The Internal Revenue Service determines whether a nonprofit organization qualifies for 501(c) (3) status. 501 (c) (3) ensures the organization tax exemption status. The organizations that fall under this category are usually nonprofits such as private foundations, public charities, nonprofit corporations, and trusts.
The first step is to determine whether you qualify for 501 (c) (3) statuses. The organization must be organized and used exclusively for religious purposes, educational purposes, cruelty against children and animals, amateur sports competition, charitable purposes, or scientific purposes.
The organization should begin by requesting an EIN (employee identification number) from the Internal Revenue Service by applying through the Internal Revenue Service website or by telephone at the number on the Internal Revenue Service website, www.irs.gov.
After the nonprofit organization has applied for the employee identification number, the application for exempt status can begin. The organization must be set up as a trust, a corporation, or an association in order to apply with the Internal Revenue Service for 501 (c) (3) exempt status. The organization must have an exempt purpose that is specifically stated and have been operating for at least three tax years. Information that details exempt purposes can be found on the IRS website.
If the organization fits the first two criteria, being a trust, a corporation, or an association and has an acceptable purpose the organization can then apply by filing form 1023 (Application for Recognition of Exemption) which must be filled out in its entirety, signed, and dated. The nonprofit organization must attach copies of its organizing documents and financial statements for three years. The financial statements required are for the current year in which the organization is applying and the two years that precede the current year. Organizing documents are the legal documents filed in the home state of the organization that determine whether the organization is a corporation, a trust, or an association as well as information describing the organization, the organizations purpose, and the hierarchy of people and officers working for the organization.
When the application is completed and all documents attached are in order and the correct filing fee is paid by check or money order and made out to the United States Treasury, it can be filed with the Internal Revenue Service. The filing fee can be found on www.irs.gov. The address to send the application with all of the attachments and the filing fee is:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192
Please check The IRS website for any changes to the procedures. This is simply a guide to help you begin the process.