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How to Apply for 501 (c) 3

What is Section 501 (c)(3)

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.

Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.

Application Process: Step By Step

If you want to see an in-depth discussion of exemption requirements under section 501(a) of the Code, rather than going through a step-by-step analysis of an organization’s eligibility to apply for recognition of exemption from federal income taxation, see Types of Exempt Organizations or IRS Publication 557Tax Exempt Status For Your Organization. In addition,Publication 4220Applying for 501(c)(3) Tax-Exempt Status, is designed to help prospective charities apply for tax exemption under the tax law.

For the Internal Revenue Service (the IRS) to recognize an organization’s exemption, the organization must be organized as a trust, a corporation, or an association.

For the IRS to recognize an organization’s exemption, it must have an exempt purpose. See Types of Organizations or download Publication 557 for discussions of exempt purposes of the various types of tax-exempt organizations.

To be recognized as exempt, an organization must submit a completed, signed, and dated application with the appropriate user fee. If an organization is seeking recognition of exemption under section 501(c)(3) of the Code, it must complete and file Form 1023Application for Recognition of Exemption. Most other organizations must complete and file Form 1024Application for Recognition of Exemption Under Section 501@.

Download Form SS-4Application for Employer Identification Number, and its related instructions to learn how to obtain an EIN. You may also obtain an EIN via telephone, by calling 1-800-829-4933. You may also apply for an EIN on-line.

New organizations must give financial statements for the current year and proposed budgets for the next two years, including a detailed breakdown of revenue and expenses. A section 501(c)(3) organization provides this information on Part IX, Form 1023.

Attach Form 8718User Fee for Exempt Organization Determination Letter Request (required for applications other than those submitted on Form 1023), along with the appropriate user fee in a check or money order made payable to the United States Treasury in U.S. Dollars.  

If you plan on using a third party to represent you, then you also must complete a Form 2848 , Power of Attorney and Declaration of Representative, authorizing the individual to represent you.

You are now ready to submit the organization’s completed application to the following address:

Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192

Applications shipped by express mail or delivery service should be sent to:

Internal Revenue Service
201 W. Rivercenter Blvd.
Attn: Extracting Stop 312
Covington, Ky. 41011

 

This information was provided to you from www.irs.gov.  Find out more at http://www.irs.gov/charities/charitable/index.html