark, that pressure alone may push you toward the EZ if you qualify.
Filing and Paying
Both forms are filed electronically through Pay.gov.9Internal Revenue Service. About Form 1023 You create an account, search for the form by name or number, and complete it in the portal. The full Form 1023 allows attachments for organizing documents, financials, and the narrative. The EZ is completed entirely inside the portal with no attachments.
The user fee is due at submission and non-refundable: $275 for the EZ, $600 for the full form.10Internal Revenue Service. Frequently Asked Questions About Form 1023 Payment goes through Pay.gov by credit card or direct bank debit. If the fee isn’t paid correctly, the application is returned.
You’ll need a federal Employer Identification Number before filing either form. You can get one online through the IRS at no cost, and the number is typically assigned immediately.11Internal Revenue Service. Get an Employer Identification Number
While You Wait
You don’t have to freeze operations during review. If the application was filed on time, exempt status is recognized retroactively to the date the organization was created, so you can operate as tax-exempt during the wait.12Internal Revenue Service. Contributions to Organization With IRS Application Pending Donors, though, take on some uncertainty: contributions become tax-deductible only if the IRS ultimately approves the application. Many institutional funders will hold off until the determination letter is issued.
After Approval
Approval isn’t the finish line. Every exempt organization must file an annual information return in the Form 990 series, and missing that filing for three consecutive years triggers automatic revocation of exempt status on the due date of the third missed return. There’s no notice, no warning, and no grace period.13Internal Revenue Service. Automatic Revocation of Exemption Reinstatement requires a new application and another user fee.14Internal Revenue Service. Reinstatement of Tax-Exempt Status After Automatic Revocation
Section 501(c)(3) organizations are also absolutely prohibited from participating in political campaigns for or against any candidate for public office, whether directly or indirectly. There’s no threshold amount or insubstantial-activity exception; any campaign intervention can trigger revocation.15Internal Revenue Service. Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations Whichever application you file, that rule follows the exemption.