Frequently Asked Questions: Form 1023

Organizational leadership can learn more about these topics and the benefits, limitations and expectations of tax-exempt organizations by attending 10 courses at the online Small to Mid-Size Tax Exempt Organization Workshop.

General Information - Part I

  1. What is included in the Form 1023 package?
  2. Must an organization obtain an employer identification number to apply for exemption?
  3. Can an organization use a "mailing address" on its application?
  4. What requirements apply if an organization will be represented by an attorney or other authorized representative?
  5. Why does Form 1023 ask for information about payments to third parties for assistance in creating the organization?
  6. Why does Form 1023 request a fax number and e-mail address?
  7. Does it matter if an organization is formed in a country other than the United States?
  8. Can you modify the fillable portion of the Form 1023 electronic file so we can add the phrase "see attachment"?

Organizational Structure and Organizing Documents

Narrative of Activities

  1. What activities should be described in Part IV of Form 1023?
  2. How much detail should be provided in the narrative description of activities?

Compensation and Other Financial Arrangements with Officers, Directors, Trustees, Employees, and Independent Contractors

  1. Why does Form 1023 request detailed information about compensation and other financial arrangements with officers, directors, trustees, employees, and independent contractors?
  2. What information must be submitted about compensation of key individuals?
  3. What type of information is expected to be provided when describing the “qualifications” and “duties” of officers, directors, trustees, five highest compensated employees, and five highest compensated independent contractors?
  4. What is the purpose of the conflict of interest policy?
  5. Are bonuses provided through retirement plans considered non-fixed payments?
  6. What does an organization that does not pay compensation report in Part V?

Members and Individuals/Organizations that Receive Benefits

  1. Why does Form 1023 request detailed information about an organization's members and other individuals and organizations that receive benefits from it?
  2. What information must be submitted about benefits to members and other individuals/organizations that receive benefits from an organization?

Organization's History

  1. Why does Form 1023 ask for information about successor organizations?
  2. Why does Form 1023 ask for information about an organization applying more than 27 months after the month it was legally formed?

Specific Activities

  1. What is the purpose of the questions about specific activities in Part VIII of Form 1023?
  2. How far in the future do we need to project fundraising efforts?
  3. Must organizations report contracts for fundraising activities with their own employees?
  4. What is the purpose of asking about fundraising efforts in states and local jurisdictions, including whether efforts are for the applicant or another organization?
  5. How far reaching is the question about whether an organization has a close connection with any organizations?
  6. Part VIII, Question 10, asks about intellectual property. This question is very broad - as written, it could include even a charity's brochures or donor list. What do you want?

Financial Data

  1. Why does Form 1023 request detailed financial data about an organization applying for exemption?
  2. What financial data is requested by Form 1023?
  3. For what periods must the Statement of Revenue and Expenses in Part IX be completed?

Public Charity Status

  1. What information is requested in Part X of Form 1023?
  2. What is an advance ruling of public charity status?

Signature Block and User Fee Information

  1. How much is the user fee for an exemption application?
  2. How can the user fee for an exemption application be paid?
  3. What are the signature requirements?
  4. May an authorized representative sign Form 1023?

Processing Applications

  1. How can my application for tax-exempt status be expedited?

Additional Information