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What is Form 1023?

IRS Form 1023, or in other words, the Application for Recognition of Exemption, is a tax form furnished by non-profit organizations that are used to apply for a tax exempt status.

This means an organization claims itself as a charity or a private foundation. This status has to be declared by the Internal Revenue Service.

When completed, such organizations are no longer required to pay federal income taxes.

The form is used in order to determine if an establishment is eligible to get a tax exempt status, in accordance with section 501(c)(3), Title 26 of the United States Tax Code.

This section covers organizations engaged in religion, education, charity, science, literature, public safety, sports, prevention of cruelty to animals, child safety, etc.

Other types of establishments that can file this form fall under sections 501(e), 501(f), 501(k), 501(n).

How can I Complete Tax Form 1023?

The whole document is relatively long; it’s comprised of 28 pages and divided into 11 parts (Schedules A-H).

It has to include the following:

  1. Part 1 Identification data of the applicant such as full name and address.
  2. Part 2 A checklist to prove the eligibility of the organization.
  3. Part 3 Proof that the organization’s documents contain the obligatory provisions.
  4. Part 4 Required files that should be attached.
  5. Part 5 List of the officers, directors, trustees employees and independent contractors, as well as their compensations represented in a table.
  6. Part 6 Checklist on benefits received from the applying organization.
  7. Part 7 Checklist of the company’s history.
  8. Part 8 A detailed list indicating specific activities of the organization.
  9. Part 9 Information on the financial state of the establishment which includes a table of revenue and expenses, as well as a balance sheet.
  10. Part 10 Provided information that will help to classify the organization.
  11. Part 11 Provided signatures and a fee paid.

The schedules are to be completed depending on the type of organization. They include the following:

  1. Schedule A - for churches;
  2. Schedule B - for educational institutions;
  3. Schedule C - for medicare establishments;
  4. Schedule D - for Section 509(a)(3) Supporting Organizations;
  5. Schedule E - for companies that don’t file Form 1023 after 27 months upon their formation;
  6. Schedule F - for institutions aimed at caring for the elderly and handicapped;
  7. Schedule G - for those who act as a successor of another organization;
  8. Schedule H - for foundations that provide educational scholarships, loans and grants.

In order for the applicant to keep track of all required materials when requesting the tax exempt status, there’s a checklist at the end of the blank. Also, the IRS gives 1023 Form instructions to make completing the form a more easy and stress-free process.