501(c)(3) Application Supporting Documents Checklist

501(c)(3) Application Supporting Documents Checklist

Organization Name: [________________________________]
EIN: [________________________________]
State of Incorporation: [____]
Date of Formation: [__/__/____]
27-Month Deadline (if seeking retroactive exemption): [__/__/____]
Form to be Filed: ☐ Form 1023 (Full) ☐ Form 1023-EZ (Streamlined)
Responsible Attorney/Preparer: [________________________________]

IMPORTANT: Organizations must apply electronically via pay.gov. The user fee is $600 for Form 1023 and $275 for Form 1023-EZ (as of 2025). If filed within 27 months of formation, the effective date of exemption is the date of formation. If filed after 27 months, exemption is effective only from the date of application (unless Schedule E exception applies).

STEP 1: DETERMINE WHICH FORM TO FILE

Form 1023-EZ Eligibility Checklist

Form 1023-EZ may be used only if ALL of the following conditions are met:

• ☐ Projected annual gross receipts will not exceed $50,000 in each of the next 3 years.
  (Note: Some sources reference $250,000 total asset threshold — confirm with current IRS eligibility worksheet)

• ☐ Total assets do not exceed $250,000 (including all cash, property, equipment, and investments).

• ☐ Organization is NOT any of the following (these must use full Form 1023):
• ☐ NOT a church, church-affiliated organization, or association of churches
• ☐ NOT a school, college, or university
• ☐ NOT a hospital or medical research organization
• ☐ NOT a supporting organization under IRC § 509(a)(3)
• ☐ NOT a private operating foundation
• ☐ NOT organized or formed outside the United States
• ☐ NOT a successor to a for-profit entity
• ☐ NOT currently revoked and seeking reinstatement (with exceptions)

If any box above is checked, organization must use Form 1023 (full application).

Form 1023-EZ Note: Unlike Form 1023, Form 1023-EZ does not require submission of articles of incorporation, bylaws, or financial statements with the application. However, the organization must attest under penalty of perjury that required provisions exist in its governing documents. The IRS may later request documentation. Errors on Form 1023-EZ can result in revocation of exempt status.

STEP 2: REQUIRED ORGANIZING DOCUMENTS

2.1 Articles of Incorporation (or Equivalent)

• ☐ Certified/file-stamped copy from Secretary of State (or equivalent state office).
• ☐ Verify articles contain REQUIRED PURPOSE CLAUSE — must limit activities to one or more purposes described in IRC § 501(c)(3): charitable, religious, educational, scientific, literary, testing for public safety, fostering national/international amateur sports, or prevention of cruelty to children or animals.

Acceptable Purpose Clause Language (IRS Model):

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

• ☐ Verify articles contain REQUIRED DISSOLUTION CLAUSE — upon dissolution, remaining assets must be distributed to one or more § 501(c)(3) organizations or to a government entity for a public purpose.

Acceptable Dissolution Clause Language (IRS Model):

"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 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."

• ☐ Confirm articles do NOT contain any clause permitting assets to be distributed to members, directors, officers, or private individuals (other than for reasonable compensation for services).
• ☐ Attach all amendments to articles, each with filing evidence.

2.2 Bylaws

• ☐ Adopted bylaws signed by initial board of directors (with date of adoption).
• ☐ Include all amendments with dates.
• ☐ Bylaws should address (IRS will review):
• ☐ Mission/purpose statement
• ☐ Membership structure (if applicable)
• ☐ Board composition, terms, and election procedures
• ☐ Officer roles and responsibilities
• ☐ Meeting requirements (quorum, notice)
• ☐ Conflict of interest disclosure procedures
• ☐ Fiscal year
• ☐ Amendment procedures
• ☐ Dissolution procedures consistent with articles

2.3 Employer Identification Number (EIN)

• ☐ IRS EIN confirmation letter (Form SS-4 confirmation or CP575 notice).
• ☐ Organization must have an EIN before filing — apply at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.

STEP 3: GOVERNANCE AND POLICY DOCUMENTS

3.1 Required and Strongly Recommended Policies

• ☐ Conflict of Interest Policy (IRS strongly recommends; Form 990 Part VI asks whether policy exists). Include annual disclosure statements signed by all board members.
• ☐ Whistleblower Policy (IRS strongly recommends; Form 990 Part VI inquiry).
• ☐ Document Retention and Destruction Policy (IRS strongly recommends; Form 990 Part VI inquiry).
• ☐ Compensation Approval Process documentation (required if paying compensation to officers, directors, or key employees — document comparability data and approval by disinterested board members per Treas. Reg. § 53.4958-6).

3.2 Board of Directors Information

• ☐ List of all current directors and officers: full legal name, mailing address (not organization's address), title, hours per week devoted to organization, compensation (or "None").
• ☐ Biographical information or resumes (particularly relevant for Part IV narrative and Part V compensation disclosure).
• ☐ Signed consents to serve (recommended).

3.3 Organizational Chart

• ☐ Organizational chart showing reporting structure (required in Part II of Form 1023 if organization has multiple chapters, affiliates, or a complex structure).

STEP 4: NARRATIVE DESCRIPTION OF ACTIVITIES (FORM 1023 PART IV)

This is the most important section of Form 1023. The IRS uses the narrative to determine whether the organization meets the operational test under Treas. Reg. § 1.501(c)(3)-1.

• ☐ Prepare detailed narrative describing each program activity — past, present, and planned.
• ☐ For each activity, include:
• ☐ Description of activity and how it furthers the § 501(c)(3) purpose
• ☐ Who benefits (must be a charitable class — not private individuals)
• ☐ When and where activity takes place
• ☐ How activity is conducted (staff, volunteers, contractors)
• ☐ Estimated percentage of time/resources devoted to the activity
• ☐ Address any activities that may raise private benefit concerns (e.g., activities benefiting specific individuals or businesses).
• ☐ Address fundraising activities: methods used, geographic areas, professional fundraisers engaged.
• ☐ Address any foreign activities: countries, funds transferred, agents/distributees, oversight procedures.
• ☐ Address any gaming activities (bingo, raffles) — may trigger additional reporting.
• ☐ Address any grants or assistance to individuals — must include selection criteria, application procedures, objective standards.

STEP 5: COMPENSATION DISCLOSURE (FORM 1023 PART V)

• ☐ List compensation for all officers, directors, trustees, highest-paid employees, and highest-paid independent contractors.
• ☐ For each compensated person: name, title, hours/week, annual compensation (or estimated compensation), benefits, and expense allowances.
• ☐ Describe the compensation approval process: Who determines compensation? Is there a compensation committee? What comparability data is used?
• ☐ List all family or business relationships between any directors, officers, key employees, or contractors.
• ☐ Disclose any loans, leases, purchases, or business arrangements with insiders.
• ☐ Disclose any transactions with businesses owned or controlled by organization insiders.

Private Inurement Warning: IRC § 501(c)(3) prohibits any of the organization's net earnings from inuring to the benefit of any private shareholder or individual. Excess compensation or below-market transactions with insiders may constitute excess benefit transactions subject to excise taxes under IRC § 4958.

STEP 6: FINANCIAL DATA (FORM 1023 PART IX)

6.1 For Existing Organizations (Operating 4+ years)

• ☐ Actual financial statements for the most recent 4 completed fiscal years.
• ☐ Balance sheet (statement of financial position) for most recent year.

6.2 For New or Young Organizations (Operating Less Than 4 Years)

Provide financial statements for all prior years AND projected budgets:

• ☐ Revenue broken down by source: contributions/grants, program service revenue, investment income, other.
• ☐ Expenses broken down by function: program services, management/general, fundraising.
• ☐ For projections: include narrative explanation of assumptions.

STEP 7: PUBLIC CHARITY STATUS DETERMINATION (FORM 1023 PART X)

• ☐ Identify the public charity classification that applies to your organization:
• ☐ 509(a)(1) with 170(b)(1)(A)(vi) — organizations that normally receive a substantial part of support from government and/or general public (public support test: at least 33.33% from qualifying sources, or facts-and-circumstances test)
• ☐ 509(a)(1) with 170(b)(1)(A)(i) — church
• ☐ 509(a)(1) with 170(b)(1)(A)(ii) — school
• ☐ 509(a)(1) with 170(b)(1)(A)(iii) — hospital or medical research organization
• ☐ 509(a)(2) — organizations that normally receive more than 33.33% from exempt function income plus contributions, and not more than 33.33% from investment income and unrelated business income
• ☐ 509(a)(3) — supporting organization (type I, II, or III — requires additional disclosures)
• ☐ New organization may request advance ruling for first 5 years

STEP 8: SCHEDULE APPLICABILITY

Determine which schedules apply and complete them:

STEP 9: STATE TAX EXEMPTION APPLICATIONS

Federal 501(c)(3) status does NOT automatically grant state income or sales tax exemption. Apply separately in each state where the organization operates.

• ☐ Identify all states where organization will solicit donations (multi-state charitable solicitation registration may also be required — check with state Attorney General offices).

STEP 10: SUBMISSION AND FOLLOW-UP

• ☐ Complete Form 1023 (or 1023-EZ) electronically at pay.gov.
• ☐ Pay correct user fee: $600 (Form 1023) or $275 (Form 1023-EZ).
• ☐ Label all attachments clearly with the Part and line number of Form 1023 to which they correspond.
• ☐ Print and retain complete copy of submitted application.
• ☐ Retain IRS submission confirmation number.
• ☐ Monitor for IRS correspondence (IRS may issue information requests — respond within stated deadlines, typically 30 days).
• ☐ Upon receipt of IRS determination letter, retain permanently.
• ☐ Post IRS determination letter on organization website (recommended for donor confidence).

Common Rejection Reasons — Avoid These:

• ☐ Articles of incorporation lack required purpose clause or dissolution clause
• ☐ Narrative description of activities is too vague or does not demonstrate § 501(c)(3) purpose
• ☐ Activities primarily benefit private individuals rather than a charitable class
• ☐ Compensation arrangements appear excessive without documented comparability data
• ☐ Private benefit or private inurement concerns not addressed
• ☐ Political campaign activity described or implied (prohibited under § 501(c)(3))
• ☐ Substantial legislative lobbying activities described without 501(h) election contemplation
• ☐ Financial projections show revenue primarily from non-charitable activities

Sources and References

• IRS Form 1023 Instructions (Rev. December 2024): https://www.irs.gov/instructions/i1023
• IRS Form 1023-EZ Instructions (Rev. January 2025): https://www.irs.gov/pub/irs-pdf/i1023ez.pdf
• IRS About Form 1023: https://www.irs.gov/forms-pubs/about-form-1023
• IRS Tax Exempt Organization Search: https://apps.irs.gov/app/eos/
• Treas. Reg. § 1.501(c)(3)-1 (organizational and operational tests)

This checklist is for informational and organizational purposes. Requirements vary based on organizational type and state. Consult qualified nonprofit legal counsel and a certified public accountant with nonprofit experience before filing.