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Applying for Exemption/Misc. Determination: Sample Questions

Organizational and Administrative Requirements

Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic. 

Penalties of Perjury Declaration:

1. Include the following declaration with your response, signed and dated by an officer, director, trustee, or other governing body member (not an authorized representative). You can sign and date the statement below or reproduce it in the body of your signed response. The declaration must accompany responses per Revenue Procedure 2013-4 (updated annually).  

Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for the information, and such facts are true, correct, and complete.

Articles of Incorporation or Amendment from State Website - Sending to Organization  

[Instruction: Do not list as a numbered item on additional information request as no response is required.]

2. For Informational Purposes Only: Enclosed is a copy of your [Articles of Incorporation/Articles of Amendment], which we obtained from the website of your state of incorporation. We made this copy part of your file, and it will be available for public inspection as part of your application if you are granted exemption. Please notify us immediately if the enclosed copy does not regard your organization.

Organizing Document Missing or Not Filed/Signed

3. Please submit a complete copy of your original organizing document and any amendments that show proof of filing or adoption.

  • If you are a corporation, your Articles of Incorporation (and all amendments) must show proof of filing with your state of incorporation. We cannot accept a copy that only indicates it was sent to or received by the state.
  • If you are an unincorporated association, your Articles of Association, Constitution, or other creating document and any amendments must show the specific date they were adopted and must be signed by more than one person. You can submit a declaration or other evidence of adoption, signed and dated by at least two officers or directors, if an original signed copy is not available.
  • If you are a trust, your trust agreement and any amendments must be signed and dated by your trustee(s) and properly executed according to the laws of your state. The exact date and amount of funding should also be clearly indicated or submitted.

Amendment Is or May Be Required to Meet Internal Revenue Code 501(c)(3) Organizational Test

[Instruction: Select Option A, B, C, or D (A, B, and C require additional text under Include with A, B, and C).]

Option A. Need to amend purpose clause:

4A. The language of your organizing document does not sufficiently limit your purposes to those specifically described in Section 501(c)(3), as required for tax exemption as an organization described under Section 501(c)(3). Therefore, your organizing document must be amended. We suggest you use the following language:

Said organization is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations described under Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code. 

Option B. Need to amend dissolution clause:

4B. The language of your organizing document does not permanently dedicate your assets to purposes specifically described in Section 501(c)(3) as required for tax exemption as an organization described under Section 501(c)(3). Therefore, your organizing document must be amended. We suggest you use the following language:

Upon the dissolution of the organization, assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, or 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. Any such assets not disposed of shall be disposed of by a court of competent jurisdiction in the county in which the principal office of the organization is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

Option C. Need to amend purpose and dissolution clause:

4C. The language of your organizing document does not sufficiently limit your purposes to those specifically described in Section 501(c)(3) or permanently dedicate your assets to purposes specifically described in Section 501(c)(3) as required for tax exemption as an organization described under Section 501(c)(3). Therefore, your organizing document must be amended. We suggest you use the following language:

Said organization is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations described under Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code. 

Upon the dissolution of the organization, assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, or 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. Any such assets not disposed of shall be disposed of by a court of competent jurisdiction in the county in which the principal office of the organization is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

Include with Option A, B, and C

Submit a copy of the amendment.

  • If you are a corporation, your amendment must show proof of filing with your state of incorporation. We cannot accept a copy that only indicates it was sent to or received by the state. You may want to contact your state of incorporation for information on how to file the amendment.
  • If you are an unincorporated association, your amendment must show the specific date it was adopted and must be signed by two officers or directors.
  • If you are a trust, your amendment must be signed and dated by a trustee and properly executed according to the laws of your state.  

Option D. If it is unknown whether an amendment is required:

4D. Please review your organizing document(s). If your organizing document does not sufficiently limit your purposes to those specifically described in Section 501(c)(3) or permanently dedicate your assets to purposes specifically described in Section 501(c)(3) as required for tax exemption as an organization described under Section 501(c)(3), your organizing document must be amended. Note: organizations incorporated in certain states may rely on operation of state law for the dissolution provision. Please see the instructions to Form 1023 for a list of states where this applies. We suggest you use the following language:

Purpose:

Said organization is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations described under Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code.

Dissolution:

Upon the dissolution of the organization, assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, or 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. Any such assets not disposed of shall be disposed of by a court of competent jurisdiction in the county in which the principal office of the organization is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

If you amend your organizing document, submit a copy of the amendment.

  • If you are a corporation, your amendment must show proof of filing with your state of incorporation. We cannot accept a copy that only indicates it was sent to or received by the state. You may want to contact your state of incorporation for information on how to file the amendment.
  • If you are an unincorporated association, your amendment must show the specific date it was adopted and must be signed by two officers or directors.
  • If you are a trust, your amendment must be signed and dated by a trustee and properly executed according to the laws of your state.

Testamentary Trust – Date of Death

5. Please submit a copy of the testator’s death certificate or a statement indicating the date of death.

Trust Funding Date

6. Please confirm the exact date your trust was funded.  

Note: Generally, a trust must be funded with property, such as money, real estate, or personal property, to be legally created. An organization cannot be recognized as exempt prior to its legal creation.  

Trust - Final Date of Non-charitable Beneficiary Distribution

7. Please confirm the date the final non-charitable beneficiary received his/her/its distribution.  

Note: If your trust agreement continues to provide for non-charitable interests, you will not qualify for tax-exempt status.

Corporation Not in Good Standing with State

8. The website of your state of incorporation indicates you are not in good corporate standing with the state. Prior to receiving a determination, your corporation must be in good standing. Therefore, please contact state officials to clarify your status. Then provide us with proof that your corporation is currently in good standing.  

Articles of Incorporation Authorize Shares of Stock or Refer to Stock

9. Your Articles of Incorporation indicate you are authorized to issue shares of stock or reference stock provisions. Nonprofit organizations do not ordinarily issue stock.

  • If you do not issue shares of stock, please amend your Articles of Incorporation to remove all references to stock. Submit a copy of your amendment which shows proof of filing with your state of incorporation. We cannot accept a copy that only indicates it was sent to or received by the state. You may want to contact your state of incorporation for information on how to file the amendment.
  • If you have already issued shares of stock, please provide details on the stock arrangement, including all rights the holders of your stock have.
  • If you do not agree to amend your Articles of Incorporation, please submit a statement signed by an officer or director explaining your stock provisions in detail.

501(c)(3) or 501(c)(4) Corporation Formed as Mutual Benefit Corporation

10. You are incorporated as a mutual benefit corporation. A mutual benefit corporation is a corporation typically formed to serve a limited number of members. A public benefit corporation is a corporation formed to benefit the general public.

a. If you formed as a mutual benefit corporation in error, please file an amendment to your 
   Articles of Incorporation to change to a public benefit corporation. Submit a copy of your 
   amendment which shows proof of filing with your state of incorporation. We cannot 
   accept a copy that only indicates it was sent to or received by the state. You may want to 
   contact the state for information on how to file the amendment.

b. If you are granted exemption, your date of exemption will be the date that you become a 
    public benefit corporation. If you agree, please read, sign, and submit the following 
   declaration: We agree with the conclusion of the IRS concerning the effective date of our 
   exempt status as an organization described under Section 501(c)([X]) of the Code. We 
   also agree that from the date we originally incorporated through the date prior to the day 
   we are reorganized as a public benefit corporation, we did not qualify for recognition of 
   exemption as an organization described under Section 501(c)([X]) [and that contributions 
   during this period are not deductible under Section 170 of the Code].

c. If you did not form as a mutual benefit corporation in error, explain your position.

Bylaws Missing

11. You indicated in your application that you adopted bylaws. Please submit a copy. If you do not have bylaws, explain how you select members of your governing body.

Bylaws Not Adopted

12. You indicated in your application that you have not adopted bylaws. Please explain how you select members of your governing body.

Stock in Bylaws

13. Your bylaws include references to stock, shareholders, and other similar terms. Since nonprofit organizations do not ordinarily issue stock, it appears you may have done so in error.

a. If so, please amend your bylaws to remove all references to stock, shareholders and 
   other similar terms and submit a complete copy of the amended document that shows the 
   date of adoption and is signed by two officers or directors.

b. If you have already issued shares of stock, please provide details on the ownership 
   arrangement.

c. If you do not agree to amend your organizing document, please submit a statement signed 
    by an officer or director explaining your stock provisions.

Board Member Comprehensive List of Terrorists and Groups (CLTG) Match Name or Address  

14. For each of your current officers, directors, and/or trustees, please provide résumés which include employment and address history for the past three years.

Application Signature Missing or Not Authorized Person

[Instruction: Select Option A or B (both options use second paragraph).]

Option A

15A. The individual who signed page [1/12] of your Form [1024/1023] application is not listed as a current officer, director, trustee or other governing body member in your application.  

Option B

15B. Your application was not signed.

Please have one of your current officers, directors, trustees, or other individuals who comprise your governing body print, sign, and date next to the heading “Please Sign Here” on page [1/12] of your Form [1024/1023] application. The individual who signs your application should be listed as a governing body member in your application. If the individual is not listed in your application, submit a revised list of your governing body members or a statement to that effect, signed by someone listed as such in your application. An individual with Power of Attorney may not sign the application unless that individual is also a member of your governing body.

Fiscal Year End Missing or Unclear

16. The end of your accounting year is unclear in your application. Please confirm the month your annual accounting period ends.  

List of Board Members Missing from Application

17. Please provide a complete list of the names, titles, and mailing addresses of your current officers, directors, trustees, or other individuals who comprise your governing body. If these individuals are or will be compensated, provide the amounts they do or will receive. If the list you are providing does not include the individual who signed your Form [1024/1023] application, please have an individual who is identified on the list sign page [1/12] of your application.

Board Meeting Minutes

18. Please submit all board meeting minutes for the current and past year.

Board Relationships Need to be Clarified

19. [It appears/You indicated] two or more of your officers [may be/are] related to each other through family or business relationships. Please identify the individuals and explain the relationship(s).  

Primary Contact

20. Please provide the name and daytime phone number of an officer, director, trustee, or other governing body member we can contact during business hours, Monday through Friday.

Invalid Form 2848 – Page 2 Not Complete

21. Form 2848, Power of Attorney and Declaration of Representative, as submitted with your application is invalid. If you would like us to be able to communicate with your representative, please make sure that the top and bottom of page 2 are complete including signatures and dates.

Invalid Form 2848 – Tax Matters Not Correct

22. Form 2848, Power of Attorney and Declaration of Representative, as submitted with your application is invalid. If you would like us to be able to communicate with your representative, you must complete Item 3, Tax Matters, to reflect the information relating to the application you submitted. Note: Please see Form 2848 Instructions Part 1, Line 3, for more information on how to complete the form.

Invalid Form 2848 – Submitted for Unenrolled Preparer

23. If you want an unenrolled return preparer to receive copies of correspondence we send to you, complete and submit Form 8821, Tax Information Authorization. Please note that unenrolled preparers generally may only receive copies of correspondence and are not valid representatives on Form 2848, Power of Attorney and Declaration of Representative, for exempt status determination purposes.

990 Filing Exception Claimed, Specific Exception Requesting Unclear

24. You claim to be excused from filing Form 990 if you are granted exemption. Most organizations are required to file Form 990, 990-EZ, 990-N, or 990-PF; therefore, describe the specific filing exception you meet. You can find additional information about filing requirements and exceptions on our website at www.irs.gov/Charities-&-Non-Profits under Annual Reporting & Filing.

Missing Schedule X  

25. Please complete Schedule [X, Full or Abbreviated Name of Schedule], of Form 102[X], including all required attachments and explanations.  

Incomplete Schedule X

26. You submitted Schedule [X]. Questions on Schedule [X] ask for specific explanations and attachments, which were not all included with your application. Please review Schedule [X] and submit [all missing explanations and attachments.*]

[Instruction: *Insert specific items needed if most information previously submitted.]

Subsection Not Specified (Form 1024)

27. You did not identify the subsection under which you are applying for recognition of exemption. Based on the information submitted, it appears you may qualify under Internal Revenue Code Section 501(c)([X]) as a [description of subsection from page 1 of Form 1024, e.g., social club]. You can find additional information about Form 1024 and the various subsections on our website, www.irs.gov/Charities-&-Non-Profits, and in Publication 557, Tax-Exempt Status for Your Organization, at www.irs.gov/Forms-&-Pubs.  

If you agree, provide a written statement requesting consideration under Section 501(c)([X]) [and complete and submit Schedule {X} of Form 1024]. If you want to request consideration under a different subsection, submit a statement identifying your requested subsection along with the applicable schedule of Form 1024.

 

More information:

See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.

 

Page Last Reviewed or Updated: 16-Dec-2014