Complete the Form 1023-EZ Eligibility Worksheet
Before you can fill out Form 1023-EZ, you must first determine if your organization is eligible to use it instead of Form 1023. To do this, complete the Form 1023-EZ Eligibility Worksheet located on pages 13 through 20 of the IRS’ official Instructions for Form 1023-EZ. Currently, this worksheet contains 30 “yes” or “no” questions. If your organization answers “yes” to any of the questions, you must use Form 1023 instead.
Know When to File Form 1023-EZ
Your organization should file Form 1023-EZ online within 27 months of incorporating. If your organization files within this timeframe and obtains tax-exempt status, its tax-exempt effective date will be the same as its date of incorporation. If your organization files Form 1023-EZ more than 27 months after incorporating and receives tax-exempt status, its tax-exempt effective date will be the date you filed Form 1023-EZ online.
Gather the Required Information
Before you begin filling out Form 1023-EZ, you should gather all the information you’ll need in one place. Form 1023-EZ includes six sections that require the following information:
- Identification of Applicant
- The full name of your organization (This name must match the organization name listed on your organizing document (e.g., Articles of Incorporation.)
- Your organization’s return address (Provide a complete mailing address to which correspondence related to your application may be sent.)
- Your organization’s Employer Identification Number (EIN)
- The month your organization’s tax year ends
- A point of contact (Provide the name, title, telephone number, and fax number of someone who may be contacted if more information is required.)
- The monetary amount you’ve included with your form
- The names, titles, and mailing address of your organization’s officers, directors, and/or trustees
- Your organization’s website address (If your nonprofit doesn’t have a website, enter “not applicable” or “N/A.”)
- Your organization’s email address (If your organization would like to receive educational information from the IRS in the future, provide your organization’s email address.)
- Organizational Structure
- Entity type (For nonprofit organizations, three entity types — corporations, trusts, and unincorporated associations — are eligible to file using Form 1023-EZ.)
- Necessary organizing document (For corporations, this usually is the Articles of Incorporation if it shows the date the organization filed for incorporation.)
- Formation date (You must provide the date you filed your Articles of Incorporation. If you amended your Articles of Incorporation to adhere to 501(c)(3) requirements, include the date on which you filed those changes. The only exception is if your changes are considered nonsubstantive, according to Rev. Proc. 2017-5, 2017-1 I.R.B. 230.)
- State of formation (You must name the state in which your organization is incorporated.)
- Purpose (You must verify that your organizing document contains a clause that limits your organization’s purpose to one or more exempt purposes within Section 501(c)(3) of the U.S. Internal Revenue Code.)
- Activities not in furtherance of tax-exempt purposes (You must verify that your organizing document doesn’t empower your organization to engage in activities outside of its tax-exempt purpose. See IRS Publication 557 for examples of acceptable language.)
- Dissolution clause (You must verify that your organizing document includes a 501(c)(3)-compliant dissolution clause. See IRS Publication 557 for examples of acceptable language.)
- Your Specific Activities
- Planned activities (In no more than 255 words, you must describe your organization’s mission and its most significant planned activities. Access the IRS’ Instructions for Form 1023-EZ to see examples of approved and rejected language.)
- National Taxonomy of Exempt Entities (NTEE) Code (You also must provide the NTEE Code that best matches your organization’s purpose. You can find a list of NTEE Codes on page 21 of the IRS’ Instructions for Form 1023-EZ.)
- Exempt purpose: (You must select your organization’s purpose from these options: charitable, religious, educational, scientific, testing for public safety, fostering national or international amateur sports competition, or prevention of cruelty to children or animals.)
- Prohibited activities (You must confirm your organization will refrain from prohibited or restricted activities. Nonprofits must:
- Refrain from supporting or opposing candidates in political campaigns in any way.
- Ensure that net earnings do not inure in whole or in part to the benefit of private shareholders or individuals, such as board members, officers, key management employees, or other insiders.
- Not further non-exempt purposes, such as purposes that benefit private interests, more than insubstantially.
- Not be organized or operated for the primary purpose of conducting a trade or business that is unrelated to exempt purposes.
- Not devote more than an insubstantial part of activities to attempting to influence legislation.
- Not provide commercial-type insurance as a substantial part of activities.)
- Activities aimed at influencing legislation (You must indicate if your organization has attempted to influence legislation or plans to do so in the future.)
- Compensation plans (You must indicate if your organization plans to pay or compensate your nonprofit’s directors, trustees, or officers.)
- Donation of funds (You must indicate if your organization has donated — or plans to donate — funds to individuals or pay for their expenses. This could include setting up a scholarship for one of your donor’s children or paying for a donor’s personal expenses. This section does not include reimbursement of employee expenses.)
- Activities conducted outside of the United States (You must indicate if your organization has — or plans to — conduct activities outside of the country or provide grants or assistance to individuals or organizations outside of the United States.)
- Financial transactions (You must indicate if your organization has — or plans to — engage in any kind of financial transactions with any of your nonprofit’s trustees, directors, or officers or any entities they control or own.)
- Unrelated income (You must indicate if your organization has received — or plans to receive — unrelated business income totaling more than $1,000 in a tax year.)
- Gaming activities (You must indicate if your organization has hosted — or plans to host — charitable gaming of any kind, such as bingo, raffles, etc.)
- Disaster relief (You must indicate if your organization has provided — or plans to provide — disaster relief.)
- Foundation Classification
- In this section, you must select the statement that corresponds to the classification that correctly applies to your organization. (Read more about how to accurately complete this section on pages nine to 11 of the IRS’ Instructions for Form 1023-EZ.)
- To qualify as a public charity, one of these statements must apply to your organization:
- It normally receives at least one-third of its support from public sources or normally receives at least 10 percent of its support from public sources and it has other characteristics of a publicly supported organization. [Source: Sections 509(a)(1) and 170(b)(1)(A)(vi)]
- It normally receives more than one-third of its support from a combination of gifts, grants, contributions, membership fees, and gross receipts (from permitted sources) from activities related to its exempt functions and normally receives not more than one-third of its support from investment income and unrelated, taxable business income. [Source: Section 509(a)(2)]
- It operates for the benefit of a college or university that’s owned or operated by a governmental unit. [Source: Sections 509(a)(1) and 170(b)(1)(A)(iv)]
- If one of the three statements above doesn’t accurately describe your organization, your organization will be classified as a private foundation.
- Reinstatement After Automatic Revocation
- This section only applies to organizations that have had their exempt status automatically revoked under Section 6033(j)(1) for failure to file required annual returns or notices for three consecutive years and are now applying for reinstatement under Section 4 or 7 of Rev. Proc. 2014-11, 2014-3 I.R.B. 411.
- Because this will be your organization’s first time applying for 501(c)(3) status, you may skip this section.
- Electronic Signature
- The last section of the form requires applicants to read the perjury statement and electronically sign the box.
Register for a Pay.gov Account
Once you gather all the information outlined above, it’s time to register for your Pay.gov account by following these three steps:
- Visit https://www.pay.gov/public/registration.
- Click “Create a company account.”
- Fill in the required information to create an account for your organization.
Complete Form 1023-EZ Online
When you’re ready to complete Form 1023-EZ online, follow these four steps:
- Visit https://www.pay.gov/public/home.
- Click “Apply for IRS 1023-EZ.”
- Ensure you sign in to the website.
- Click “Continue to the form.”