How to Complete and File IRS Form 1023 for 501(c)(3) Exempt Status

To file IRS Form 1023 and apply for 501(c)(3) tax-exempt status, submit the application electronically through Pay.gov and pay the $600 user fee.¹ There is no paper option. About 80 percent of applications receive a determination within 191 days, though complex cases take longer.² Before you log in to Pay.gov, you need an Employer Identification Number, organizing documents containing specific IRS-required language, financial data or projections, and a concrete written description of your activities.

Full Form 1023 or the Streamlined 1023-EZ

Smaller organizations may qualify for Form 1023-EZ, which costs $275 and is much shorter than the full application.¹ You must use the full Form 1023 if any of these apply:

Your annual gross receipts have exceeded $50,000 in any of the past three years, or you project they will exceed $50,000 in any of the next three years.
Your total assets currently have a fair market value above $250,000.
You are a church, school, hospital, or another entity type that is ineligible for the EZ version regardless of size.

Work through the eligibility worksheet at the end of the Form 1023-EZ instructions. A single “yes” answer sends you to the full form.³ Filing the EZ when you don’t qualify is one of the mistakes that gets an application rejected.

File Within 27 Months of Formation

File Form 1023 within 27 months from the end of the month your organization was legally formed, and your exemption, if approved, takes effect on your formation date. File after that window and your exemption begins on the date you submit the application.⁴

The gap matters for donors. Contributions received before the effective date of exemption are not tax-deductible. While your application is pending, donors have no advance assurance either way: if approval comes with retroactive effect, earlier contributions become deductible; if the application is denied, they are not.⁵

What to Gather Before You Start

Pay.gov does not reliably let you save partial work, and missing a single required item can send the whole application back. Assemble everything first.

Employer Identification Number

You need an EIN before you file, even if your organization has no employees. Apply online at IRS.gov using Form SS-4; the number is issued immediately.

Organizing Documents With Two Required Clauses

Your articles of incorporation, articles of organization, trust instrument, or similar document must include two specific provisions. First, a purpose clause limiting the organization to one or more exempt purposes. Second, a dissolution clause directing that assets will be distributed to another 501(c)(3) organization or to a government entity for a public purpose if the organization ever dissolves. The IRS provides suggested dissolution language:⁶

“Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose.”

This is where a lot of applications stall. Documents look fine to the founders but lack the specific language the IRS requires. If yours are missing either clause, amend them with your state before filing Form 1023.

The underlying rule is Treasury Regulation Section 1.501(c)(3)-1(b): your organizing document must limit purposes to exempt ones and must not authorize non-exempt activities except as an insubstantial part of operations.⁷

Bylaws and a Conflict of Interest Policy

Include bylaws if you’ve adopted them. The IRS asks whether you have a conflict of interest policy, and the Form 1023 instructions include a sample in Appendix A. A policy isn’t technically required, but its absence is a red flag. A workable policy requires board members and officers to disclose financial interests in transactions with the organization, recuse themselves from voting on conflicted matters, and sign an annual compliance statement.

Officers, Directors, and Compensation

Compile names, mailing addresses, and titles for every current officer, director, and trustee. Note who receives compensation and how much, and identify any related-party transactions.

Financial Data

How many years of numbers you provide depends on your organization’s age:⁸

Less than one year old: projections for the current year and the next two.
One to four years old: actual figures for each completed year, plus projections to reach four years total.
Five years or older: actuals for the five most recently completed tax years.

Break the numbers down by category: contributions, grants, program revenue, fundraising costs, management expenses, and program spending. Vague round numbers invite follow-up questions. Base projections on documented assumptions such as a fundraising plan, grant commitments, or comparable budgets.

Filling Out the Form

Part IV: The Activity Narrative

This is where applications tend to succeed or fail. For every substantial activity your organization conducts or plans to conduct, describe:⁹

What the activity is and who carries it out
Where and when it takes place
How it furthers your exempt purpose
What percentage of the organization’s time and resources it consumes
How it is funded

“We provide educational programs to underserved communities” is not enough. Describe the curriculum, who teaches it, how participants are selected, whether you charge fees, and what outcomes you track. Write as though the specialist reading your application has never heard of your organization, because they haven’t.

Part VI: Financial Data

Part VI is where the revenue and expense figures you gathered go. The IRS also uses these numbers to decide whether you qualify as a public charity or a private foundation. A 509(a)(1) public charity generally must receive at least one-third of its support from public sources rather than from a small group of donors or investment income.¹⁰ Falling short doesn’t disqualify you from exemption, but you may be classified as a private foundation, which brings stricter operating rules and additional excise taxes.

Schedules for Specific Organization Types

Depending on what you do, you may need to complete one or more schedules:⁸

Schedule A: Churches
Schedule B: Schools, colleges, and universities
Schedule C: Hospitals and medical research organizations
Schedule D: Section 509(a)(3) supporting organizations
Schedule E: Organizations requesting a specific effective date
Schedule F: Low-income housing organizations
Schedule G: Successors to other organizations
Schedule H: Organizations providing scholarships, fellowships, or educational grants

Each schedule asks sector-specific questions about governance, admissions, staffing, or operations. Schedule B, for instance, asks schools about nondiscrimination policies and any revocation of accreditation.

Submitting on Pay.gov

Create a Pay.gov account, search for “1023,” and complete the form on the platform.¹¹ Before you submit, combine all attachments into a single PDF. Pay.gov accepts only one uploaded file, capped at 15 megabytes. Arrange the documents in this order: organizing document, then amendments in chronological order, then bylaws, then any power of attorney or tax information authorization forms, then supplemental responses. Put your organization’s name and EIN on each page of supplemental material.⁸ If your file exceeds 15 megabytes, call IRS Customer Account Services at 877-829-5500 for instructions on submitting the overflow.

Pay the $600 user fee through Pay.gov at submission using a bank account, debit card, or credit card. The fee is non-refundable once the application is accepted for processing. If the IRS determines your application is substantially incomplete before processing begins, both the application and the fee are returned to you.¹²

After You File

Pay.gov generates a confirmation receipt with a tracking number. Check status on the IRS “Where’s My Application?” page.²

Straightforward applications sometimes receive a determination letter with no back-and-forth. More complex cases are assigned to a determination specialist who may request additional documentation. Respond promptly. Slow replies extend the process, and extended silence can lead the IRS to close your case. A favorable outcome is a determination letter officially recognizing your 501(c)(3) status. If the IRS decides you don’t qualify, it sends a letter explaining the reasons and your appeal rights.⁸

Common Reasons Applications Get Returned

An application missing any required component is sent back with the user fee.¹² The recurring problems:

Organizing documents that lack the purpose clause or the dissolution clause. Amend with the state before filing.
A vague activity narrative in place of concrete details about who does what, where, when, and how it advances an exempt purpose.
Incomplete financial data: missing years, unexplained categories, or projections with no basis.
No EIN. You can’t submit without one.
The wrong form version: filing 1023-EZ when the organization exceeds the thresholds or is an ineligible type.

Pay.gov blocks some incomplete submissions automatically, but not all. The IRS can also return an application after submission if it doesn’t meet the requirements of the annual revenue procedure for determination letter requests.

Obligations That Kick In After Approval

The determination letter isn’t the finish line. Every 501(c)(3) organization must file an annual information return.¹³ Which version depends on size:

Form 990-N (e-Postcard): gross receipts normally $50,000 or less.
Form 990-EZ: gross receipts under $200,000 and total assets under $500,000.
Form 990: gross receipts of $200,000 or more, or total assets of $500,000 or more.
Form 990-PF: all private foundations, regardless of size.

Miss any required return or notice for three consecutive years and tax-exempt status is automatically revoked by operation of law. There is no IRS decision to appeal. Revocation takes effect on the filing due date of the third missed return.¹⁴ After revocation, the organization owes income tax, donors lose their deduction, and getting exempt status back means filing a brand-new application.

Approved organizations must also make the Form 1023 application, all supporting documents, and the determination letter available for public inspection. In-person requests at the principal office must be filled immediately during business hours; written requests must be answered within 30 days.¹⁵ Posting the documents on your website satisfies the rule and eliminates individual requests. If you handle requests by mail, you may charge up to 20 cents per page plus postage and can require advance payment. Willful refusal to allow inspection carries a $5,000 penalty per return or application.

1
Internal Revenue Service. Form 1023 and 1023-EZ: Amount of User Fee
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Internal Revenue Service. Where’s My Application for Tax-Exempt Status?
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Internal Revenue Service. Instructions for Form 1023-EZ
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Internal Revenue Service. Publication 557
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Internal Revenue Service. Exempt Organizations General Issues: Deductibility of Contributions While Application Pending
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Internal Revenue Service. Suggested Language for Corporations and Associations (Per Publication 557)
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GovInfo. 26 CFR 1.501(c)(3)-1 – Organizations Organized and Operated for Religious, Charitable, Scientific, Testing for Public Safety, Literary, or Educational Purposes
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Internal Revenue Service. Instructions for Form 1023
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Internal Revenue Service. Form 1023: Detail Required in Narrative Description of Activities
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Internal Revenue Service. Form 990, Schedules A and B: Public Charity Support Test
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Internal Revenue Service. About Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
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Internal Revenue Service. Changes to the EO Determinations Process: Rejecting Incomplete Applications
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Office of the Law Revision Counsel. 26 USC 6033 – Returns by Exempt Organizations
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Internal Revenue Service. Automatic Revocation of Exempt Status for Non-Filing
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Internal Revenue Service. Public Disclosure and Availability of Exempt Organizations Returns and Applications: Documents Subject to Public Disclosure