Section 501(c)(3) Applications

Even if you have a successful nonprofit operation going on within your community, you just can’t proclaim yourself as a tax-exempt organization. Like many other things leading to a classification or a title, there is a process that has to occur. Think about it… your nonprofit didn’t spring up overnight; it took a process and is probably still in progress. 

The success of your organization definitely is a process; one of the things you have to figure out is what works and what doesn’t work. To begin the process of becoming a tax-exempt organization, you have to complete and a file a section 501(c)(3) application.

A section 501(c)(3) application, also known as Form 1023, is required from organizations that are applying for exempt recognition from federal income tax. If your organization is approved, the IRS sends you written confirmation of your tax-exempt status, and its qualifications for tax-deductible, charitable contributions.

A Form 1023 is listed as the Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. You can obtain tax exemption by filing a Form 1023. Your organization must follow the two key requirements in order to be exempt from federal income tax.

Requirement #1
Your organization must be organized as a corporation, trust, or an unincorporated association with documents specifying your purpose, and assets that are permanently dedicated to exempt purposes.

Requirement #2
Your organization must operate to fulfill one or more exempt purposes that’s listed in its documents.

If you’re tax-exempt under section 501(c)(3), you’re normally recognized as a charitable organization. And your organization will be classified further as either a public charity or a private foundation.