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Форма 1023 Інструкції

Інструкція по формуванню 1023, застосування для визнання викривлення під розділом 501(c)(3) внутрішнього коду доходів

Січень 2020

Пов'язані форми

  • Форма 1023 - Заява про визнання викупу за секцією 501(c)(3) Кодексу внутрішнього доходів
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Department of the Treasury  
Internal Revenue Service  
Instructions for Form 1023  
(Rev. January 2020)  
Application for Recognition of Exemption Under Section 501(c)(3) of the Internal  
Revenue Code  
Section references are to the Internal Revenue  
Contents  
Page  
How To Get Forms and  
Publications  
Code unless otherwise noted.  
Revenue Code Section  
Contents  
Page  
508(e) . . . . . . . . . . . . . . . . . . 27  
Internet. You can access the IRS website  
24 hours a day, 7 days a week, at IRS.gov  
to do the following.  
Appendix C: Glossary of Terms . . . . 29  
Future Developments . . . . . . . . . . . . 1  
Appendix D: National Taxonomy of  
What's New . . . . . . . . . . . . . . . . . . 1  
Exempt Entities (NTEE)  
Overview of Organizations  
Codes . . . . . . . . . . . . . . . . . 37  
Download forms, instructions, and  
Described in Section 501(c)  
Index . . . . . . . . . . . . . . . . . . . . . 40 publications.  
(3) . . . . . . . . . . . . . . . . . . . . . 1  
Order IRS products online.  
General Instructions . . . . . . . . . . . . . 2  
Answers . . . . . . . . . . . . . . . . . . . . 2  
Purpose of Form . . . . . . . . . . . . . . . 3  
What To File . . . . . . . . . . . . . . . . . 3  
When To File . . . . . . . . . . . . . . . . . 4  
Filing Assistance . . . . . . . . . . . . . . . 4  
Signature Requirements . . . . . . . . . . 4  
Note. Keep a copy of the completed  
Research your tax questions online.  
Search publications by topic or  
Form 1023 for your permanent records.  
keyword.  
Use the online Internal Revenue Code,  
Future Developments  
regulations, or other official guidance.  
For the latest information about  
View Internal Revenue Bulletins (IRBs)  
developments related to Form 1023 and  
published since 1995.  
Authorized Representative . . . . . . . . 4 its instructions, such as legislation  
enacted after they were published, go to  
Public Inspection . . . . . . . . . . . . . . . 4  
Foreign Organizations . . . . . . . . . . . 5  
Specific Instructions . . . . . . . . . . . . . 6  
Part I. Identification of Applicant . . . . . 6  
Part II. Organizational Structure . . . . . 6  
Profits to receive local and national tax  
news by email.  
Reminder  
Tax forms and publications. You can  
download or print all of the forms and  
publications you may need at IRS.gov/  
FormsPubs. Otherwise, you can go to  
IRS.gov/OrderForms to place an order  
and have forms mailed to you. You should  
receive your order within 10 business  
days.  
Don't include social security numbers  
on publicly disclosed forms. Because  
the IRS is required to disclose approved  
exemption applications and information  
returns, don't include social security  
numbers on this form. Documents subject  
to disclosure include supporting  
information filed with the form and  
correspondence with the IRS about the  
filing.  
Part III. Required Provisions in  
Your Organizing Document . . . . . 7  
Part IV. Your Activities . . . . . . . . . . . 8  
Part V. Compensation and Other  
Financial Arrangements . . . . . . 10  
Part VI. Financial Data . . . . . . . . . . 11  
Part VII. Foundation  
Classification . . . . . . . . . . . . . 13  
Overview of Organizations  
Described in Section  
501(c)(3)  
How To Request Recognition of  
Tax-Exempt Status Under  
Section 501(c)(3)  
Section 501(c)(3) describes organizations  
organized and operated exclusively for  
religious, charitable, scientific, testing for  
public safety, literary, or educational  
purposes, or to foster national or  
Part VIII. Effective Date . . . . . . . . . . 15  
Phone Help  
Part IX. Annual Filing  
Requirement . . . . . . . . . . . . . 15  
If you have questions and/or need help  
completing Form 1023, please call  
877-829-5500. This toll-free telephone  
service is available Monday through  
Friday.  
Part X. Signature . . . . . . . . . . . . . . 16  
Schedule A. Churches . . . . . . . . . . 16  
Schedule B. Schools, Colleges,  
and Universities . . . . . . . . . . . 17  
Schedule C. Hospitals and  
Email Subscription  
Medical Research  
Organizations . . . . . . . . . . . . . 18  
The IRS provides a subscription-based  
email service for tax professionals and  
representatives of tax-exempt  
Schedule D. Section 509(a)(3)  
Supporting Organizations . . . . . 20  
Schedule E. Effective Date . . . . . . . 21  
organizations. We send subscribers  
periodic updates regarding exempt  
organization tax law and regulations,  
available services, and other information.  
To subscribe, visit IRS.gov/Charities.  
international amateur sports competition,  
or for the prevention of cruelty to children  
or animals. Unless an exception applies,  
an organization must file Form 1023 or  
Form 1023-EZ (if eligible) to obtain  
Schedule F. Low-Income  
Housing . . . . . . . . . . . . . . . . 22  
Schedule G. Successors to Other  
Organizations . . . . . . . . . . . . . 22  
Schedule H. Organizations  
recognition of exemption from federal  
income tax under section 501(c)(3). You  
can find information about eligibility to file  
Form 1023-EZ at IRS.gov/Charities.  
Providing Scholarships,  
Fellowships, Educational  
Loans, or Other Educational  
Grants to Individuals and  
Private Foundations  
What's New  
Organizations requesting recognition of  
tax-exempt status under section 501(c)(3)  
must complete and submit their Form  
1023 (or Form 1023-EZ, if eligible)  
applications electronically (including  
paying the correct user fee) using  
Organizations not required to  
obtain recognition of exemption. The  
following types of organizations may be  
considered tax exempt under section  
501(c)(3) without filing Form 1023 (or  
Form 1023-EZ).  
Requesting Advance  
Approval of Individual Grant  
Procedures . . . . . . . . . . . . . . 22  
Appendix A: Sample Conflict of  
Interest Policy . . . . . . . . . . . . . 25  
Appendix B: States With Statutory  
Churches, including synagogues,  
Provisions Satisfying the  
Requirements of Internal  
temples, and mosques.  
Feb 03, 2020  
Cat. No. 17132z  
         
Integrated auxiliaries of churches and  
attempting to influence legislation or if it  
directly or indirectly participates or  
contribution deductions and attracting  
grants from private foundations. In order to  
be classified as a private operating  
foundation, an organization must meet  
certain support tests. Search for “private  
operating foundations” at IRS.gov for more  
information.  
conventions or associations of churches.  
Any organization that has gross  
intervenes in any political campaign on  
behalf of (or in opposition to) any  
receipts in each tax year of normally not  
more than $5,000. For more information  
on gross receipts exceptions, go to  
candidate for elective public office. These  
issues are described in more detail in the  
instructions for Part IV, lines 5 and 6.  
Even though these organizations aren't  
required to seek recognition of exemption,  
they may choose to file Form 1023 (or  
Form 1023-EZ, if eligible) to receive a  
determination letter stating they are  
recognized as exempt under section  
501(c)(3) status. The determination letter  
will also state whether an organization  
must file annual information returns or  
notices and will specify whether  
Key distinctions between public chari-  
ties and private foundations.  
Public Charities and Private  
Foundations  
Foundation classification is important  
because different tax rules apply to the  
operations of each entity. For more  
information on the different rules, see  
Every organization described in section  
501(c)(3) is classified as a private  
foundation unless it qualifies for one of  
the public charity exceptions. For some  
organizations, the primary distinction  
between a public charity and a private  
foundation is its sources of financial  
support.  
Foundation classification has  
contributions to that organization are tax  
deductible.  
nothing to do with the name of the  
TIP  
organization. Many organizations  
that aren't private foundations include the  
word “foundation” in their names.  
Public charities. The following section  
501(c)(3) organizations are classified as  
public charities.  
Requirements for Tax-Exempt  
Status Under Section 501(c)(3)  
To qualify for exemption under section  
501(c)(3), an organization must be  
organized and operated exclusively for  
one or more exempt purposes.  
Organizations that are public charities  
based upon their activities (without regard  
to their sources of support), such as  
churches, schools, hospitals, medical  
research organizations, and cooperative  
hospital service organizations and  
agricultural research organizations  
(sections 509(a)(1) and 170(b)(1)(A)(i),  
(ii), (iii), and (ix)).  
State Registration Requirements  
Tax exemption under section 501(c)(3) is  
a matter of federal law. After receiving  
federal tax exemption, an organization  
may also be required to register with one  
or more states where it holds assets or  
where it will solicit contributions. The  
organization may also need to seek  
exemption from state taxes. The National  
Association of State Charity Officials  
(NASCO) maintains a website that  
provides informational links to the various  
states for these purposes. It can be  
accessed at www.nasconet.org .  
Organized. An organization must be  
organized as a corporation, a limited  
liability company (LLC), an  
unincorporated association, or a trust.  
Its organizing document (corporate  
articles of incorporation, LLC articles of  
organization, articles of association or  
constitution of an unincorporated  
association, or trust agreement or  
declaration of trust) must limit the  
organization's purpose(s) and  
Organizations that normally receive  
substantial support from grants,  
governmental units, and/or contributions  
from the general public (sections 509(a)(1)  
and 170(b)(1)(A)(iv) and (vi)).  
Organizations that normally receive  
more than one-third of their support from  
contributions, membership fees, and  
gross receipts from activities related to  
their exempt functions, and not more than  
one-third of their support from gross  
investment income and net unrelated  
business income (section 509(a)(2)).  
permanently dedicate its assets to exempt  
purposes.  
General Instructions  
Social Security number. Don't enter  
social security numbers on this form or  
any attachments because the IRS is  
required to disclose approved exemption  
applications and information returns.  
Documents subject to disclosure include  
supporting information filed with the form  
and correspondence with the IRS related  
to the application.  
Operated. An organization described in  
section 501(c)(3) must be operated to  
further one or more of the exempt  
purposes stated in its organizing  
Organizations that support other public  
document. Certain other activities are  
prohibited or restricted, including, but not  
limited to, the following activities. A  
section 501(c)(3) organization must:  
charities (supporting organizations)  
(section 509(a)(3)).  
Organizations that test for public safety  
(section 509(a)(4)).  
Absolutely refrain from participating in  
Private foundations. Section 501(c)(3)  
organizations that don’t fit into any of the  
foundation classifications above are  
private foundations. Private foundations  
are further classified as nonoperating  
private foundations or private operating  
foundations (section 4942(j)(3)).  
the political campaigns of candidates for  
local, state, or federal office;  
“You” and “us.” Throughout these  
instructions and Form 1023, the terms  
“you” and “your” refer to the organization  
that is applying for tax-exempt status. The  
terms “us” and “we” refer to the IRS.  
Ensure its assets and earnings don’t  
unjustly enrich board members, officers,  
key management employees, or other  
insiders;  
Definitions. Terms in bold type in Form  
1023 are defined throughout these  
instructions and in Appendix C.  
Not further non-exempt purposes (such  
as purposes that benefit private interests)  
more than insubstantially;  
Nonoperating private foundations.  
Nonoperating private foundations  
generally accomplish their exempt  
purpose by making grants and don’t  
otherwise engage directly in charitable  
activities.  
Not operate for the primary purpose of  
Answers  
conducting a trade or business that isn’t  
related to its exempt purpose(s);  
Form 1023 asks you to answer a series of  
questions and provide information to  
assist us in determining if you meet the  
requirements for tax exemption under  
section 501(c)(3). Answer questions  
completely. If you believe you previously  
answered the question, you may refer to  
your previous answer.  
Not engage in activities that are illegal  
or violate fundamental public policy; and  
Limit its legislative activities.  
Private operating foundations. A  
private operating foundation actively  
conducts exempt programs. Private  
operating foundations are subject to more  
favorable rules than other private  
foundations in terms of charitable  
Legislative and political campaign in-  
tervention. Section 501(c)(3) denies  
exemption to an organization if a  
substantial part of its activities is  
Instructions for Form 1023  
-2-  
                     
Your answers must provide  
Eligibility Worksheet in the Instructions for  
Form 1023-EZ to determine if you're  
eligible to file Form 1023-EZ. You can visit  
IRS.gov/Charities for more information on  
application requirements.  
User fee amounts are listed in Rev.  
Proc. 2020-5, updated annually. For the  
current Form 1023 user fee, go to Rev.  
Proc. 2020-5, 2020-1 I.R.B. 241, at  
sufficient detail about your past,  
present, and planned activities to  
!
CAUTION  
demonstrate that you're described in  
section 501(c)(3). We won't be able to  
recognize you as tax exempt based on a  
mission statement (such as providing  
assistance to the poor) unless you also  
describe the activities that further  
Division. You can also call 877-829-5500.  
Leaving a group exemption. A  
subordinate organization under a group  
exemption can use Form 1023 to leave the  
group and obtain individual exemption. If  
you're a subordinate organization and  
wish to leave a group, you should notify  
your parent organization of your intention  
to leave the group ruling before filing Form  
1023.  
Group Exemption  
Don't use Form 1023 to apply for a group  
exemption. We may issue to a central  
organization a group exemption that  
recognizes on a group basis the  
accomplish your mission. We need to  
understand the specific activities you will  
undertake to accomplish your section  
501(c)(3) exempt purpose(s).  
exemption of subordinate organizations  
on whose behalf the central organization  
has applied. See Pub. 557 for information  
on how to apply for a group exemption.  
Financial data. Financial data, whether  
budgeted or actual, should be consistent  
with other information presented in your  
application.  
For example, if you're requesting public  
charity classification under one of the  
public support tests, your financial data  
should show contributions from the public  
or receipts from providing exempt  
services. Budgeted financial data should  
be prepared based upon your current  
plans. We recognize that your actual  
financial results may vary from the  
budgeted amounts.  
Application for Reinstatement  
of Exempt Status and  
What To File  
Retroactive Reinstatement  
All applicants, unless otherwise noted,  
must complete Parts I through X of Form  
1023, plus any required schedules and  
attachments.  
If your tax-exempt status was  
automatically revoked for failure to file a  
return or notice 3 consecutive years, you  
must apply to have your tax-exempt status  
reinstated. You must complete and submit  
Form 1023, including Schedule E (or, if  
eligible, Form 1023-EZ), and pay the  
appropriate user fee.  
The following organizations must  
complete additional schedules to Form  
1023.  
If your application is approved, your  
date of reinstatement will generally be the  
filing date of the application, unless you  
qualify for reinstatement of exemption  
retroactive to your date of automatic  
revocation. See Rev. Proc. 2014-11,  
2014-03 I.R.B. 411 for details, including  
additional requirements for retroactive  
reinstatement.  
THEN you  
must  
Past, present, and planned activities.  
Many items on Form 1023 are written in  
the present tense; however, base your  
answers on your past, present, and  
planned activities.  
complete  
Schedule  
IF you’re  
A church . . . . . . . . . . .  
A
A school, college, or  
Language and currency requirements.  
Prepare Form 1023 and attachments in  
English. Provide an English translation if  
the articles of organization, bylaws, or any  
other attachments are in any other  
language.  
Report financial information in U.S.  
dollars (specify the conversion rate used).  
Combine amounts from within and outside  
the United States and report the total for  
each on the financial statements.  
university . . . . . . . . . .  
B
C
A hospital or medical  
research organization . .  
Requesting Expedited Review  
We generally review applications for  
exemption in the order we receive them.  
We only expedite processing of an  
application where a written request  
presents a compelling reason for  
processing the application ahead of  
others. This does not mean your  
application will be immediately approved  
or denied. Circumstances generally  
warranting expedited processing include  
the following.  
A section 509(a)(3)  
supporting  
organization . . . . . . . .  
D
Filing this application more  
than 27 months from your  
date of formation and/or  
applying for reinstatement  
of tax-exempt status after  
being automatically  
Purpose of Form  
Completed Form 1023 required to ap-  
ply for recognition of section 501(c)(3)  
exemption. Use Form 1023, including  
the appropriate user fee, to apply for  
recognition of exemption from federal  
income tax under section 501(c)(3). If  
approved, we will issue a determination  
letter that describes your tax-exempt  
status and your qualification to receive  
tax-deductible charitable contributions.  
The determination letter will also show  
your specific foundation classification  
(described earlier) and annual filing  
requirements.  
revoked . . . . . . . . . . .  
E
F
A grant to the applicant is pending and  
A low-income housing  
organization . . . . . . . .  
the failure to secure the grant may have an  
adverse impact on the organization's  
ability to continue operations.  
A successor to other  
organizations . . . . . . . .  
G
The purpose of the newly created  
organization is to provide disaster relief to  
victims of emergencies such as floods and  
hurricanes.  
An organization providing  
scholarships, fellowships,  
educational loans, or other  
educational grants to  
An IRS error has caused delays in  
review of the application.  
individuals and/or a private  
foundation requesting  
User Fee  
approval of individual grant  
procedures . . . . . . . . .  
The law requires payment of a user fee  
with each application. You must pay this  
fee through Pay.gov when you file Form  
1023.  
H
Form 1023-EZ. You may be  
eligible to file Form 1023-EZ,  
Streamlined Application for  
TIP  
Recognition of Exemption Under Section  
501(c)(3) of the Internal Revenue Code,  
which is a streamlined version of Form  
1023. Complete the Form 1023-EZ  
Payments can be made directly from  
your bank account or by credit or debit  
card. You won't be able to submit Form  
1023 without paying the correct fee.  
Attachments To Form 1023  
A complete application will include one or  
more documents in addition to Form 1023.  
Instructions for Form 1023  
-3-  
                   
Pay.gov can accommodate only one  
uploaded file. Before submitting Form  
1023, consolidate your attachments into a  
single PDF file. Combine your  
Pub. 526, Charitable Contributions.  
Pub. 557, Tax-Exempt Status for Your  
Additional information needed. If we  
can’t make a determination without more  
information, we’ll write or call you.  
Examples of the types of questions we  
may ask you are available at IRS.gov/  
Organization.  
Pub. 598, Tax on Unrelated Business  
attachments in the following order.  
Income of Exempt Organizations.  
Organizing document (required).  
Pub. 1771, Charitable Contributions  
Amendments to your organizing  
Substantiation and Disclosure  
Requirements.  
Sample-Questions. If the additional  
information you provide shows that you  
meet the requirements for exemption, we'll  
send you a determination letter stating that  
you're exempt under section 501(c)(3). If  
we determine that you don't qualify for  
exemption, we will send you a letter that  
explains our position and your appeal  
rights.  
document in chronological order (required  
if applicable).  
Pub. 1828, Tax Guide for Churches and  
Bylaws or other rules of operation and  
Religious Organizations.  
Pub. 3079, Tax-Exempt Organizations  
amendments (if adopted).  
Form 2848, Power of Attorney and  
and Gaming.  
Declaration of Representative (if  
applicable).  
Pub. 3833, Disaster Relief: Providing  
Assistance Through Charitable  
Organizations.  
Form 8821, Tax Information  
Authorization (if applicable).  
Pub. 4220, Applying for 501(c)(3)  
Supplemental responses (if your  
Tax-Exempt Status.  
Pub. 4221-PC, Compliance Guide for  
Annual Return or Notice While  
Your Application Is Pending  
response won't fit in the provided text  
field) and any additional information you  
want to provide to support your request  
(optional).  
501(c)(3) Public Charities.  
Pub. 4221-PF, Compliance Guide for  
Unless you qualify for an exception from  
the requirement to file an annual return or  
notice, your filing obligations begin as  
soon as you were formed. If you have an  
information return or tax return due while  
your Form 1023 is pending, complete the  
return, mark the “Application Pending” box  
in the heading, Item B, and submit the  
return as indicated in those instructions.  
501(c)(3) Private Foundations.  
Expedite request (optional).  
Signature Requirements  
Put your name and EIN on each page  
An officer, director, trustee, or other official  
who is authorized to sign for the  
of your supplemental response and  
identify the part and line number to which  
the information relates.  
organization must digitally sign Form 1023  
at the end of Part X. The signature must  
be accompanied by the title or authority of  
the signer and the date.  
When To File  
If you’re eligible to file a Form 990-N,  
e-Postcard, call 877-829-5500 and  
request to be set up to allow filing of Form  
990-N (note, it takes the IRS up to 6  
weeks to update its records before you  
can file your Form 990-N).  
You can find information on return filing  
requirements and exceptions in Pubs. 557  
and 598 and in the instructions to the  
annual returns listed in Figure 1.  
Generally, if you file Form 1023 within 27  
months after the end of the month in which  
you were legally formed, and we approve  
your application, the effective date of your  
exempt status will be your legal date of  
formation.  
Authorized Representative  
Form 2848. Upload a completed Form  
2848 if you want to authorize a  
representative to represent you regarding  
your application. An individual authorized  
by Form 2848 may not sign the application  
unless that person is also an officer,  
director, trustee, or other official who is  
authorized to sign the application.  
If you don’t file Form 1023 within 27  
months, the effective date of your exempt  
status will be the date you filed Form  
1023. For exceptions and special rules,  
see Part VIII. Effective Date and  
Schedule E.  
You may also be required to file  
A Centralized Authorization File  
other returns, such as  
TIP  
(CAF) number isn’t required to be  
!
employment tax returns or benefit  
CAUTION  
How to File  
listed on Form 2848.  
plan returns, which aren't discussed here.  
As of January 31, 2020, the IRS requires  
that Form 1023 applications for  
Form 8821. Upload a completed Form  
8821 if you want to authorize us to discuss  
your application with the person you have  
appointed on that form.  
Form 8821 doesn’t authorize your  
appointee to advocate your position with  
respect to the federal tax laws; to execute  
waivers, consents, or closing agreements;  
or to otherwise represent you before the  
IRS. If you want to authorize an individual  
to represent you, use Form 2848.  
If a Form 990-series return is due  
recognition of exemption be submitted  
electronically online at Pay.gov. The IRS  
will provide a 90-day grace period during  
which it will continue to accept paper  
versions of Form 1023. To submit Form  
1023, you must:  
while your application is pending,  
!
CAUTION  
complete and submit the return  
according to Form 990-series form's  
instructions.  
Public Inspection  
1. Register for an account on  
Pay.gov.  
Information available for public in-  
spection. If we approve exempt status  
under section 501(c)(3), the following  
information that will be open for public  
inspection includes the following.  
2. Enter "1023" in the search box and  
select Form 1023.  
After You Submit Form 1023  
3. Complete the form.  
Unless we approve a request for  
expedited processing, we will assign and  
work your application in the order we  
received it.  
Your complete Form 1023 and any  
Filing Assistance  
supporting documents.  
For help in completing this form or general  
questions relating to an exempt  
All correspondence between you and  
the IRS concerning Form 1023, including  
Form 2848.  
organization, you may access information  
on our website at IRS.gov/EO.  
No additional information needed. If  
our review shows that you meet the  
requirements for tax-exempt status under  
section 501(c)(3), we’ll send you a  
Your determination letter.  
Annual information returns (Forms 990,  
You may find the following publications  
available on IRS.gov helpful.  
990-EZ, or 990-PF).  
Schedule A, included with Forms 990 or  
determination letter stating that you’re  
exempt under section 501(c)(3) and  
identifying your foundation classification.  
Pub. 517, Social Security and Other  
990-EZ.  
Information for Members of the Clergy and  
Religious Workers.  
Schedule B, included with Forms 990 or  
990-EZ, excluding the names and  
Instructions for Form 1023  
-4-  
                         
addresses of contributors and other  
Figure 1. 990 Series Forms Filed by Exempt Organizations  
identifying information about contributors.  
Schedule B, included with Form  
Type of Annual Return  
Who Should File  
990-PF, including names, addresses, and  
other identifying information about  
contributors.  
Exempt Organization Business Income  
Form 990, Return of Organization  
Exempt from Income Tax  
Section 501(c)(3) public charities  
Tax Return (Form 990-T).  
Information not available for public  
inspection. The following items won’t be  
open for public inspection.  
Form 990-EZ, Short Form Return of  
Organization Exempt from Income Tax  
Section 501(c)(3) public charities whose  
gross receipts during the year were less  
than $200,000 and total assets at the  
end of the year were less than $500,000  
Any information relating to a trade  
secret, patent, style of work, or apparatus  
that, if released, would adversely affect  
you (we must approve withholding this  
information).  
Form 990-PF, Return of Private  
Foundation  
Private foundations, including private  
operating foundations, regardless of  
financial status  
Any other information that would  
adversely affect national defense (we  
must approve withholding this  
information).  
Form 990-T, Exempt Organization  
Business Income Tax Return  
Public charities and private foundations  
that have gross unrelated business  
income of $1,000 or more  
User fee payment information.  
Contributors' names and addresses  
Form 990-N Electronic Notice  
(e-Postcard) for Tax-Exempt  
Organizations Not Required to File Form  
990 or Form 990-EZ  
Most small public charities with gross  
receipts of $50,000 or less can file a  
Form 990-N, if they choose not to file a  
Form 990 or Form 990–EZ instead.  
and identifying information about  
contributors included with Forms 990 or  
990-EZ and the Schedule B filed with  
these forms.  
When applying for tax-exempt status,  
you must clearly identify any information  
that isn’t open for public inspection by  
marking it as “NOT SUBJECT TO PUBLIC  
INSPECTION” and include an explanation  
of why you’re asking for the information to  
be withheld. We will decide whether to  
withhold the identified information from  
public inspection.  
posted. To date, the IRS hasn’t approved  
any third-party websites for posting.  
U.S. sources are normally $50,000 or less  
and it hasn’t conducted significant activity  
in the United States. See the Instructions  
for Form 990 and Form 990-EZ, and the  
Instructions for Form 990-PF for further  
information. A foreign organization that is  
subject to unrelated business income tax  
must file Form 990-T.  
See Pub. 557 for additional information  
on public inspection requirements.  
Foreign Organizations  
Foreign organizations are those that were  
created in countries other than the United  
States, its territories, or its possessions.  
Foreign organizations may apply for  
tax-exempt status on income earned in the  
United States in the same way that  
domestic organizations apply for exempt  
status. See Language and currency  
requirements, above.  
Making documents available for public  
inspection. Both you and the IRS must  
make the information that is subject to  
disclosure available for public inspection.  
The public may request a copy of the  
information available for public inspection  
from us by submitting Form 4506-A. The  
public may also request inspection of the  
information or a copy of the information  
directly from you.  
You may post the documents required  
to be available for public inspection on  
your own website. Information returns and  
your exemption application materials must  
be posted exactly as filed with the IRS.  
You may only delete the information that  
isn’t open for public inspection.  
If you post the documents on your  
website, you can give any person  
requesting copies the website where the  
documents may be found, but you don’t  
need to provide copies of the information.  
However, even if these documents are  
posted on your website, you must still  
allow public inspection without charge at  
your main office during regular business  
hours.  
Documents aren’t considered available  
for public inspection on a website if the  
otherwise disclosable information is edited  
or subject to editing by a third party when  
Canadian Organizations  
Canadian organizations that have  
received a Notification of Registration from  
the Canada Revenue Agency (formerly  
Canada Customs and Revenue Agency),  
and whose registrations haven’t been  
revoked (“Canadian registered charities”),  
are automatically recognized in the U.S.  
as section 501(c)(3) organizations and  
aren’t required to file Form 1023.  
If you’re a foreign organization applying  
for exempt status, you must complete all  
required parts of Form 1023. However,  
see the special rules below for certain  
Canadian organizations.  
Canadian registered charities are also  
presumed to be private foundations. If  
you’re a Canadian registered charity and  
want to be listed as a section 501(c)(3)  
organization on IRS.gov or request  
classification as a public charity rather  
than a private foundation, mail or fax the  
information below to:  
Contributions by U.S. residents to  
foreign organizations generally  
aren’t deductible. Tax treaties  
TIP  
between the U.S. and certain foreign  
countries provide specific limited  
exceptions.  
Internal Revenue Service  
Exempt Organization Determinations  
Room 6403  
Annual returns for foreign organiza-  
tions. A foreign organization that obtains  
exemption as a public charity must file an  
information return annually (Form 990 or  
Form 990-EZ). A foreign organization that  
is a private foundation must file Form  
990-PF annually. However, a foreign  
organization, other than a private  
P.O. Box 2508  
Cincinnati, OH 45201  
(855) 204-6184  
No user fee is required.  
A letter stating the organization’s  
foundation or a section 509(a)(3)  
request (listing as a section 501(c)(3)  
organization on IRS.gov or classification  
as a public charity).  
supporting organization, may file Form  
990-N (e-Postcard) instead of Form 990 or  
Form 990-EZ when its gross receipts from  
Instructions for Form 1023  
-5-  
       
The legal name and complete mailing  
For a foreign address, enter your  
province or state and foreign postal code  
where indicated.  
or trustees, check the box provided to add  
more officer, director, and/or trustee  
information.  
The person who is signing Form 1023  
must be listed within the first five entries of  
line 9.  
address of the organization.  
The organization’s EIN.  
The month its tax year ends.  
Line 2. Employer Identification Num-  
ber (EIN). You must have your own EIN.  
Enter the 9-digit EIN the IRS assigned to  
you. If you don’t have an EIN, you must  
apply for one before submitting your  
application. You can find out how to apply  
for an EIN by visiting IRS.gov and search  
for “apply for an EIN.” You may apply for  
an EIN online or by fax or mail.  
The organization’s date of formation.  
A contact name and telephone number.  
The public charity status it is requesting  
(if applicable) and information  
demonstrating how it meets the  
requirements of that status (see Part VII,  
line 1, and related questions and  
schedules).  
Part II. Organizational  
Structure  
You must be a corporation, limited liability  
company, unincorporated association, or  
trust to be tax exempt under section  
501(c)(3). Sole proprietorships,  
This penalty of perjury statement:  
International applicants may call  
I declare under the penalties of perjury  
that I have examined this request,  
267-941-1099 (toll call).  
partnerships, or loosely affiliated groups of  
individuals aren’t eligible.  
Don’t apply for an EIN more than  
including the accompanying documents,  
and to the best of my knowledge and  
belief, the request contains all the relevant  
facts relating to the request, and such  
facts are true, correct, and complete.  
once. If you’re unsure of your EIN  
TIP  
Line 1. Type of organization and copy  
of organizing document. Select your  
type of organization, and before  
submitting the form, upload a copy of your  
organizing document (including any  
amendments) as part of the required  
attachment.  
or whether you have one, call  
877-829-5500 for assistance.  
Don’t use the EIN of a related or  
The signature of an officer, director,  
other organization.  
trustee, or other authorized person.  
A copy of the organization’s Notification  
!
CAUTION  
of Registration.  
Line 3. Month tax year ends. Select the  
month your tax year (annual accounting  
period) ends. Your tax year (annual  
accounting period) is the 12-month period  
on which your annual financial records are  
based.  
Form 8833, Treaty-Based Return  
Corporation. A corporation is an entity  
organized under a federal or state statute,  
or a statue of federally recognized Indian  
tribal or Alaskan native government.  
Position Disclosure Under Section 6114 or  
7701(b).  
Copy of organizing document  
(articles of incorporation and any  
amendments). A corporation’s  
Organizations Created in U.S.  
Territories and Possessions  
Check your bylaws or other rules  
of operation for consistency with  
the tax year (annual accounting  
TIP  
Organizations created in possessions and  
territories of the U.S. are generally treated  
as domestic organizations. If you were  
created in a U.S. possession or territory,  
you must complete all required parts of  
Form 1023 to apply for exempt status  
under section 501(c)(3).  
organizing document is its “articles of  
incorporation. ” If you formed under state  
statute, your articles of incorporation (and  
any amendments) must show  
period) you enter here.  
Line 4. Person to contact. Enter the  
name and title of the person you want us  
to contact if we need more information.  
The person to contact may be an officer,  
director, trustee, or other individual who is  
permitted to speak with us according to  
your bylaws or other rules of operation.  
Your person to contact may also be an  
authorized representative, such as an  
attorney, certified public accountant, or  
enrolled agent, for whom you’re submitting  
a completed Form 2848 with the Form  
1023.  
certification of filing. This means your  
articles show evidence that on a specific  
date they were filed with and approved by  
an appropriate state authority. The  
document must be an exact copy of what  
is on file with your state.  
Charitable contributions to you are  
deductible by donors if you qualify for  
exempt status under section 501(c)(3).  
If you don’t have a copy of your articles  
of incorporation showing evidence of  
having been filed and approved by an  
appropriate state official, you may submit  
a substitute copy of your articles of  
incorporation. This substitute copy may be  
handwritten, typed, printed, or otherwise  
reproduced. It must be accompanied by a  
declaration, signed by an officer  
Annual filing requirements for an  
organization created in a U.S. territory or  
possession are similar to those outlined  
above for foreign organizations (see Rev.  
Proc. 2011-15 at IRS.gov/pub/irs-irbs/  
Line 5. Provide a daytime telephone  
number for the contact listed on line 4.  
Specific Instructions  
authorized to sign for you, that it is a  
complete and correct copy of the articles  
of incorporation and that it contains all the  
powers, principles, purposes, functions,  
and other provisions by which you  
Line 6. You may provide a fax number for  
the contact listed on line 4.  
Part I. Identification of  
Line 7. Pay.gov will populate this field  
with the current user fee for filing Form  
1023.  
Applicant  
Line 1a. Enter your complete name  
exactly as it appears in your organizing  
document, including amendments.  
currently govern yourself.  
Line 8. Enter your complete website  
address if you have one. Also, list any  
websites maintained on your behalf. The  
information on your website should be  
consistent with the information in your  
Form 1023.  
Limited liability company. A limited  
liability company (LLC) that files its own  
exemption application is treated as a  
corporation rather than a partnership.  
Line 1b. If you have an “in care of” name,  
enter it here; otherwise, leave this space  
blank.  
Copy of organizing document  
(articles of organization and operating  
agreement (if adopted) and any  
amendments). Instead of articles of  
organization, an LLC’s organizing  
document is its state-approved “articles  
of organization.” If it has adopted an  
“operating agreement,” then this  
Line 1c-i. Enter your complete address  
where all correspondence will be sent. If  
mail isn’t delivered to your street address  
and you have a P.O. box, list your P.O.  
box information instead of your street  
address.  
Line 9. Officers, directors, and trust-  
ees. Enter the full names, titles, and  
mailing addresses of your officers,  
directors, and/or trustees. You may use  
the organization’s address for mailing. If  
you have more than five officers, directors,  
Instructions for Form 1023  
-6-  
                     
document is also part of its organizing  
document. If you formed under state  
statute, your articles of organization (and  
any amendments) must show certificate  
of filing. This means your articles show  
evidence that on a specific date they were  
filed with and approved by an appropriate  
state authority. The document must be an  
exact copy of what is on file with your  
state. If you don’t have a copy of your  
articles of organization showing evidence  
of having been filed and approved by an  
appropriate state official, you may submit  
a substitute copy of your articles of  
accurate copy of the signed and dated  
original. Your declaration should clearly  
indicate the original date that it was  
signed. For trusts created by a will, include  
a copy of the death certificate or a  
statement indicating the date of death,  
and a copy of the relevant portions of the  
will.  
Took over 25% or more of the fair  
market value of the net assets of another  
organization, or  
Were established upon the conversion  
of an organization from for-profit to  
non-profit status.  
If you’re a successor organization,  
complete Schedule G, Successors to  
Other Organizations.  
If your trust agreement continues  
to provide for distributions for  
!
Your predecessor organization  
CAUTION  
non-charitable interests, you won’t  
may have been either a  
TIP  
qualify for tax-exempt status.  
tax-exempt or non-exempt  
organization.  
Line 2. Formation date. The date you  
enter should be consistent with your  
organizing document.  
organization. This substitute copy may be  
handwritten, typed, printed, or otherwise  
reproduced. It must be accompanied by a  
declaration, signed by an officer  
Part III. Required  
If you’re a corporation, enter the date  
Provisions in Your  
Organizing Document  
that your articles of incorporation were  
filed and approved by the appropriate  
authority.  
authorized to sign for you, that it is a  
complete and correct copy of the articles  
of organization and that it contains all the  
powers, principles, purposes, functions,  
and other provisions by which you  
Line 1. Purpose clause. Your  
If you’re an LLC, enter the date that the  
organizing document must limit your  
purposes to those described in section  
501(c)(3). Those purposes are charitable,  
religious, educational, scientific, literary,  
testing for public safety, fostering national  
or international amateur sports  
appropriate authority filed your articles of  
organization or other organizing  
document.  
currently govern yourself.  
If you’re an unincorporated association,  
If you are an LLC and want to be  
enter the date that your organizing  
document was adopted by the signatures  
of at least two individuals.  
treated as a disregarded entity by  
a tax-exempt member, don’t file  
TIP  
competition, and preventing cruelty to  
children or animals.  
an exemption application.  
If you’re a trust (other than a trust  
The generally accepted legal definition  
of “charitable” includes relief of the poor,  
the distressed, or the underprivileged;  
advancement of religion; advancement of  
education or science; erecting or  
Unincorporated association. An  
unincorporated association formed  
under state law must have at least two  
members who have signed a written  
document that creates an entity with a  
specifically defined purpose.  
formed by a will), enter the date your trust  
was funded. If your trust agreement  
provided for any non-charitable interests,  
enter the date that non-charitable interests  
expired. If you were formed by a will, enter  
the date of death or the date any  
maintaining public buildings, monuments,  
or works; lessening the burdens of  
non-charitable interests expired.  
Copy of organizing document  
(articles of association or constitution  
and any amendments). Your organizing  
document must include the name of the  
organization, its purpose, the date the  
document was adopted, and the  
government; lessening neighborhood  
tensions; eliminating prejudice and  
discrimination; defending human and civil  
rights secured by law; and combating  
community deterioration and juvenile  
delinquency. Therefore, the phrase “relief  
of the poor” in your organizing document  
properly limits your purposes.  
Line 3. State of formation. Enter the  
jurisdiction (for instance, the state or the  
federally recognized tribal government)  
under the laws of which you were  
incorporated or otherwise formed. This  
may not be the place in which you’re  
physically located. For example, if you’re  
physically located in New York, but  
incorporated under Massachusetts law,  
enter Massachusetts.  
signatures of at least two individuals. If  
your copy doesn’t contain the proper  
signatures and date of adoption, you may  
submit a written declaration that states  
your copy is a complete and accurate  
copy of the signed and dated original.  
Your declaration should clearly indicate  
the original date of adoption.  
Limiting your purposes by reference to  
section 501(c)(3) generally will be  
sufficient to meet the organizational test  
under section 501(c)(3). Your organizing  
document may also sufficiently limit your  
purpose by reference to a specific  
charitable purpose such as “relief of the  
elderly within the meaning of section  
501(c)(3).”  
However, purposes listed in your  
organizing document broader than those  
listed in section 501(c)(3) may cause you  
to fail the organizational test. In that case,  
you will need to amend your organizing  
document before applying. A reference to  
section 501(c)(3) won’t ensure that your  
purposes are limited to those described in  
section 501(c)(3) if other provisions  
describing your purposes include one or  
more non-exempt purposes. The following  
is an example of an acceptable purpose  
clause.  
For purposes of completing this  
application, you’re formed under the laws  
of a foreign country if you’re not formed  
under the laws of the United States, its  
territories and possessions, federally  
recognized Indian tribal or Alaska native  
governments, or the District of Columbia.  
Bylaws may be considered an  
organizing document only if they  
include the required elements  
TIP  
listed above.  
Line 4. Bylaws” are generally the  
internal rules and regulations of an  
organization. If you have bylaws, upload a  
current copy (including any amendments).  
Bylaws don’t need to be signed unless  
they are your organizing document as  
described in the instructions for line 1  
above.  
Trust. A trust may be formed by a trust  
agreement or declaration of trust. A trust  
may also be formed through a will.  
Generally, a trust must be funded with  
property, such as money, real estate, or  
personal property.  
Copy of organizing document (trust  
agreement/declaration of trust or will  
and any amendments). Your trust  
agreement (and any amendments) must  
be signed by at least one trustee. If your  
trust agreement copy isn’t signed, you  
may submit a written declaration that  
states your copy is a complete and  
Line 5. Successor organization. You  
are a “successor” if you:  
Took over activities previously  
conducted by another organization,  
Instructions for Form 1023  
-7-  
           
Where is the activity conducted?  
The organization is organized  
exclusively for charitable,  
religious, educational, and  
scientific purposes under  
section 501(c)(3) of the Internal  
Revenue Code, or  
Upon the dissolution of this  
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  
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.  
What percentage of your total time is  
allocated to the activity? (Combined time  
percentages should add up to 100%.)  
How is the activity funded (for example,  
donations, fees, etc.) and what  
percentage of your overall expenses is  
allocable to this activity?  
corresponding sections of any  
future federal tax code.  
How does the activity further your  
exempt purposes?  
Line 2. National Taxonomy of Exempt  
Entities (NTEE) code. An NTEE code is  
a three-character series of letters and  
numbers that generally describes a type of  
organization. Enter the code that best  
describes your organization from the list of  
NTEE codes, located in Appendix D. For  
more information and more detailed  
See Pub. 557 for further information  
and examples of how to limit your  
purposes.  
Line 2. Dissolution clause. Your  
organizing document must provide for  
the permanent dedication of your assets  
to a section 501(c)(3) purpose. This  
means that if you dissolve your  
See Pub. 557 for further information  
and examples of acceptable language for  
dedication of assets in your organizing  
document.  
definitions of these codes developed by  
the National Center for Charitable  
organization in the future, your assets  
must be distributed for an exempt purpose Part IV. Your Activities  
Statistics (NCCS), visit the Urban Institute  
NCCS website at www.nccs.urban.org.  
described in section 501(c)(3), or to the  
Reminder  
federal government, or to a state or local  
government, for a public purpose. In  
NTEE codes are also used for  
Answer all questions in this part as they  
purposes other than identification  
of organizations described in  
TIP  
certain states, you may rely on state law to pertain to your past, present, and future  
establish the permanent dedication of  
assets for exempt purposes. This is based  
on Rev. Proc. 82-2, 1982-1 C.B. 367. For  
additional information, search “Operation  
of state law” at IRS.gov.  
activities.  
section 501(c)(3). Therefore, all codes in  
the list don't necessarily correspond to a  
section 501(c)(3) purpose.  
Line 1. Describe completely and in detail  
your past, present, and planned activities.  
Don’t refer to or repeat the purposes in  
your organizing document or speculate  
about potential future programs. Your  
narrative description of activities should be  
thorough and accurate because we  
determine whether you qualify for section  
501(c)(3) exempt status based on the  
information in your application. You should  
describe either actual or planned  
Line 3. If programs are limited to specific  
individuals, describe how you select or  
identify those individuals. If programs are  
available only for members, describe  
membership criteria, any membership  
dues, any different membership levels,  
and the benefit each membership level  
receives.  
Foreign organizations may be able to  
rely upon the applicable laws of their  
jurisdiction in a similar manner. If relying  
on a foreign law, you must provide a copy  
of the applicable law with an English  
translation.  
Naming a specific organization to  
receive your assets upon dissolution will  
be acceptable only if your organizing  
document requires that the specific  
organization to be exempt under section  
501(c)(3) at the time your dissolution takes  
place and provides for a qualified  
alternative recipient if the named  
organization isn’t exempt under section  
501(c)(3) at that time.  
If your organizing document states that  
your assets would be distributed to  
members or private individuals or for any  
purpose other than those provided in  
section 501(c)(3), you must amend your  
organizing document to remove such  
statements.  
activities. For example, if you plan to  
further educational purposes by operating  
an afterschool homework club, you would  
describe that activity rather than cite that  
you will further educational purposes. If  
you were also contemplating offering  
scholarships in the future, but currently  
have no plans to do so, then the  
Line 4. Describe any business or family  
relationship between individuals who  
receive goods, services, or funds through  
your programs and any officers, directors,  
trustees, or highest compensated  
employees or independent contractors.  
For purposes of this form, “highest  
compensated” employees or independent  
contractors are persons to whom you pay  
over $100,000 of compensation,  
including compensation from related  
organizations.  
scholarship activity would be speculative,  
and you should not describe it.  
Some organizations (such as credit  
counseling organizations (see Part IV,  
line 8), childcare organizations (see Part  
IV, line 12), agricultural research  
Line 5. You participate in a political  
campaign if you promote or oppose the  
candidacy of an individual for public office.  
Candidate debates and nonpartisan voter  
education and registration may be  
permitted. See Rev. Rul. 2007-41,  
2007-25 I.R.B. 1421 at IRS.gov/irb/  
2007-25_I.R.B. 1421 and Pub. 1828 for  
more information and examples.  
organizations (see Part VII, line 1), or  
cooperative hospital service organizations  
(see Schedule C)) must meet specific  
operational requirements to qualify for  
exemption under section 501(c)(3). If  
you’re such an organization, be certain to  
include an explanation in your activity  
description of how activities you conduct  
(or don’t conduct, if the specific  
The following is an example of an  
acceptable dissolution clause.  
Organizations described in  
operational requirement limits permissible  
activities) satisfy those specific  
section 501(c)(3) are prohibited  
!
CAUTION  
from supporting or opposing  
operational requirements.  
candidates for public office in any political  
campaign. If you answer “Yes,” you aren’t  
qualified for tax exemption under section  
501(c)(3) and should reconsider whether  
the filing of application Form 1023 is  
For each past, present, or planned  
activity, include information that answers  
the following questions.  
What is the activity?  
Who conducts the activity?  
appropriate for you. See Pub 557 for a  
Instructions for Form 1023  
-8-  
   
description of other code sections under  
which you may qualify.  
Churches and private foundations  
aren’t eligible to make this section  
501(h) election.  
being associated with terrorism on  
OFAC’s Specially Designed Nationals and  
Blocked Persons List (OFAC SDN List).  
Information about OFAC sanction  
!
CAUTION  
Line 6. You are attempting to influence  
legislation if you directly contact or urge  
the public to contact members of a  
legislative body for the purpose of  
proposing, supporting, or opposing  
legislation. You are also attempting to  
influence legislation if you advocate the  
adoption or rejection of legislation. If you  
answer “Yes,” your explanation should  
include the percentage of your total time  
and total funds spent on such legislative  
activities.  
Line 7. Intellectual property includes  
programs and the OFAC SDN List are  
available at www.treasury.gov/ofac.  
the following;  
Patents (for inventions);  
Line 10. A “foreign country” is a  
country other than the U.S., its territories  
and possessions, and the District of  
Columbia.  
Copyrights (for literary and artistic  
works such as novels, poems, plays, films,  
musical works, drawings, paintings,  
photographs, sculptures, architectural  
designs, performances, recordings, film,  
and radio or television programs);  
Line 10a–c. See instructions for lines 9g–  
i.  
Trade names, trademarks, and service  
Line 11. You are a sponsoring  
marks (for symbols, names, images, and  
designs); and  
organization of a donor-advised fund if  
you establish separate accounts that you  
own or control for a donor whereby the  
donor or donor-advisor may make  
recommendations about the investments  
of or distributions from the account. See  
Pub. 557 for more information on the  
definitions of sponsoring organizations  
and donor-advised funds.  
Organizations described in section  
501(c)(3) are prohibited from engaging in  
a substantial amount of legislative  
Formulas, know-how, and trade  
secrets.  
activities. Whether you’re engaged in  
substantial legislative activities depends  
on all of the facts and circumstances.  
Line 8. These activities involve the  
education of the consumer on budgeting,  
personal finance, financial literacy,  
mortgage foreclosure assistance, or other  
consumer credit areas. These activities  
may also involve assisting the consumer  
in consolidating debt and negotiating  
between debtors and creditors to lower  
interest rates and waive late and over-limit  
fees. If you answer “Yes,” you may be  
subject to the requirements of section  
501(q). Search “501(q)” on IRS.gov for  
information on these requirements and  
whether they apply to you.  
For this purpose, “legislation” includes  
action by Congress, a state legislature, a  
local council, or a similar governing body,  
with respect to acts, bills, resolutions or  
similar items (such as legislative  
You can't sponsor a  
donor-advised fund if you're a  
!
CAUTION  
private foundation.  
confirmation of appointive offices).  
Legislation also includes action by the  
public in a referendum, ballot initiative,  
constitutional amendment, or similar  
procedure. Legislation generally doesn’t  
include actions by executive, judicial, or  
administrative bodies.  
Organizations may involve themselves  
in issues of public policy without being  
engaged in legislative activity. For  
Line 12. A “school” is an educational  
organization whose primary function is the  
presentation of formal instruction and  
which normally maintains a regular faculty  
and curriculum and that normally has a  
regularly enrolled body of pupils or  
students in attendance at the place where  
its educational activities are regularly  
carried on. A school may include the  
following.  
Line 9. A “relationship” between you  
and the recipient organization includes the  
following situations.  
You control the recipient organization,  
example, organizations may conduct  
educational meetings, prepare and  
distribute educational materials, or  
otherwise consider public policy issues.  
Similarly, an organization may appear  
before a governmental body at its request  
to offer testimony about a decision that  
may affect the organization’s existence.  
or it controls you through common  
officers, directors, or trustees, or through  
authority to approve budgets or  
expenditures.  
Primary, secondary, preparatory, or  
high school.  
College or university.  
You and the recipient organization were  
Trade or technical school.  
Nursery or pre-school.  
created at approximately the same time  
and by the same persons.  
School that you operate as an activity,  
You and the recipient organization  
such as a school that is operated as an  
activity of a museum, historical society, or  
church.  
operated in a coordinated manner with  
respect to facilities, programs, employees,  
or other activities.  
A private foundation isn’t allowed  
to engage in any activities to  
influence legislation.  
TIP  
If you're a nursery or pre-school  
Persons who exercise substantial  
that doesn't meet the description  
of a school, answer “No,” to  
TIP  
influence over you also exercise  
substantial influence over the recipient  
organization.  
Line 6a. Form 5768. Most public  
charities are eligible to elect to make  
expenditures to influence legislation by  
filing Form 5768, Election/Revocation of  
Election by an Eligible Section 501(c)(3)  
Organization To Make Expenditures To  
Influence Legislation. By filing Form 5768,  
your legislative activities will be measured  
solely by an expenditure limit under  
section 501(h) rather than by whether the  
legislative activity is considered  
line 12.  
Line 9b. Answer “Yes,” if you make  
grants, loans, or other distributions (such  
as goods) to a foreign organization.  
If you’re a nursery, pre-school, or  
child care organization that  
TIP  
doesn’t meet the description of a  
school, you may still further an educational  
purpose if substantially all the care you  
provide is for the purpose of enabling  
individuals to be gainfully employed and  
your services are available to the general  
public (section 501(k)).  
Line 9g–i. The Office of Foreign Assets  
Control (OFAC) of the U.S. Department of  
the Treasury administers and enforces  
economic and trade sanctions based on  
U.S. foreign policy and national security  
goals against certain governments,  
entities, and individuals, as directed in  
Executive Orders. As part of the  
substantial. Form 5768 describes the  
types of organizations that are eligible to  
make an election. You must file Form  
5768 by mailing it to the address on the  
form. For a discussion of influencing  
legislation and the requirements of section  
501(h), see Pub 557.  
If you’re a school, or if you operate a  
school as an activity (even if it is a  
comprehensive and sustained campaign  
against terrorist financing, all U.S.  
secondary activity), complete Schedule B.  
See Pub. 557 for additional information.  
persons, including U.S.–based charities,  
are prohibited from dealing with persons  
(individuals and entities) identified as  
Line 13. “Hospital” or “medical care”  
includes the treatment of any physical or  
Instructions for Form 1023  
-9-  
mental disability or condition, whether as  
an inpatient or outpatient. A hospital  
includes the following.  
support. Fundraising may be conducted  
by your employees or volunteers, through  
an agent, or through an independent  
contractor. Check all the boxes that apply.  
“Yes,” if you will or you do have highest  
compensated employees or highest  
compensated independent contractors.  
For purposes of this form, “highest  
compensated” employees or independent  
contractors are persons to whom you pay  
over $100,000 of compensation,  
including compensation from related  
organizations.  
Hospitals and rehabilitation institutions,  
outpatient clinics, or community mental  
health or drug treatment centers if the  
principal purpose or function is the  
providing of medical or hospital care or  
medical education or research.  
For purposes of this application,  
“bingo” is a game of chance played with  
cards that generally are printed with five  
rows of five squares each on which  
participants place markers to form a  
pre-selected pattern to win the game.  
“Other (non-bingo) gaming activities”  
include pull-tabs, raffles, keno,  
Medical research organizations if the  
For information on determining if an  
principal purpose or function is the  
continuous active conduct of medical  
research in conjunction with a hospital.  
individual is an employee or an  
independent contractor, see Pub. 15-A,  
Employer’s Supplemental Tax Guide.  
split-the-pot, and other games of chance.  
If you provide “hospital or medical  
care,” or you’re a medical research  
organization, complete Schedule C.  
Gaming doesn’t further an  
Line 1e. Similarly situated  
exempt purpose under section  
501(c)(3). Except to the extent  
TIP  
organizations” means tax-exempt or  
taxable organizations of comparable size,  
purpose, and resources. Adjustments due  
to geographic area and other specified  
conditions are appropriate, but you should  
document the adjustments. You should  
document the sources(s) of comparable  
compensation data, both taxable and  
non-taxable, and retain copies in your  
permanent records.  
See Pub. 557 for additional  
that an exception may apply, your revenue  
from gaming activities will be subject to  
unrelated business income tax. See  
Pub. 3079 for further information about  
gaming.  
information.  
Line 14. “Low-income housing” refers  
to rental or ownership housing provided to  
persons based on financial need. If you  
provide low-income housing, complete  
Schedule F.  
Part V. Compensation and  
Other Financial  
Line 15. Answer “Yes,” if you pay money  
to an individual as a scholarship,  
Line 1g. “Reasonable compensation”  
is the amount that would ordinarily be paid  
for like services by like organizations  
under like circumstance as of the date the  
compensation arrangement is made.  
Establishing and documenting your  
decisions about compensation is  
important because excess compensation  
(including cash and other benefits that  
aren’t accounted for as reasonable  
compensation for services) may result in  
excise taxes on both the individual and  
you, and may jeopardize your tax  
exemption.  
Arrangements  
fellowship, or education loan; for travel,  
study, or other similar purposes. Also,  
answer “Yes,” if you pay such amounts on  
behalf of an individual to a school or a  
tuition or educational savings program.  
Complete Schedule H—Section I.  
Reminder. Answer all questions in this  
part as they pertain to your past, present,  
and future activities.  
For purposes of Part V, compensation  
includes:  
Travel, study, or other similar purposes  
include payments made to enhance a  
literary, artistic, musical, scientific,  
teaching or other similar capacity, skill, or  
talent of the individual recipient. These  
payments include, for example, amounts  
paid to:  
Salary or wages;  
Deferred compensation;  
Retirement benefits, whether in the  
form of a qualified or non-qualified  
employee plan (pensions or annuities);  
Fringe benefits (personal vehicle,  
meals, lodging, personal and family  
educational benefits, low-interest loans,  
payment of personal travel, entertainment,  
or other expense, athletic or country club  
membership, and personal use of your  
property); and  
Vocational high school students to be  
Line 2. A conflict of interest arises when a  
person in a position of authority over an  
organization, such as a director, officer, or  
manager, may benefit personally from a  
decision he or she could make. A sample  
Conflict of Interest Policy is included as  
Appendix A. This sample conflict of  
interest policy doesn’t prescribe any  
specific requirements. Therefore,  
organizations should use a conflict of  
interest policy that best fits their  
used to purchase basic tools;  
Teachers to induce them to teach in a  
public school system in an economically  
depressed area; and  
A scientific researcher to underwrite  
Bonuses.  
that individual’s research project.  
Example. An organization could  
Educational grants don’t include  
amounts you pay to an individual as  
compensation, such as payments made to  
a consultant for personal services or to  
produce a report for you.  
Educational grants don’t include  
amounts paid to another organization that  
distributes your funds as a scholarship to  
an individual if you have no role in the  
selection process.  
compensate a director as follows:  
Wages  
Director  
Compensation . . .  
organizations.  
$2,500  
Adoption of a conflict of interest policy  
isn’t required to obtain tax-exempt status.  
However, by adopting the sample policy or  
a similar policy, you will be choosing to put  
in place procedures that will help your  
officers, directors, and trustees recognize  
situations that could present potential or  
actual conflicts of interest so that you can  
take steps to reduce the risk that those in  
positions of authority over you may  
Salary as Chief Executive  
Officer . . . . . . . . . . . . . . .  
Deferred retirement . . . . . .  
Health insurance policy . . .  
Use of a vehicle . . . . . . . .  
Total Compensation  
40,000  
2,000  
5,000  
5,000  
$54,500  
If you're a “private foundation”  
as described in Part VII, you must  
!
CAUTION  
obtain advance approval of your  
grant-making procedures. You can use  
Schedule H—Section II, to request  
advance approval as part of this  
application process. You can complete  
Section II when you complete Part VII.  
Foundation Classification.  
receive an inappropriate benefit.  
Make sure the information you provide in  
Part V is consistent with the information  
you enter in Part VI. Financial Data.  
The sample conflict of interest  
policy in Appendix A includes  
TIP  
items marked “Hospital insert–for  
Line 1. Compensation. Check “Yes,” if  
you do or you will compensate your  
hospitals that complete Schedule C” that  
are intended to be adopted by hospitals.  
Line 16. “Fundraising”includes efforts  
officers, directors, or trustees. Also, check  
to raise funds through appeals for financial  
Instructions for Form 1023  
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haven’t existed, for a total of 4 years of  
financial information. Place financial  
information for the year you’re filing this  
application in the column marked Current  
tax year.  
Line 3. A fixed payment means a  
payment that is either a set dollar amount  
or fixed through a specific formula where  
the amount doesn’t depend on discretion.  
For example, a salary of $200,000 that is  
adjusted annually based on the increase  
in the Consumer Price Index is a fixed  
payment.  
Line 5. Answer “Yes,” if any of your  
officers, directors, or trustees:  
Is an officer, director, or trustee in  
another organization (other than a section  
501(c)(3) organization) that has a lease,  
contract, loan, or other agreement with  
you; or  
Completed 5 years or more. If  
you’ve existed for 5 years or more, provide  
your actual income and expenses for your  
5 most recently completed tax years.  
Place financial information for your most  
recently completed tax year in the column  
marked Current tax year.  
Possesses more than a 35% ownership  
interest in any organization that has a  
lease, contract, loan, or other agreement  
with you. For example, answer “Yes,” if  
one of your directors is an officer for a  
section 501(c)(4) organization with whom  
you have a lease for office space, or if one  
of your directors owns more than 35% of  
the voting stock of a corporation to which  
you made a loan.  
A “non-fixed payment” means a  
payment that depends on discretion. For  
example, a bonus of up to $100,000 that is  
based on an evaluation of performance by  
the governing board is a non-fixed  
We may request financial  
payment because the governing body has  
discretion over whether the bonus is paid  
and on the amount of the bonus.  
information for more than 5 years.  
!
CAUTION  
A. Statement of Revenue and  
Expenses  
Preparing the statement. Prepare the  
statement using the method of accounting  
you use in keeping your books and  
records.  
Prepare the statement using the  
accounting period entered on Part I, line 3.  
Enter “0” if a particular revenue or  
expense doesn’t apply to you.  
Your financial information should reflect  
your activities described in this  
application.  
Line 4. Don’t include purchases or sales  
of goods and services in your normal  
course of operations that are available to  
the general public under similar terms and  
conditions.  
Line 6. “Develop” means the planning,  
financing, construction, or provision of  
similar services involved in the acquisition  
of real property, such as land or a building.  
For example, you should provide  
Answer “Yes,” if any of your officers,  
information regarding the services of a  
consultant who arranges your acquisition  
of a facility through the issuance of  
tax-exempt bonds.  
directors, or trustees:  
Is an officer, director, or trustee of  
another organization (other than a section  
501(c)(3) organization) that you will  
purchase or sell goods, services, or  
assets from or to; or  
Line 7. “Manage” means to direct or  
administer. For example, you would  
provide information about an organization  
hired to administer a museum gift shop.  
Possesses more than 35% ownership  
interest in any organization that you will  
purchase or sell goods, services, or  
assets from or to.  
Line 1. Enter the total gifts, grants, and  
contributions you receive (other than  
membership dues reported on line 2 and  
described below). Include items of value  
that you receive as gifts, grants, or  
contributions. For example, if one of your  
activities is a food drive, include the value  
of the donated food on this line. Also  
include on this line payments a  
Line 8. A “joint venture” is a legal  
agreement in which the persons jointly  
undertake a transaction for mutual profit.  
Generally, each person contributes assets  
and shares risks. Like a partnership, joint  
ventures can involve any type of business  
transaction and the persons involved can  
be individuals, groups of individuals,  
companies, or corporations.  
Arm’s length. An arm’s length  
standard exists where the parties have an  
adverse (or opposing) interest. For  
example, a seller wants to sell his goods  
at the highest possible price, while a buyer  
wants to buy at the lowest possible price.  
These are adverse interests.  
governmental unit makes to enable you to  
both accomplish your exempt purpose(s)  
and to provide a service or facility directly  
to the general public.  
See the instructions for line 9 if you’re  
uncertain whether revenue should be  
included as a grant on line 1 or as gross  
receipts on line 9. Include unusual  
grants on line 12 and not on line 1.  
In negotiating with a person, an  
adverse interest is assumed if that person  
is otherwise unrelated to you in the sense  
of not being in a position to exercise  
substantial influence over you or your  
affairs. If the person is in a position to  
exercise substantial influence over your  
affairs, then an arm’s length standard  
requires additional precautions to  
Part VI. Financial Data  
Line 1. Select the option that best  
describes you to determine the years of  
revenues and expenses you need to  
provide.  
Completed less than 1 year. If  
you’ve existed for less than 1 year,  
provide projections of your likely income  
and expenses for your current year and  
projections of your likely income and  
expenses for the next 2 years based on a  
reasonable and good faith estimate of  
your future finances for a total of 3 years of  
financial information. Place financial  
information for the year you’re filing this  
application in the column marked Current  
tax year.  
eliminate the effect of the relationship.  
Examples.  
Using a conflict of interest policy,  
1. A city pays the symphony orchestra  
to provide free music programs in the  
public schools. The programs are open to  
the public. This income received from a  
governmental unit accomplishes the  
orchestra's exempt purpose and directly  
provides a service to the general public.  
This income is a grant to the symphony  
orchestra that should be listed on line 1.  
2. The symphony orchestra sells  
tickets to the public for its fall season.  
Such income is gross receipts received  
from the general public in performance of  
the symphony orchestra’s exempt function  
and should be listed on line 9.  
information about comparable  
transactions between unrelated parties,  
and reliable methods for evaluating the  
transaction, are examples of precautions  
that would help make the negotiation  
process equivalent to one between  
unrelated persons.  
Fair market value. This is the price at  
which property or the right to use property  
would change hands between a willing  
buyer and a willing seller, neither being  
under any compulsion to buy, sell, or  
transfer property or the right to use  
property, and both having reasonable  
knowledge of relevant facts.  
Completed more than 1 year, fewer  
than 5 years. If you’ve existed for more  
than 1 year but fewer than 5 years,  
provide your actual income and expenses  
for each completed year you’ve existed  
and projections of your likely income and  
expenses based on a reasonable and  
good faith estimate of your future finances  
for your current year and each year you  
3. The public school system pays the  
orchestra to create several musical pieces  
Instructions for Form 1023  
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Provide an itemized list of your gross  
receipts in line 25, describing the sources  
and amounts of income. For payments by  
a governmental unit, list the payer, the  
purpose of the payment, and the payment  
amount.  
Figure 2. Net Gain or Loss On Sales of Capital Assets  
Categories  
(A) Real Estate  
(B) Securities  
(C) Other  
1. Gross sales price of  
assets (other than  
Line 10. Lines 8 and 9 will be added for  
inventory) by category.  
you.  
2. Less: Cost or other  
basis and sales  
expenses.  
Line 11. Enter any net gain or loss on the  
sale of capital assets. Provide an itemized  
list by asset category (for example, real  
estate or securities) showing gross sales,  
cost or other basis/sales expenses, and  
gain or loss by asset category in line 25.  
You may use the format in Figure 2.  
3. Gain or (loss). Subtract  
line 2 from line 1.  
4. Net gain or (loss) — Add line 3 of columns (A), (B), and (C). Enter here and  
on Form 1023, Part VI - A. Statement of Revenues and Expenses, line 11.  
Line 12. Enter any “unusual grants,”  
which generally are any substantial  
contributions and bequests you received  
from disinterested persons that, by their  
size, adversely affect your classification as  
a public charity. “Unusual grants” are  
unusual, unexpected, and received from  
an unrelated party. Provide an itemized list  
of any unusual grants, including the  
amount in line 25, and explain how it was  
unusual, unexpected, and from an  
unrelated party.  
suitable for the school system’s  
provided by the governmental unit to the  
public without charge.  
elementary music curriculum. This  
payment by a governmental unit for the  
music compositions is primarily for the  
school system’s own use, not for the direct  
benefit of the public. Therefore, this  
income is gross receipts received from a  
governmental unit in performance of the  
orchestra’s exempt function that should be  
listed on line 9.  
Line 7. Enter your total income from all  
sources not reported on lines 1 through 6,  
or lines 9, 11, and 12. Provide an itemized  
list in line 25, showing each type and  
amount of income included, and a brief  
description of each type of income.  
Line 8. Lines 1 through 7 will be added  
for you.  
For additional information about  
unusual grants and a description of public  
charity classifications, see Pub. 557.  
Line 2. Enter the amount you receive  
from members to provide support to the  
organization. Don’t include payments from  
members or on behalf of members to  
purchase admissions, merchandise,  
services, or use of facilities.  
Line 9. Enter income from activities that  
you conduct to further your exempt  
purposes (excluding amounts listed on  
other lines). Also, include as gross  
receipts the income from activities  
conducted:  
Line 13. Lines 10 through 12 will be  
added for you.  
Lines 14. Enter the total expenses you  
incur for soliciting gifts, grants, and  
Line 3. Enter your gross income from  
dividends, interest, payments received on  
securities, loans, rents, and royalties you  
hold for investment purposes.  
See Pub. 598 for additional information  
regarding royalties treated as unrelated  
business income.  
Intermittently (not regularly carried on),  
such as an occasional auction;  
With substantially all (at least 85%)  
contributions included on line 1. Include  
fees paid to professional fundraisers for  
soliciting gifts, grants, and contributions.  
volunteer labor, such as a car wash;  
For the convenience of members,  
Line 15. Enter the total amount you pay  
out to both individuals and organizations.  
Provide an itemized list in line 25,  
students, patients, officers, or employees,  
such as a parking lot for a school’s  
students and employees; or  
Line 4. Enter your net income from  
unrelated business activities. “Unrelated  
business income” generally is income  
from any trade or business activity that is  
regularly carried on, and not related to  
your exempt purpose. Certain exceptions  
and exclusions may apply.  
Report on line 9 income from activities  
that aren’t related to the accomplishment  
of your exempt purposes, but aren’t  
considered unrelated business activities.  
For example, report income from the sale  
of merchandise by volunteers that isn’t  
treated as an unrelated trade or business  
on line 9.  
identifying recipients (using letter  
With substantially all contributed  
designations such as A, B, C, etc.), a brief  
description of the purposes or conditions  
of payments, and the amounts paid.  
merchandise, such as a thrift store.  
See Pub. 598 for additional information  
regarding income that isn’t from an  
unrelated trade or business.  
Gross receipts” also includes  
payment by a governmental unit that may  
be called a “grant” but is actually payment  
for a service or facility for the use of the  
government payer, rather than for the  
direct benefit of the public.  
Colleges, universities, and other  
educational institutions and agencies  
subject to the Family Educational Rights  
and Privacy Act (20 U.S.C. 1232g) don’t  
need to list the names of individuals to  
whom they provided scholarships or other  
financial assistance where such  
disclosure would violate the privacy  
provisions of the law. Instead, group each  
type of financial aid provided, indicate the  
number of individuals who received the  
aid, and specify the aggregate dollar  
amount.  
Example. The state government gives  
a conservation group a grant to study the  
effects of a new sewage treatment plant  
on an ecologically significant woodland  
area. Although the payment is called a  
grant, it is actually gross receipts that  
should be included on line 9. The payment  
is by a governmental unit (state) for a  
study for its own use, not for the direct  
benefit of the general public. A for-profit  
consulting company could’ve done the  
study rather than by the tax-exempt  
conservation group.  
See Pub. 598 for additional information  
regarding unrelated business income.  
Maintain (but don’t submit) a list  
Line 5. Enter amounts any local tax  
authority collects from the public on your  
behalf.  
showing the names of recipients  
associated with each letter designation.  
Line 16. Enter total payments you make  
to or for the benefit of your members (not  
including any amounts listed on line 15).  
Provide an itemized list in line 25,  
Line 6. Enter the value of services or  
facilities a governmental unit furnishes to  
you. Use the fair market value of the  
services or facilities. Don’t include the  
value of services or facilities generally  
identifying recipients (using letter  
Instructions for Form 1023  
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designations), a brief description of the  
purposes or condition of payments, and  
the amounts paid.  
on lines 1 through 9, for example, patents,  
copyrights, or other intangible assets.  
Provide an itemized list of each asset in  
line 19.  
Line 4. Enter the total amount of bonds or  
notes you issued that will be repaid to you.  
Provide an itemized list in line 19, that  
shows the name of each borrower (using a  
letter designation), the borrower’s  
Maintain (but don’t submit) a list  
showing the names of recipients  
Line 11. Lines 1 through 10 will be added  
associated with each letter designation.  
relationship to you, a brief description of  
the obligation, the rate of return, the due  
date, and the amount due.  
for you.  
Line 17. Enter the total amount of  
compensation you pay to your officers,  
directors, and trustees.  
Line 12. Enter the total amount of your  
accounts payable to suppliers and others,  
such as salaries payable, accrued payroll  
taxes, and interest payable.  
Maintain (but don’t submit) a list  
showing the names of borrowers  
associated with each letter designation.  
Line 18. Enter the total amount of  
salaries and wages you pay to employees  
(not reported on line 17).  
Line 13. Enter the total unpaid portion of  
grants and contributions you committed to  
pay to other organizations or individuals.  
Line 5. Enter the total fair market value  
of corporate stocks you hold. Provide an  
itemized list of your corporate stock  
holdings in line 19.  
For stock of closely held corporations,  
list the name or the corporation, a brief  
summary of the corporation’s capital  
structure, the number of shares held, and  
their value as carried on your books. If  
valuation doesn’t reflect current fair market  
value, also include fair market value.  
Line 19. Enter your total interest  
expenses for the year. Don’t include  
mortgage interest treated as an  
occupancy expense on line 20.  
Line 14. Enter the total of your mortgages  
and other notes payable outstanding at  
the end of the current tax year/period.  
Provide an itemized list in line 19 showing  
each note separately, including the  
lender’s name, purpose of loan,  
repayment terms, interest rate, and  
original amount.  
Line 20. Enter the amount you pay for the  
use of office space or other facilities, heat,  
light, power and other utilities, outside  
janitorial services, mortgage interest, real  
estate taxes, and similar expenses.  
Line 15. Enter the total amount of any  
other liabilities not reported on lines 12  
through 14. Provide an itemized list in  
line 19 of these liabilities, including the  
amounts you owe.  
For stock traded on an organized  
exchange or in substantial quantities over  
the counter, list the name of the  
Line 21. Enter the total depreciation,  
depletion, and similar expenses you incur.  
Line 22. Enter the total professional fees  
you pay. Professional fees are amounts  
charged by individuals and entities that  
aren’t your employees. They include fees  
for professional fundraisers (other than  
fees listed on line 14, earlier), accounting  
services, legal counsel, consulting  
corporation, a description of the stock,  
and the principal exchange on which it is  
traded, the number of shares held, their  
value as carried on your books, and their  
fair market value.  
Line 16. Lines 12 through 15 will be  
added for you.  
Line 17. Under fund accounting, an  
organization segregates its assets,  
liabilities, and net assets into separate  
funds according to restrictions on the use  
of certain assets. Each fund is like a  
separate entity in that it has a  
Line 6. Enter your total amount of loans  
(personal and mortgage loans) receivable.  
Provide an itemized list in line 19 that  
identifies each borrower (using a letter  
designation), the borrower’s relationship  
to you, purpose of loan, repayment terms,  
interest rate, and original amount of loan.  
Report each loan separately, even if more  
than one loan was made to the same  
person.  
services, contract management, or any  
independent contractors.  
Line 23. Enter any expenses you didn’t  
include in the lines above, such as for  
program services. Provide an itemized list  
in line 25, showing the type and amount of  
each significant expense.  
self-balancing set of accounts showing  
assets, liabilities, equity (fund balance),  
income, and expenses. If you don’t use  
fund accounting, report only the “net  
assets” account balances, which include  
capital stock, paid-in capital, retained  
earnings or accumulated income, and  
endowment funds.  
Line 24. Lines 14 through 23 will be  
added for you.  
Maintain (but don’t submit) a list  
showing the names of borrowers  
associated with each letter designation.  
B. Balance Sheet  
Complete the balance sheet for your most  
recently completed tax year. If you haven’t  
completed a full tax year, use the most  
current information available. Be sure to  
enter the year-end date for the information  
provided and not the date you prepare this  
application. Enter “0” if a particular asset  
or liability doesn’t apply to you.  
Line 18. Lines 16 and 17 will be added  
Line 7. Enter the total book value of your  
other investments. Include the total book  
value of government securities (federal,  
state, and municipal), and buildings and  
equipment held for investment purposes.  
Provide an itemized list in line 19  
for you.  
Part VII. Foundation  
Classification  
Organizations that are exempt under  
section 501(c)(3) are private  
foundations unless they are:  
identifying and reporting the book value of  
each building/item of equipment held for  
investment purposes.  
Line 1. Enter your total cash in checking  
and savings accounts, temporary cash  
investments (money market funds, CDs,  
treasury bills, or other obligations that  
mature in less than 1 year), and petty cash  
funds.  
Churches, schools, hospitals,  
Line 8. Enter the total book value of  
buildings and equipment not held for  
investment purposes. This includes  
facilities you own and equipment you use  
in conducting your exempt activities.  
Provide an itemized list in line 19 of these  
assets held at the end of the current tax  
year/period, including the cost or other  
basis.  
governmental units, entities that undertake  
testing for public safety, organizations that  
have broad financial support from the  
general public; or  
Organizations that support one or more  
Line 2. Enter your total accounts  
receivable that arose from the sale of  
goods and/or performance of services,  
less any reserve for bad debt.  
organization(s) that are themselves  
classified as public charities.  
Section 501(c)(3) organizations  
excepted from private foundation  
classification are public charities. Unless  
you meet one of the exceptions above,  
you’re a private foundation.  
Line 3. Enter the amount of materials,  
goods, and supplies you purchased or  
manufactured and held to be sold or used  
in some future period.  
Line 9. Enter the total book value of land  
not held for investment purposes.  
Line 10. Enter the total book value of any  
other category of your assets not reported  
Instructions for Form 1023  
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You can only select one  
foundation classification.  
functions, or a combination of these  
sources, and not more than one-third of  
your support from gross investment  
income and net unrelated business  
income. Typically, you would show a  
substantial part of your income on Part  
VI-A. Statement of Revenues and  
Expenses, lines 1, 2, and 9.  
In Part IV, line 1, include information  
detailing your agricultural research  
TIP  
program and how you will spend  
contributions to your program, including a  
description of how you’re engaged in the  
continuous active conduct of agricultural  
research (as defined in Section 1404 of  
the Agricultural Research, Extension, and  
Teaching Policy Act of 1977), information  
showing that you’re operated in  
Line 1. Select the foundation  
classification you’re requesting from the  
list below. The form will then take you to  
additional lines or parts of the application  
that you must complete based on your  
response.  
Under this public charity  
classification, you must meet both the  
“one-third public support test ” and the  
“not-more-than-one-third investment  
income and net unrelated business  
income test,” lines 1 through 13. See Pub.  
557 for additional information about these  
tests.  
conjunction with a land grant college or  
university or a non-land grant college of  
agriculture (as defined in Section 1404 of  
the Agricultural Research, Extension, and  
Teaching Policy Act of 1977), and  
509(a)(1) and 170(b)(1)(A)(vi). Select  
this classification if you normally receive a  
substantial part of your support from  
grants from governmental units or from  
contributions from the general public, or a  
combination of these sources. Typically,  
you would show a substantial part of your  
income on Part VI-A. Statement of  
information discussing the timing of when  
you will spend contributions for research.  
509(a)(1) and 170(b)(1)(A)(i). Select  
this classification if your primary purpose  
is operating a church or convention or  
association of churches. The term  
“church” includes mosques, temples,  
synagogues, etc. If you select this box,  
complete Schedule A.  
509(a)(3). Select this classification if  
you’re organized and operated to support  
one or more public charities described in  
section 509(a)(1) or 509(a)(2) or an  
organization that is tax exempt under  
section 501(c)(4), (5), or (6) and meets the  
public support test of section 509(a)(2).  
See the instructions for Schedule D for  
more information about the requirements  
for this classification, including the  
required relationship you must have with  
your supported organization(s). Complete  
Schedule D.  
Revenue and Expenses, lines 1 and 2.  
Under this public charity  
classification, you must meet the one-third  
public support test or 10% facts and  
circumstances test. See Pub. 557 for more  
information.  
509(a)(1) and 170(b)(1)(A)(ii). Select  
this classification if your primary purpose  
is operating a school. If you select this  
box, complete Schedule B.  
Public support test. An organization  
must receive either:  
1. At least one-third of its total support  
from governmental agencies,  
If you operate a school but it isn’t your  
contributions from the general public, and  
contributions or grants from other public  
charities; or  
primary purpose, don’t select this  
classification. However, you must still  
complete Schedule B. See Part IV, line 12.  
509(a)(4). Select this classification if your  
primary purpose is to test products to  
determine their acceptability for use by the  
general public.  
Contributions to organizations of this  
type aren’t deductible under section  
170(c). Also, organizations that primarily  
test for specific manufacturers don’t  
qualify for exemption under section 501(c)  
(3).  
2. At least 10% of its total support  
509(a)(1) and 170(b)(1)(A)(iii). Select  
this classification if your primary purpose  
is providing medical or hospital care or  
medical eduction or research (performed  
in association with a hospital). If you select  
this box, complete Schedule C.  
A hospital includes a rehabilitation  
institute, outpatient clinic, community  
mental health clinic, drug treatment  
center, or skilled nursing facility. A hospital  
doesn’t include convalescent homes,  
homes for children or the aged, or  
institutions whose principal purpose or  
function is to train handicapped individuals  
to pursue some vocation.  
from governmental agencies,  
contributions from the general public, and  
contributions or grants from other public  
charities; and also satisfy a facts and  
circumstances test.  
Facts and circumstances test. Facts  
and circumstances include:  
1. The amount of support you  
received from the general public,  
governmental units, or public charities;  
Select my classification for me. Select  
this option if you believe you’re a public  
charity but would like the IRS to select the  
correct public charity classification (509(a)  
(1) and 170(b)(1)(A)(vi) or 509(a)(2)) for  
you.  
2. Whether you have a continuous  
and bona fide program for solicitation of  
funds from the general public,  
governmental units, or public charities, or  
carry on activities designed to attract  
support from organizations or other  
governmental units, and  
Private foundation. Select this  
classification if you don’t meet one of the  
exceptions listed above.  
Cooperative hospital service  
organizations described in section  
501(e) should also check this box and  
complete Schedule C.  
Line 1a. Section 508(e) provides that a  
private foundation isn’t tax exempt unless  
its organizing document contains  
specific provisions. These specific  
provisions require that you operate to  
avoid liability for excise taxes under  
sections 4941(d), 4942, 4943(c), 4944,  
and 4945(d). You can also meet these  
provisions by reliance on state law.  
See Pub. 557 for samples of provisions  
that will meet section 508(e). Also, see  
Appendix B for a list of states that have  
enacted statutory provisions that satisfy  
the requirement of section 508(e), subject  
to notations. Appendix B is based on Rev.  
Rul. 75-38, 1975-1 C.B. 161.  
3. All other facts and circumstances,  
including the public nature of your  
governing board, the extent to which your  
facilities or programs are publicly  
available, the extent to which nature your  
dues encourage membership, and  
whether your activities are likely to appeal  
to persons having a broad common  
interest or purpose. For additional  
information about the 10% facts and  
circumstances test, see Pub. 557 and  
Reg. 1.170A-9(f)(3).  
509(a)(1) and 170(b)(1)(A)(iv). Select  
this classification if you’re organized and  
operated exclusively to benefit a college  
or university owned or operated by a  
governmental unit. You must also normally  
receive a substantial part of your support  
from a governmental unit or from  
contributions from the general public.  
509(a)(1) and 170(b)(1)(A)(ix). Select  
this classification if you’re an agricultural  
research organization described in section  
170(b)(1)(A)(ix) operated in conjunction  
with a land grant college or university or a  
non-land grant college of agriculture.  
509(a)(2). Select this classification if you  
normally receive more than one-third of  
your support from contributions,  
membership fees, and gross receipts  
from activities related to your exempt  
Instructions for Form 1023  
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amount contributed must also be more  
than 2% of all the contributions you  
received. A creator of a trust is treated as  
a substantial contributor regardless of the  
amount contributed. For more information  
regarding substantial contributors, go to  
Line 1c. Some private foundations are  
private operating foundations. Private  
operating foundations make qualifying  
distributions directly for the active conduct  
of their educational, charitable, and  
religious purposes. “Directly for the active  
conduct” means that you use the  
Line 2a(i). 509(a)(2). Check “Yes,” if you  
received amounts listed on lines 1, 2, and  
9 of Part VI-A, Statement of Revenue and  
Expenses, from any disqualified  
persons and identify those disqualified  
persons by letter (A, B, C, etc.) and list the  
amounts contributed by each. Keep, but  
don’t submit, a list of the names of your  
donors with the associated letter  
distributions yourself to carry out the  
programs for which you’re organized and  
operated. Grants made to assist other  
organizations or individuals are normally  
considered indirect.  
designations.  
Family members. A “member of the  
family” includes the spouse, ancestors,  
children, grandchildren,  
Line 2a(ii). Check “Yes,” if you received  
amounts paid by an individual or  
Line 1d. If you have existed for 1 year or  
more, you must provide information that  
demonstrates you meet the requirements  
to be classified as a private operating  
foundation, including the income test and  
organization greater than the larger of 1%  
of line 10, of Part VI-A, Statement of  
Revenues and Expenses, or $5,000 for  
any completed tax year, and identify those  
individuals or organizations by letter and  
great-grandchildren, and their spouses.  
For additional information concerning  
members of the family, go to IRS.gov/  
either the endowment test, the assets test, list the amount(s) received from each.  
Further information about disqualified  
persons, can be obtained at IRS.gov/  
or the support test. If you have existed for  
less than 1 year, you must sufficiently  
describe how you’re likely to meet these  
requirements and tests. You may also  
submit an affidavit or opinion of counsel  
giving enough facts about your operations  
and support to enable us to determine that  
you’re likely to meet these requirements.  
Keep, but don’t submit, a list of the names  
of your donors with the associated letter  
designations.  
Don’t include disqualified persons  
Line 2a(iii). Use Schedule A (Form 990  
or 990-EZ), Public Charity Status and  
Public Support, Part III, Support Schedule  
for Organizations Described in Section  
509(a)(2), and its instructions to determine  
if you meet the public support test for your  
most recent 5-year period.  
in this list. Disqualified persons  
!
CAUTION  
should be listed in line 2(a)(i). For  
purposes of this application, a  
disqualified person” is any individual or  
organization that is any of the following.  
See Pub. 557 for additional information  
about private operating foundations.  
1. A substantial contributor” to you  
Line 2. Confirmation of public support  
status. If you have been in existence for  
more than 5 years, and you requested  
classification as a public charity described  
in sections 509(a)(1) and 170(b)(1)(A)(vi),  
you must confirm that you meet the public  
support test.  
To show that you meet the required  
public charity support test, complete lines  
2(i) and 2(ii). Calculate your public support  
based on the accounting method you used  
to complete Part VI-A, Statement of  
Revenues and Expenses.  
(defined below).  
2. An officer, director, trustee, or any  
other individual who has similar powers or  
responsibilities.  
3. An individual who owns more than  
20% of the total combined voting power of  
a corporation that is a substantial  
contributor.  
4. An individual who owns more than  
20% of the profits interest of a partnership  
that is a substantial contributor.  
5. An individual who owns more than  
20% of the beneficiary interest of a trust or  
estate that is a substantial contributor.  
6. A member of the family of any  
individual described in 1, 2, 3, 4, or 5  
above.  
7. A corporation in which any  
individuals described 1, 2, 3, 4, 5, or 6  
above hold more than 35% of the total  
combined voting power.  
8. A trust or estate in which any  
individuals described in 1, 2, 3, 4, 5, or 6  
above hold more than 35% of the  
beneficial interests.  
9. A partnership in which any  
individuals described in 1, 2, 3, 4, 5, or 6  
above hold more than 35% of the profits  
interest.  
Part VIII. Effective Date  
Line 1. Use the formation date you listed  
in Part II, line 2, and the date you will  
submit this electronic form and required  
user fee payment to determine whether  
you’re submitting this application within 27  
months from the month in which you were  
formed. If you’re not submitting this  
application within 27 months from your  
formation, complete Schedule E.  
Line 2(i). 509(a)(1) and 170(b)(1)(A)  
(vi). Check “Yes,” if you received  
contributions from any person, company,  
or organization (other than a governmental  
unit described in section 170(c)(1) or a  
publicly supported organization under  
section 170(b)(1)(A)(vi)), whose gifts  
totaled more than 2% of the amount on the  
total of amounts entered on line 8 of Part  
VI-A, Statement of Revenue and  
Part IX. Annual Filing  
Requirement  
Most organizations must file an annual  
return (Form 990, 990-EZ, or Form  
990-PF) or notice (Form 990-N, Electronic  
Notice (e-Postcard)). Exceptions to this  
rule include churches, certain church  
affiliated organizations, and certain  
affiliates of a governmental unit. You can  
find more detailed information about filing  
requirements and exceptions from the  
requirement to file in the Instructions for  
Form 990.  
Expenses, and identify those contributors  
by letter (A, B, C, etc.) and list the  
amount(s) contributed by each. Keep, but  
don’t submit, a list of the names of your  
donors with the associated letter  
The following are some general rules.  
designations.  
A private foundation must file Form  
990-PF annually, regardless of its gross  
receipts.  
Line 2(ii). Use Schedule A (Form 990 or  
990-EZ) Public Charity Status and Public  
Support, Part II, Support Schedule for  
Organizations Described in Sections  
170(b)(1)(A)(iv) and 170(b)(1)(A)(vi), and  
its instructions to determine if you met the  
public support test for your most recent  
5-year period.  
Unless specifically required to file Form  
990 or Form 990-EZ (see the Instructions  
for Form 990), most public charities that  
normally have gross receipts of $50,000 or  
less may satisfy their filing obligation with  
Form 990-N, Electronic Notice  
Substantial contributor. A substantial  
contributor is any individual or  
organization that gave more than $5,000  
to you from the date you were formed or  
other date that your exemption would be  
effective, to the end of the year in which  
the contributions were received. This total  
(e-Postcard).  
Instructions for Form 1023  
-15-  
   
If you fail to file a required  
The characteristics generally attributed to  
churches are:  
activities conducted as part of your  
information return or notice for 3  
consecutive years, your exempt  
services further your religious purposes.  
!
CAUTION  
A distinct legal existence,  
Line 7a. Enter the average number of  
members and non-members who attend  
your regularly scheduled religious  
services.  
status will be automatically revoked.  
A recognized creed and form of  
worship,  
Line 1. Check “Yes,” if you’re claiming  
you are excepted from filing a Form  
990-series return or notice and indicate  
the reason you believe you’re excepted  
from filing. See Pub. 557 and the  
A definite and distinct ecclesiastical  
government,  
Line 8. An “established place of worship”  
is a place where you hold regularly  
scheduled religious services. It may be a  
place that you own, rent, or that is  
provided free for your use.  
A formal code of doctrine and  
discipline,  
A distinct religious history,  
Instructions for Form 8940, Request for  
Miscellaneous Determination, for more  
information on the requirements for the  
various filing exceptions. Provide  
A membership not associated with any  
other church or denomination,  
Ordained ministers ministering to the  
Line 9. An “established congregation” or  
“other religious membership group”  
includes individuals who regularly attend  
and take part in the religious services of  
your organization at an established  
location. An established congregation  
generally doesn’t include members of only  
one family. If you answer “No,” because  
you don’t have an established  
congregation,  
Ordained ministers selected after  
information regarding how you meet your  
requested exception in your narrative  
description of activities or as part of an  
uploaded supplemental response.  
completing prescribed courses of study,  
A literature of its own,  
Established places of worship,  
Regular congregations,  
Regular religious services,  
Sunday schools for the religious  
Part X. Signature  
Signature requirements. An officer,  
director, trustee, or other official who is  
authorized to sign for the organization  
must sign Form 1023. The signature must  
be accompanied by the title or authority of  
the signer and the date.  
instruction of the young, and  
congregation or other religious  
Schools for the preparation of ministers.  
membership, you may be a religious  
organization that doesn’t qualify as a  
church. If you don’t qualify as a church,  
you will need to go back to Part VII, line 1,  
to reconsider your public charity  
Although you don’t need to meet each of  
the above criteria to be classified as a  
church, you’re generally required to have  
a congregation or other religious  
membership group. For purposes of  
foundation classification under section  
509(a)(1) and 170(b)(1)(A)(i), the term  
“church” includes, without limitation,  
mosques, temples, and synagogues, and  
certain other forms of religious  
classification.  
The person signing Form 1023  
You may request classification as  
must be listed as an officer,  
TIP  
a church at a later date after you  
establish a congregation or other  
TIP  
director, or trustee within the first  
five entries of Part I, line 9.  
religious membership group. For  
information about this option, see Form  
8940, Request for Miscellaneous  
Determination Under Section 507, 509(a),  
4940, 4942, 4945, and 6033 of the Internal  
Revenue Code, or contact our customer  
account service representatives at  
877-829-5500 (toll-free).  
Upload Checklist  
Documents to upload. Check the boxes  
to indicate which documents are included  
in the file you upload with your application.  
organizations. For more information, see  
Pub. 1828.  
The practices and rituals associated with  
your religious beliefs or creed must not be  
illegal or contrary to public policy.  
You must upload a copy of your  
organizing document and any  
amendments to it along with a copy of  
your bylaws, if adopted. The other listed  
documents are not required.  
Line 9a. Enter the total number of your  
current members. If you have no  
members, enter zero (0).  
Specific Line Items  
Line 1. Describe your written creed,  
Put your name and EIN on each page  
of your supplemental response and  
identify the part and line number to which  
the information relates.  
Pay.gov can accommodate only one  
uploaded file. Consolidate your  
attachments into a single PDF file, which  
cannot exceed 15MB.  
If your PDF file exceeds the 15MB limit,  
remove any items over the limit and  
contact IRS Customer Accounts Services  
at 877-829-5500 for assistance on how to  
submit the removed items.  
statement of faith, or summary of beliefs.  
Line 9b. Answer “Yes,” if you have a  
prescribed way to become a member.  
Answer “Yes,” even if you just keep  
records of who is currently a member.  
Describe any actions required for  
individuals to become members.  
Line 2. Your literature includes any  
writings about your beliefs, rules, or  
history.  
Line 3. A “code of doctrine and discipline”  
refers to a body of laws or rules that  
govern behavior.  
Line 9c. Describe any rights and benefits  
of members. You should include details of  
any levels of membership and the rights  
and/or benefits associated with each level.  
Line 4. A “religious hierarchy or  
ecclesiastical government” refers to  
people or institutions that exercise  
significant influence or authority over your  
church.  
Line 9d. If your members may be  
associated with another denomination or  
church, describe the circumstances in  
which your members would be members  
of your church and another church.  
Schedule A. Churches  
Line 5. Answer “Yes,” if you’re part of a  
group of churches with similar beliefs and  
structures, such as a convention,  
There is no single definition of the word  
“church” for tax purposes. When  
Line 9e. See Appendix C for a  
description of the word “family.”  
determining whether a section 501(c)(3)  
religious organization is described as a  
church (described in section 509(a)(1) and  
170(b)(1)(A)(i)), we will consider  
association, or union of churches.  
Line 6. A “form of worship” refers to  
religious practices that express your  
devotion to your creed, faith, or beliefs.  
Line 10. Answer “Yes,” if you conduct  
baptisms, weddings, funerals, or other  
religious rites.  
characteristics generally attributed to  
churches and the facts and circumstances  
of each organization applying for public  
charity classification as a “church.”  
Line 7. Indicate the regular days and  
times of your religious services. Describe  
the order of events during your regular  
worship service and explain how the  
Line 11. A school for the religious  
instruction of the young refers to any  
Instructions for Form 1023  
-16-  
     
regularly scheduled religious, educational  
activities for youth.  
Certification by the appropriate state  
nondiscriminatory policy as to students as  
follows.  
authority or successful completion of  
required training for qualified teachers;  
Line 12. A “prescribed course of study”  
refers to formal or informal training. It  
doesn’t include self-ordination or paying a  
fee for an ordination certificate without  
completing a course of study. Describe  
the course of study completed by your  
religious leaders.  
The M school admits students  
of any race, color, national  
origin, and ethnic origin to all the  
rights, privileges, programs, and  
activities generally accorded or  
made available to students at  
the school. It doesn't  
discriminate on the basis of  
race, color, national origin, and  
ethnic origin in administration of  
its educational policies,  
Records of regular attendance by  
students at your facility; and  
A lease agreement or deed for your  
facility.  
If you answer “No,” you may not meet  
the requirements of a school and you may  
need to go back to Part VII, line 1, to  
reconsider your foundation classification if  
you requested classification as a school  
under sections 509(a)(1) and 170(b)(1)(A)  
(ii).  
Line 15. Provide any additional  
information you would like us to consider  
that would help us classify you as a  
church.  
admission policies, scholarship  
and loan programs, and athletic  
and other school-administered  
programs.  
Schedule B. Schools,  
Line 2. Answer “Yes,” if your primary  
function of the school is the presentation  
of formal instruction. If you answer “No,”  
you may not meet the requirements for  
classification as a school and may want to  
go back to Part VII, line 1, to reconsider  
your foundation classification if you  
Colleges, and Universities  
An organization qualifies as a school (for  
purposes of classification under sections  
509(a)(1) and 170(b)(1)(A)(ii)) if all the  
following applies. It:  
Annual certification. A private school  
must certify annually that it meets the  
requirements of Rev. Proc. 75-50, as  
modified by Rev. Proc. 2019-22, by filing  
Schedule A (Form 990, or Form 990-EZ)  
Organization Exempt Under Section  
501(c)(3).  
requested classification as a school under  
sections 509(a)(1) and 170(b)(1)(A)(ii).  
Presents formal instruction as its  
primary function,  
Line 3. Answer “Yes,” if you’re a public  
school and explain how you’re operated  
by the state or a subdivision of a state,  
including if you have a signed contract or  
agreement with a state or local  
Has a regularly scheduled curriculum,  
Has a regular faculty of qualified  
teachers,  
Has a regularly enrolled student body,  
Schools that don’t file Form 990 or  
990-EZ must make the certification by  
filing Form 5578, Annual Certification of  
Racial Nondiscrimination for a Private  
School Exempt From Federal Income Tax.  
and  
government under which you operate and  
receive funding. If you answer “Yes,” don’t  
complete the remainder of Schedule B.  
Has a place where educational  
activities are regularly carried on.  
The term “school” includes primary,  
secondary, preparatory, high schools,  
colleges, and universities. An organization  
won’t be described as a school under  
sections 509(a)(1) and 170(b)(1)(A)(ii) if it  
engages in both educational and  
Line 4. Answer “Yes,” if you were formed  
or substantially expanded when public  
schools in your district or county were  
desegregated by court order.  
Line 7. Answer “Yes,” if your organizing  
document or bylaws contain a  
nondiscriminatory statement as to  
students similar to the one shown above  
or if you adopted such a policy by  
If you're unsure whether to answer  
non-educational activities, unless the latter  
are merely incidental to the educational  
activities. Non-traditional schools such as  
an outdoor survival school or a yoga  
school may qualify. However, an  
“Yes,”contact an appropriate  
!
resolution of your governing body. State  
where your policy is located in your  
organizing document, bylaws, or if it is in  
an adopted resolution. If you answered  
“No,” you must adopt a nondiscriminatory  
policy before submitting this application.  
CAUTION  
school official.  
Line 5. Answer “Yes,” if a state or federal  
administrative agency or judicial body ever  
determined your organization to be racially  
discriminatory. Identify the parties involved  
and the forum in which the case was  
presented. Explain the reason for the  
action, the decision reached, and provide  
legal citations (if any) for the decision.  
Also, explain in detail any changes made  
in response to the action against your  
organization or the decision reached.  
organization may further an educational  
purpose without satisfying all the  
conditions listed above that describe a  
school. Such organizations may qualify as  
public charities based upon their sources  
of support as organizations described in  
sections 509(a)(1) and 170(B)(1)(A)(vi) or  
section 509(a)(2).  
Line 8. Answer “Yes,” if your brochures,  
application forms, advertisements, and  
catalogues dealing with student  
admissions, programs, and scholarships  
contain a statement similar to the  
following:  
The M school admits students of any  
race, color, and national or ethnic  
origin.  
Specific Line Items  
Establishment of Racially  
Nondiscriminatory Policy  
Line 1. Answer “Yes,” if you have a  
regularly scheduled curriculum, a regular  
faculty of qualified teachers, a regularly  
enrolled student body, and facilities where  
your educational activities are regularly  
carried on.  
Every private school is subject to the  
provisions of Revenue Procedure 75-50,  
1975-2 C.B. 587, modified by Rev. Proc.  
2019-22, 2019-22 I.R.B. 1260. See Pub.  
557, which sets forth the requirements of  
Rev. Proc. 75-50 under the section for  
Private Schools.  
Line 8a. If you answered “No” to Line 8,  
check the box on line 8a if you agree that  
all future printed materials, including  
website content, will contain a statement  
of nondiscriminatory policy as to students  
similar to the one provided above.  
If you answer “Yes,”you should  
maintain in your records evidence  
that you meet these factors, such  
TIP  
Publication of racially nondiscrimina-  
tory policy. A section 501(c)(3)  
organization that is a private school must  
publish a notice of its racially  
Line 9. You must make your  
as:  
nondiscriminatory policy known to all  
segments of the general community  
served by the school. One way to meet  
this requirement is to publish your  
A list of required courses of study,  
dates and times courses are offered, and  
other information about how to complete  
required courses;  
-17-  
       
nondiscriminatory policy annually in a  
newspaper or over broadcast media. Rev.  
Proc. 2019-22 now allows this publication  
requirement to be satisfied by  
If you complete line 12 indicating  
you do or will provide loans or  
scholarships, be sure your  
hospital if its principal function is providing  
treatment services, as described above.  
TIP  
A hospital doesn't include convalescent  
homes, homes for children or the aged, or  
institutions whose principal purposes or  
function is to train handicapped individuals  
to pursue a vocation.  
response to Part IV, line 15 is consistent  
with your response here.  
continuously displaying your  
nondiscrimination statement on your  
Internet site, as described below.  
Check “Yes,” if you make your racially  
nondiscriminatory policy known to all  
segments of the general community you  
serve by:  
Line 13. Identify each of your  
incorporators, founders, board members,  
donors of land, and donors of buildings by  
name (whether individuals or  
organizations).  
Medical research organization. An  
organization is a “medical research  
organization” if its principal purpose or  
function is the direct, continuous, and  
active conduct of medical research in  
conjunction with a hospital. The hospital  
with which the organization is affiliated  
must be described in section 501(c)(3), a  
federal hospital, or an instrumentality of a  
governmental unit, such as a municipal  
hospital.  
Publishing a notice of your policy in a  
Line 14. Answer “Yes,” if any individuals  
or organizations on your list have an  
objective to keep public or private school  
education segregated by race and explain  
how these individuals or organizations  
promote segregation in public or private  
schools.  
newspaper of general circulation that  
serves all racial segments of the  
community;  
publicizing your policy over broadcast  
media in a way that is reasonably  
expected to be effective; or  
display a notice of your policy at all  
Line 15. Answer “Yes,” if on a continuing  
basis, you will maintain for a minimum  
period of 3 years the following records.  
times on your primary, publicly accessible  
Internet homepage in a manner  
reasonably expected to be noticed by  
visitors to the homepage.  
“Medical research” means investigations,  
experiments, and studies to discover,  
develop, or verify knowledge relating to  
the causes, diagnosis, treatment,  
prevention, or control of human physical or  
mental diseases and impairments. For  
more information, see Regulations section  
1.170A-9(c)(2).  
Your racial composition (similar to the  
information requested on Schedule B,  
line 11).  
See Rev. Proc. 75-50, as modified by  
Rev. Proc. 2019-22, for guidance on the  
format and content of the required notice  
and whether any exceptions may apply to  
you.  
Evidence that your scholarships and  
loans are awarded on a racially  
nondiscriminatory basis (similar to the  
information requested on Schedule B,  
line 12).  
A notice published in the legal  
Cooperative hospital service  
Copies of all materials used by you or  
notices section or classified  
advertisements of your local  
TIP  
organization. A cooperative hospital  
service organization performs one or more  
of the specific services listed below for  
one or more exempt hospitals on a  
cooperative basis. The services listed  
below are exclusive. A cooperative service  
organization that provides services other  
than those listed below, or that provides  
services to an organization other than an  
exempt hospital, doesn’t qualify for  
exemption under section 501(c)(3). The  
list of services includes:  
on your behalf to solicit contributions.  
Copies of brochures, application forms,  
newspaper generally is not acceptable.  
advertisements, and catalogues dealing  
with student admissions, programs, and  
financial aid.  
Line 9a. If you answered “No,” to line 9,  
check the box on line 9a if you agree that  
you will publicize your nondiscriminatory  
policy in a way that meets the  
Answer “No,” if you don’t maintain  
records and explain how you meet the  
recordkeeping requirements under Rev.  
Proc. 75-50.  
requirements of Revenue Procedure 75–  
50, as modified by Revenue Procedure  
2019-22.  
Failure to maintain these records  
Line 11. Enter the racial composition of  
your student body, faculty, and  
or produce them upon the proper  
!
CAUTION  
request will create a presumption  
1. Data processing;  
administrative staff in the spaces  
that you haven’t complied with the  
requirements of Rev. Proc. 75-50.  
2. Purchasing (including the  
provided. Enter actual numbers, rather  
than percentages, for the current year and  
projected numbers for the next academic  
year. If the number is zero, then enter “0.”  
purchasing of insurance on a group basis);  
Schedule C. Hospitals and  
Medical Research  
Organizations  
3. Warehousing;  
4. Billing and collection (including the  
purchasing of patron accounts receivable  
on a recourse basis);  
If you’re not operational, submit an  
estimate based on the best information  
available (such as the racial composition  
of the community you serve).  
5. Food;  
6. Clinical;  
7. Industrial engineering;  
8. Laboratory;  
9. Printing;  
An organization qualifies as a hospital for  
purposes of classification under sections  
509(a)(1) and 170(b)(1)(iii) if it is a:  
Don’t identify students, faculty,  
Hospital,  
and staff by name.  
!
Medical research organization  
CAUTION  
operated in conjunction with a hospital, or  
Line 12. Enter the racial composition of  
students to whom you award loans and  
scholarships in the spaces provided. Enter  
actual numbers, rather than percentages,  
for the current year and projected  
Cooperative hospital service  
10. Communications;  
11. Record center; and  
organization.  
Hospital. An organization is a “hospital”  
if its principal purpose or function is  
providing medical or hospital care or  
medical education or research. Medical  
care includes treatment of any physical or  
mental disability or condition, on an  
inpatient or outpatient basis. Thus, if an  
organization is a rehabilitation institution,  
outpatient clinic, or community mental  
health or drug treatment center, it is a  
12. Personnel services (including  
selection testing, training, and education  
of personnel).  
numbers for the next academic year. If the  
number is zero, then enter “0.” If you won’t  
provide any loans or scholarships, check  
the box provided.  
Specific Line Items  
Don’t identify students by name.  
Line 1. Answer “Yes,” if your organization  
is a medical research organization, as  
described above.  
!
CAUTION  
-18-  
       
to indicate how you determine who is  
eligible for the services, how you inform  
the general public about your policy, any  
requirements you require of patients to  
receive reduced cost or free care, and any  
agreements you might have with  
the broad interests of the community  
served by the hospital facility, including  
those with special knowledge of or  
expertise in public health, and must be  
made widely available to the public. Each  
hospital facility must conduct a CHNA at  
least once every 3 years and adopt an  
implementation strategy to meet the  
community health need identified through  
such CHNA.  
Answer “Yes,” if the hospital facility  
conducted a complying CHNA in the  
current tax year or in either of the 2  
immediately preceding tax years or if the  
hospital facility intends to conduct a  
CHNA before the end of its first 3-year  
period.  
Line 1a. As a medical research  
organization, you must be associated with  
a hospital described in section 501(c)(3),  
a federal hospital, or an instrumentality of  
a government. Provide the name of the  
hospital(s) you’re associated with and  
describe the relationship(s).  
municipalities or government agencies to  
subsidize the cost of admitting or treating  
patients through this policy.  
Line 1b. List your assets and their fair  
market value and the portion of your  
assets directly devoted to medical  
research. Don’t complete the remainder of  
Schedule C.  
Line 7. Answer “Yes,” if you have a  
formal program of medical training and  
research. If you answer “Yes,” describe  
your program, including the programs you  
offer, the scope of such programs, and  
affiliation with other hospitals or medical  
care providers with which you carry on the  
medical training or research programs.  
Line 2. Answer “Yes,” if you’re a  
cooperative hospital service organization  
and describe the services you provide to  
your member hospitals and the exempt  
status of your membership. Don’t  
Line 10b. A financial assistance policy  
(FAP), sometimes referred to as a charity  
care policy, is a policy describing how an  
organization will provide financial  
Line 8. Answer “Yes,” if you have a  
formal program of community educational  
programs and describe your programs,  
including the types of programs offered,  
the scope of the programs, and affiliation  
with other hospitals or medical care  
providers with whom you offer community  
educational programs.  
complete the remainder of Schedule C.  
Line 3. Answer “Yes,” if all the doctors in  
your community are eligible for staff  
privileges at your facility. You must answer  
“Yes,” even if staff privileges at your  
facilities are limited by capacity, provided  
that all qualified medical professionals in  
your community may seek and would be  
considered for eligibility.  
Answer “No,” if all doctors in your  
community aren’t eligible for staff  
privileges at your facility.  
If you answer “No,” describe in detail  
how you limit eligibility for staff privileges  
at your facility. Include details of your  
eligibility criteria and selection procedures  
for your courtesy staff of doctors.  
assistance at its hospital(s) and other  
facilities, if any. Financial assistance  
includes free or discounted health  
services provided to persons who meet  
the organization’s criteria for financial  
assistance and are unable to pay for all or  
a portion of the services. Financial  
assistance doesn’t include:  
Line 9. Answer “Yes,” if you have a board  
of directors that is representative of the  
community you serve or if an  
organization described under section  
501(c)(3) with a community board  
exercises rights or powers over you.  
Bad debt or uncollectible charges that  
the organization recorded as revenue but  
wrote off due to a patient’s failure to pay or  
the cost of providing such care to such  
patients;  
Answer “Yes,”if you’re subject to a  
state corporate practice of medicine law  
that requires your governing board to be  
composed solely of physicians licensed to  
practice medicine in the state.  
The difference between the cost of care  
provided under Medicaid or other  
means-tested government programs or  
under Medicare and the revenue derived  
therefrom;  
Line 4. Answer “Yes,” if you admit all  
patients in your community who can pay  
for themselves or through some form of  
third-party reimbursement (for example,  
private health insurance, Medicare, or  
Medicaid).  
Answer “No,” if you limit admission for  
these individuals in any way and describe  
your admission policy in detail, including  
how and why you restrict patient  
admission.  
Line 9a. List each board member by  
name and describe that person’s  
Self-pay or prompt pay discounts; or  
Contractual adjustments with any  
relationship to you. Also, for each board  
member, describe if and how that  
individual represents the community.  
Generally, hospital employees and staff  
physicians aren’t individuals considered to  
be community representatives. If you  
operate under a parent organization  
whose board of directors isn’t comprised  
of a majority of individuals who are  
representative of the community you  
serve, provide the requested information  
for your parent organization's board of  
directors as well.  
third-party payors.  
Answer “Yes,” if the hospital facility has  
adopted a written financial assistance  
policy and a written policy relating to  
emergency medical care as required by  
section 501(r)(4).  
Line 10c. Under section 501(r)(5), the  
maximum amounts that can be charged to  
FAP-eligible individuals for emergency or  
other medically necessary care are the  
amounts generally billed to individuals  
who have insurance covering such care.  
Line 5. Answer “Yes,” if you offer  
emergency medical or hospital care at  
your facility on a 24-hour basis, seven  
days a week.  
Line 5a. Answer “Yes,” if the reason you  
don’t maintain a full-time emergency room  
is either because you’re a specialty  
Line 10. Section 501(r). Answer “Yes,” if  
you operate a facility that is required by a  
state to be licensed, registered, or  
Answer “Yes,” if the hospital facility:  
hospital where emergency care would be  
inappropriate for the services you provide  
or another emergency medical care facility  
that provides such services is located so  
near to you as to make such services as  
you might provide duplicative.  
1. Limits or will limit any charges to  
FAP-eligible individuals to whom the  
hospital facility provided emergency or  
other medically necessary services to not  
more than the amounts generally billed to  
individuals who had insurance covering  
such care; and  
similarly recognized as a hospital.  
Organizations that respond “Yes,” to this  
question are required to meet additional  
requirements described in section 501(r)  
to be considered a hospital exempt from  
taxation by section 501(c).  
Line 6. Answer “Yes,” if you provide free  
or low-cost medical or hospital care  
services. If you answer “Yes,” describe  
your policy and to whom you provide  
these services. Include details on how  
these services promote benefits to the  
community. For example, you may want  
Line 10a. A community health needs  
assessment (CHNA) is an assessment of  
the significant health needs of the  
2. Prohibits, or upon beginning  
operations will prohibit, the use of gross  
charges as described in section 501(r)(5).  
community. To meet the requirements of  
section 501(r)(3), a CHNA must take into  
account input from persons who represent  
The hospital facility may check “Yes,” if  
it charged more than the amounts  
generally billed to individuals who had  
Instructions for Form 1023  
-19-  
insurance covering such care to an  
individual if:  
It meets one of three required  
is vested in the same persons who control  
or manage your supported  
organization(s).  
relationship tests with the supported  
organization(s); and  
The charge in excess of the amounts  
generally billed (AGB) wasn’t made or  
requested as a pre-condition of providing  
medically necessary care to the  
FAP-eligible individual;  
It isn’t controlled by disqualified  
Type III (“operated in connection  
persons,” directly or indirectly. See  
Appendix C for a definition of a  
disqualified person.”  
with” relationship; responsive to the  
needs or demands of, and having  
significant involvement in the affairs of, the  
supported organization(s)): One or more  
of your officers, directors, or trustees are  
elected or appointed by the officers,  
directors, trustees, or membership of your  
supported organization(s); one or more of  
your officers, directors, trustees, or other  
important office holders are also members  
of the governing body of your supported  
organization(s); or your officers, directors,  
or trustees maintain a close and  
As of the time of the charge, the  
A supporting organization can also  
support the charitable purposes of  
organizations that are exempt under  
sections 501(c)(4), (5), or (6).  
FAP-eligible individual hadn’t submitted a  
complete FAP application and hadn’t  
otherwise been determined by the hospital  
facility to be FAP eligible for the care; and,  
If the individual subsequently submits a  
Specific Line Items  
complete FAP application and is  
determined to be FAP-eligible for care, the  
hospital facility refunds any amount that  
exceeds the amount he or she is  
determnined to be personally responsible  
for paying as a FAP-eligible individual,  
unless such excess amount is less than  
$5.  
Line 1. List the name, address, and EIN  
of each organization you support.  
Line 2. Answer “Yes,” if each supported  
organization has a letter from the IRS  
recognizing it as a public charity under  
section 509(a)(1) or 509(a)(2).  
continuous working relationship with the  
officers, directors, or trustees of your  
supported organization(s).  
If you don't meet one of these  
Before you file your application,  
Line 10d. Answer “Yes,” if the hospital  
facility has, or will have at the beginning of  
operation, either a separate written billing  
and collections policy, or include in a  
written FAP:  
three relationship tests, you aren't  
described in section 509(a)(3) and  
TIP  
use Tax Exempt Organization  
Search on IRS.gov to confirm  
TIP  
should review the other foundation  
whether each of your supported  
organizations is currently recognized as  
exempt and is classified as a public  
charity.  
classification options in Part VII, line 1.  
Line 4. Describe how your governing  
board and officers are selected, including  
where (if applicable) this information is in  
your governing document, bylaws, or  
other internal rules and regulations.  
A description of any actions that the  
hospital facility (or other authorized party)  
may take related to obtaining payment of a  
bill for medical care, including, but not  
limited to, any extraordinary collection  
actions (ECAs);  
Line 2a. Answer “Yes,” if any supported  
organization you listed on line 1 received a  
letter from the IRS stating that it’s exempt  
under sections 501(c)(4), (5), or (6) and  
meets the public support test under  
section 509(a)(2). See Pub. 557 for  
information on the public support test for  
section 509(a)(2).  
If you answer “No,” describe how each  
organization you support is a public charity  
under section 509(a)(1) or 509(a)(2). For  
example, if you support a church or  
foreign organization that hasn’t received a  
determination letter recognizing it as a  
public charity, you should describe how  
this organization qualifies as a public  
charity under section 509(a)(1) or 509(a)  
(2). See Pub. 557 for information on public  
charities under sections 509(a)(1) and  
509(a)(2).  
Type III organizations must also  
The process and time frames the  
describe how your officers, directors, or  
trustees maintain a close and continuing  
relationship with the officers, directors, or  
trustees of your supported organization(s).  
hospital facility (or other authorized party)  
uses in taking those actions (including, but  
not limited to, the reasonable efforts it will  
make to determine whether an individual  
is FAP-eligible before engaging in ECAs);  
and  
Line 5. Prohibited control by disquali-  
fied person. You can’t be described in  
section 509(a)(3) if you’re directly or  
indirectly controlled by disqualified  
persons. You are controlled if disqualified  
persons:  
The office, department, committee, or  
other body with the final authority or  
responsibility for determining that the  
hospital facility has made reasonable  
efforts to determine whether an individual  
is FAP-eligible and may therefore engage  
in ECAs against the individual.  
Can exercise 50% or more of the total  
voting power of your governing body;  
Have authority to affect significant  
decisions, such as power over your  
investment decisions, or power over your  
charitable disbursement decisions; or  
Schedule D. Section  
509(a)(3) Supporting  
Organizations  
Can exercise veto power over your  
Line 3. Relationship test. To qualify  
under section 509(a)(3), you must show  
that you meet one of three relationship  
tests with your supported organization(s).  
Select the option that best describes your  
relationship with your supported  
actions.  
Although control is generally  
demonstrated where disqualified persons  
have the authority over your governing  
body to require you to take an action or  
refrain from taking an action, indirect  
control by disqualified persons will also  
disqualify you as a supporting  
Supporting organizations are described in  
section 509(a)(3). The term “supported  
organization” refers to an organization that  
a supporting organization benefits. A  
supporting organization may support more  
than one supported organization.  
organization(s).  
Type I (“operated, supervised, or  
controlled by” relationship; comparable  
to a parent–subsidiary relationship): A  
majority of your governing board or  
officers are elected or appointed by the  
governing body, members of the  
organization.  
See Appendix C for a description of the  
terms “disqualified person,” “family,”  
foundation manager,” and “business  
relationship.”  
An organization qualifies as a supporting  
organization (for purposes of classification  
under section 509(a)(3)) if:  
governing body, officers acting in their  
official capacity, or the membership of  
your supported organization(s).  
It is organized and at all times thereafter  
is operated exclusively for the benefit of,  
to perform the function of, or to carry out  
the purposes of one or more public  
charities described in section 509(a)(1) or  
509(a)(2);  
Public charities and foundation  
managers who otherwise are  
TIP  
Type II (“supervised or controlled in  
disqualified persons only because  
connection with” relationship;  
comparable to a brother–sister  
they are foundation managers aren't  
disqualified persons for this purpose.  
relationship): Your control or management  
-20-  
   
officers, directors, or trustees of each  
supported organization; and  
2. Exercise a substantial degree of  
direction over the policies, programs, and  
activities of each supported organization.  
modifications, reduced by total  
deductions. Gross income doesn’t include  
gifts, grants, or contributions. See  
Appendix C.  
Line 7. Organizational test. If you  
answered “No,” you are a Type III  
supporting organization, you must amend  
your organizing document to specify  
your supported organization(s) by name;  
or you won’t meet the organizational test  
under section 509(a)(3) and need to  
reconsider your requested public charity  
classification in Part VII, line 1.  
For purposes of this line, “non-exempt-use  
assets” are all assets of the supporting  
organization other than:  
1. Assets described in Regulations  
section 53.4942(a)(2)(c)(2)(i) through (iv),  
and  
2. Exempt-use assets, which are  
assets that are used (or held for use)  
directly in carrying out the exempt  
purposes of your supported organization.  
See Regulations section 1.509(a)-4(i)(8)  
for more information.  
For example, N, an organization  
described in section 501(c)(3), is the  
parent organization of a healthcare system  
consisting of two hospitals (Q and R) and  
an outpatient clinic (S), each of which is  
described in section 509(a)(1), and a  
taxable subsidiary (T). N is the sole  
member of each of Q, R, and S. Under the  
charter and bylaws of each of Q, R, and S,  
N appoints all members of the board of  
directors of each corporation. N engages  
in the overall coordination and supervision  
of the healthcare system’s exempt  
Line 7a. If you answered “No,” you won’t  
meet the organizational test under section  
509(a)(3) unless you amend your  
organizing document to specify your  
supported organization(s) by name,  
purpose, or class, and need to reconsider  
your requested public charity classification  
in Part VII, line 1.  
Line 13a. List the total amount you  
distribute(d) annually to each supported  
organization. Also, indicate how each  
amount will vary from year to year.  
Line 8. When responding to this question,  
don’t include donors that are section  
509(a)(1), (2), or (4) organizations.  
subsidiary corporations Q, R, and S in  
approval of their budgets, strategic  
planning, marketing, resource allocation,  
securing tax-exempt bond financing, and  
community education. N also manages  
and invests assets that serve as  
This prohibition on contributions  
Line 13b. List the total annual income for  
each supported organization. If you  
from controlling donors only  
applies to Type I and Type III  
TIP  
distribute your income to, or for the use of,  
a particular department or program of an  
organization, list the annual revenue of the  
supported department or program.  
supporting organizations.  
endowments of Q, R, and S.  
Line 12. Answer “Yes,” if you conduct  
activities that the supported organization  
would otherwise need to conduct in  
furtherance of its exempt purposes and  
describe the activities that you conduct.  
Line 9. Type III responsiveness test.  
Answer “Yes,” if, because of your  
relationship described in line 3, the  
supported organization has a significant  
involvement in your investment policies,  
making and timing of grants, and directing  
the use of your income and assets, and  
explain how your supported organization  
is involved in these matters.  
Line 13c. Answer “Yes,” if your funds are  
earmarked” for a particular program or  
activity conducted by your supported  
organization.  
Holding title to and managing assets  
that are used (or held for use) directly in  
carrying out the exempt purposes of your  
supported organization (exempt-use  
assets) are activities that directly further  
the exempt purposes of your supported  
organization. Conversely, with certain  
exceptions, fundraising, making grants  
(whether to the supported organization or  
to third parties), and investing and  
Schedule E. Effective Date  
The questions in this schedule will help us  
determine the effective date of exemption  
if you’re either seeking reinstatement after  
automatic revocation or you’re filing this  
application more than 27 months after the  
end of the month in which you were legally  
formed.  
Line 10. Type III notification require-  
ment. A Type III supporting organization  
must provide the notice described in this  
question. If you’re a Type III supporting  
organization, you’ll be required to answer  
this question annually on your annual  
information return (Schedule A of Form  
990 or 990-EZ).  
managing non-exempt-use assets aren’t  
activities that directly further the exempt  
purposes of the supported organization.  
See Regulations section 1.509(a)-4(i)(4)  
Specific Line Items  
Lines 11–13. Type III integral part test.  
Line 1. Answer “Yes,” if your exempt  
status was automatically revoked under  
section 6033(j)(1) for failure to file required  
annual returns or notices for 3 consecutive  
years and you’re applying for  
An organization seeking classification as a (ii) for more information.  
Type III supporting organization must  
Line 13. To satisfy the integral part test  
meet an integral part test, which is  
satisfied by maintaining significant  
involvement in the operations of one or  
more supported organizations and  
providing support on which the supported  
organization(s) are dependent. A Type III  
supporting organization may be  
as a non-functionally integrated supporting  
organization, you must distribute at least  
85% of your annual net income or 3.5%  
of the aggregate fair market value of all  
of your non-exempt-use assets (whichever  
is greater) to your supported  
reinstatement.  
Rev. Proc. 2014-11, 2014-3 I.R.B. 411,  
at IRS.gov/irb/2014-03_IRB establishes  
several different procedures for reinstating  
an organization’s exempt status  
organization(s). You can use Part V of  
Schedule A (Form 990 or 990-EZ) to help  
determine your answer to this question.  
functionally integrated (lines 11–12) or  
non-functionally integrated (lines 13 and  
13a–c) depending on the manner in which  
it meets the integral part test. Functionally  
integrated Type III supporting  
depending upon its size, the number of  
times it’s been automatically revoked, and  
the timeliness of filing for reinstatement.  
Review the revenue procedure to  
The distributable amount for the  
first tax year an organization is  
TIP  
treated as a non-functionally  
integrated Type III supporting organization  
is zero.  
organizations are subject to fewer  
restrictions and requirements than  
non-functionally integrated Type IIII  
supporting organizations.  
determine which section applies to you.  
Line 1a. Select the section of Rev. Proc.  
2014-11 under which you’re applying for  
reinstatement.  
For purposes of this line, “net income” has  
the same meaning as the term “adjusted  
net income.” In general, “adjusted net  
income” is the excess of gross income,  
including gross income from any unrelated  
trade or business, determined with certain  
Line 11. Answer “Yes,” if you’re the  
parent of all your supported organizations  
because you:  
Section 4. Select this section if:  
You were eligible to file either Form  
990-EZ or Form 990-N for each of the 3  
consecutive years that you failed to file;  
1. Have the power to appoint or elect,  
directly or indirectly, a majority of the  
-21-  
 
This is the first time you’ve been  
Describe how you exercised ordinary  
business care and prudence in  
Schedule F. Low-Income  
Housing  
automatically revoked pursuant to section  
6033(j)(1); and  
determining and attempting to comply with  
your filing requirements in each of the 3  
years of revocation. Include a detailed  
explanation of all the facts and  
You’re submitting this application no  
To qualify for tax exemption, low-income  
housing must provide affordable housing  
for a significant segment of individuals in  
your community with low incomes. Your  
low-income housing may serve a  
later than 15 months after the later of the  
date of your Revocation Letter or the date  
on which the IRS posted your name on the circumstances that led to the failure, the  
Auto-Revocation List at  
discovery of the failure, and the steps you  
have taken or will take to avoid or mitigate  
future failures to file timely returns or  
notices.  
combination of purposes, such as for  
poor, frail, and elderly persons.  
By selecting this item, you’re also  
attesting that your failure to file wasn’t  
intentional and you’ve put in place  
procedures to file required returns or  
notices in the future.  
Specific Line Items  
Section 7. Select this section if you’re  
seeking reinstatement with an effective  
date of reinstatement of the date of  
submission of this application.  
Line 1. The “type” of facility may be an  
apartment complex, condominium,  
cooperative, or private residence, etc.  
If you were classified as a private  
foundation prior to your  
TIP  
Line 6. Answer “Yes,” if you charge daily,  
weekly, monthly, or annual fees or  
maintenance charges.  
Line 2. Generally, if you didn’t file Form  
1023 within 27 months of formation, the  
effective date of your exempt status will be  
the date you filed Form 1023 (submission  
date). We may grant requests for an  
earlier effective date when there’s  
evidence to establish you acted  
automatic revocation, you weren't  
eligible to file either Form 990-EZ or Form  
990-N and, therefore, aren't eligible to  
request reinstatement under Section 4.  
Line 8. Government programs include  
federal, state, or local government  
programs.  
If your exempt status was  
automatically revoked more than  
reasonably and in good faith, and the  
grant of relief won’t prejudice the interests  
of the government.  
Select the appropriate box to indicate  
whether you accept the submission date  
as the effective date of your exempt status  
or whether you are requesting an earlier  
effective date.  
!
CAUTION  
once, you’re not eligible for  
Schedule G. Successors  
to Other Organizations  
reinstatement under Section 4; however,  
you may apply for reinstatement under  
Section 5, Section 6, or Section 7.  
You should consider this schedule as a  
successor organization if any of the  
following situations pertain to you.  
Section 5. Select this section if:  
You took or will take over activities  
You’re ineligible to file for reinstatement  
previously conducted by another  
organization.  
under Section 4, and  
Line 2a. You may be eligible for  
consideration for relief from the  
requirement that you file Form 1023 within  
27 months of formation if you can  
establish that you acted reasonably and in  
good faith, and that granting an extension  
won’t prejudice the interests of the  
government.  
Describe in detail your reasons for filing  
late, how you discovered your failure to  
file, any reliance on professional advice or  
advice from the IRS, and any other  
information you believe will support your  
request for relief. Also, you may want to  
provide a comparison of (1) what your  
aggregate tax liability would be if you had  
filed this application within the 27-month  
period with (2) what your aggregate  
liability would be if you were exempt as of  
your formation date.  
You’re submitting this application not  
You took or will take over 25% or more  
later than 15 months after the later of the  
date of your Revocation Letter or the date  
on which the IRS posted your name on the  
Auto-Revocation List at  
of the fair market value of the net assets  
of another organization.  
You were established upon the  
conversion of an organization from  
for-profit to non-profit status.  
By selecting this item, you’re also  
attesting that you filed the required annual  
returns, your failure to file was not  
intentional, and you have put in place  
procedures to file required returns or  
notices in the future.  
The other organization is the  
predecessor organization. You should  
complete this schedule regardless of  
whether the predecessor (other  
organization) was exempt or not exempt  
from federal income tax.  
Describe how you exercised ordinary  
For purposes of this schedule, a  
for-profit” organization is one in which  
persons are permitted to have an  
ownership or partnership interest, such as  
corporate stock. It includes sole  
proprietorships, corporations, and other  
entities that provide for ownership  
interests.  
business care and prudence in  
determining and attempting to comply with  
your filing requirements in at least 1 of the  
3 years of revocation. Include a detailed  
explanation of all the facts and  
circumstances that led to the failure, the  
discovery of the failure, and the steps you  
have taken or will take to avoid or to  
mitigate future failures to file timely returns  
or notices.  
We may consider the following factors.  
You filed Form 1023 before we  
discovered your failure to file.  
You failed to file because of intervening  
Schedule H. Organizations  
Providing Scholarships,  
Fellowships, Educational  
Loans, or Other  
Section 6. Select this section if you are  
applying for reinstatement of your  
events beyond your control.  
You exercised reasonable diligence,  
tax-exempt status more than 15 months  
from the later of the date of the Revocation  
Letter or the date on which the IRS posted  
your name on the Auto-Revocation List at  
but you weren’t aware of the filing  
requirements. (The complexity of your  
filing and experience in these matters may  
be taken into consideration.)  
Educational Grants to  
Individuals and Private  
Foundations Requesting  
Advance Approval of  
Individual Grant  
You reasonably relied on written advice  
By selecting this item, you’re also  
attesting that you filed the required annual  
returns, your failure to file wasn’t  
intentional, and you have put in place  
procedures to file required returns or  
notices in the future.  
from us.  
You reasonably relied on the advice of  
a qualified tax professional who failed to  
file or advise you to file Form 1023.  
Procedures  
Complete this schedule if you provide  
scholarships, fellowships, grants, loans, or  
-22-  
               
other distributions to individuals for  
If you make educational loans,  
educational purposes. When answering  
describe the terms of the loan (for  
the questions on this schedule, you should example, the factors you consider in  
demonstrate how these distributions  
further your exempt purposes.  
selecting or approving loan recipients,  
interest rate, duration, forgiveness  
provision, etc.). Also, describe whether  
any financial institutions or other lenders  
are involved in your program.  
Explain how you will publicize your  
program and whether you publicize to the  
general public or to another group of  
possible recipients. Include specific  
Line 1a. Check the box for section  
“4945(g)(1)” if your award qualifies as a  
scholarship or fellowship grant that’s  
awarded on an objective and  
If you’re a private foundation,  
you’re subject to the rules under  
!
CAUTION  
section 4945 and may incur an  
nondiscriminatory basis and is used for  
study at a school (see Schedule B for  
what is considered a school).  
excise tax if you make grants for the  
purpose described above without seeking  
advance approval of your grant-making  
procedures (see Schedule H–Section II).  
Check the box for “4945(g)(3)” if the  
purpose of your award is to achieve a  
specific objective, produce a report or  
other similar product, or improve or  
enhance a literary, artistic, musical,  
scientific, teaching, or other similar  
capacity, skill, or talent of the recipient.  
Include your educational loan program  
under this section.  
information about the geographic area in  
which your program will be publicized and  
the means you will use, such as through  
newspaper advertisements, school district  
announcements, or community groups.  
Generally, distributions made to  
individuals may advance educational  
purposes if selection is made:  
In a non-discriminatory fashion in terms  
of racial preference;  
Line 2. Organizations that make grants to  
individuals must maintain adequate  
records and case histories showing the  
name and address of each recipient,  
pursuant Rev. Rul. 56-304, 1956-2 C.B.  
306 but don’t provide this information as  
part of your application.  
Based on need and/or merit; and  
To a charitable class in terms of being  
You may check more than one box.  
available to an open-ended group, rather  
than to pre-selected individuals.  
If your award qualifies as a prize  
A scholarship or fellowship is tax free to  
the recipient only if he or she is a  
candidate for a degree at an eligible  
educational institution and uses the  
scholarship or fellowship to pay qualified  
education expenses.  
Qualified education expenses include  
tuition and fees; and course-related  
expenses such as books, supplies, and  
equipment. Room and board, travel,  
research, clerical help, and non-required  
equipment aren’t qualified education  
expenses. See Pub. 970, Tax Benefits for  
Education, for additional information.  
or award that is subject to the  
provisions of section 74(b) and  
TIP  
your recipient is selected from the general  
public, you don’t have to request advance  
approval of your grant-making procedures  
since a prize or award isn’t subject to the  
advance approval procedure requirements  
because it isn’t a grant for travel, study, or  
other similar purposes. See Rev. Ruls.  
77-380, 1977-2 C.B. 419; 76-460, 1976-2  
C.B. 371; and 75-393, 1975-2 C.B. 451.  
Section II  
If you requested public charity  
classification in Part VII, line 1, don’t  
complete Schedule H – Section II.  
Line 1. Answer “Yes,” if you’re a private  
foundation and you’re requesting  
advance approval of your grant-making  
procedures under section 4945(g).  
Answer “No,” if you’re a private foundation  
but don’t wish to request advance  
approval of your grant-making procedures  
under section 4945(g). If you answer “No”  
the amounts you distribute as educational  
grants provided to individuals may be  
considered taxable expenditures under  
section 4945.  
Line 4. Answer “Yes,” if you award  
scholarships on a preferential basis  
because you require, as an initial  
qualification, that the individual be an  
employee or be related to an employee of  
a particular employer.  
Selection of individuals using a lottery  
system generally hasn’t been approved by  
the IRS.  
Line 7. For purposes of this schedule, a  
program for children of employees of a  
particular employer includes children and  
family members of employees.  
Specific Line Items  
Section I  
For more information about advance  
approval of grant-making procedures of a  
private foundation, go to IRS.gov/  
Line 1. If you conduct more than one  
grant program, describe each program  
separately.  
Instructions for Form 1023  
-23-  
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United  
States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to  
figure and collect the right amount of tax.  
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form  
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents  
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,  
as required by section 6103. However, certain returns and return information of tax exempt organizations and trusts are subject to  
public disclosure and inspection, as provided by section 6104.  
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for tax  
exempt organizations filing this form is approved under OMB control number 1545-0047 and is included in the estimates shown in the  
instructions for their information return.  
Comments and suggestions. If you have comments concerning the accuracy of this time estimate or suggestions for making this  
form simpler, we would be happy to hear from you. You can send us comments from IRS.gov/FormComments. Or you can write to:  
Internal Revenue Service  
Tax Forms and Publications Division  
1111 Constitution Ave. NW, IR-6526  
Washington, DC 20224  
Instructions for Form 1023  
-24-  
Appendix A: Sample Conflict of Interest Policy  
Note. This Sample Conflict of  
Interest Policy is intended to  
provide an example of a  
indirectly, through business,  
investment, or family:  
conflict of interest is discussed  
and voted upon. The  
4. Violations of the Conflict  
of Interest Policy  
remaining board or committee  
members shall decide if a  
conflict of interest exists.  
a. An ownership or  
a. If the governing board or  
committee has reasonable  
cause to believe a member  
has failed to disclose  
conflict of interest policy for  
organizations. The sample  
conflict of interest policy does  
not prescribe any specific  
requirements. Therefore,  
organizations should use a  
conflict of interest policy that  
best fits their organization.  
investment interest in any  
entity with which the  
Organization has a  
3. Procedures for Address-  
transaction or  
ing the Conflict of Interest  
actual or possible conflicts  
of interest, it shall inform  
the member of the basis  
for such belief and afford  
the member an opportunity  
to explain the alleged  
failure to disclose.  
arrangement,  
a. An interested person  
may make a presentation  
at the governing board or  
committee meeting, but  
after the presentation,  
he/she shall leave the  
meeting during the  
b. A compensation  
arrangement with the  
Organization or with any  
entity or individual with  
which the Organization  
has a transaction or  
arrangement, or  
Note. Items marked Hospital  
insert — for hospitals that  
complete Schedule C are  
intended to be adopted by  
hospitals.  
b. If, after hearing the  
member's response and  
after making further  
discussion of, and the vote  
on, the transaction or  
arrangement involving the  
possible conflict of  
c. A potential ownership or  
investment interest in, or  
compensation  
investigation as warranted  
by the circumstances, the  
governing board or  
Article I  
Purpose  
arrangement with, any  
entity or individual with  
which the Organization is  
negotiating a transaction  
or arrangement.  
interest.  
committee determines the  
member has failed to  
disclose an actual or  
b. The chairperson of the  
governing board or  
The purpose of the conflict of  
interest policy is to protect this  
tax-exempt organization's  
(Organization) interest when it  
is contemplating entering into  
a transaction or arrangement  
that might benefit the private  
interest of an officer or director  
of the Organization or might  
result in a possible excess  
benefit transaction. This policy  
is intended to supplement but  
not replace any applicable  
state and federal laws  
committee shall, if  
possible conflict of  
appropriate, appoint a  
disinterested person or  
committee to investigate  
alternatives to the  
d. Compensation includes  
direct and indirect  
interest, it shall take  
appropriate disciplinary  
and corrective action.  
remuneration as well as  
gifts or favors that aren’t  
insubstantial. A financial  
interest isn’t necessarily a  
conflict of interest. Under  
Article III, Section 2, a  
person who has a financial  
interest may have a  
proposed transaction or  
arrangement.  
Article IV  
Records of Proceedings  
The minutes of the governing  
board and all committees with  
board delegated powers shall  
contain:  
c. After exercising due  
diligence, the governing  
board or committee shall  
determine whether the  
Organization can obtain,  
with reasonable efforts, a  
more advantageous  
conflict of interest only if  
the appropriate governing  
board or committee  
governing conflict of interest  
applicable to nonprofit and  
charitable organizations.  
a. The names of the persons  
who disclosed or otherwise  
were found to have a financial  
interest in connection with an  
actual or possible conflict of  
interest, the nature of the  
financial interest, any action  
taken to determine whether a  
conflict of interest was present,  
and the governing board's or  
committee's decision as to  
whether a conflict of interest in  
fact existed.  
transaction or arrangement  
from a person or entity that  
would not give rise to a  
conflict of interest.  
decides that a conflict of  
interest exists.  
Article II  
Definitions  
Article III  
Procedures  
d. If a more advantageous  
transaction or arrangement  
isn’t reasonably possible  
under circumstances not  
producing a conflict of  
interest, the governing  
board or committee shall  
determine by a majority  
vote of the disinterested  
directors whether the  
transaction or arrangement  
is in the Organization best  
interest, for its own benefit,  
and whether it is fair and  
reasonable. In conformity  
with the above  
1. Interested Person Any  
director, principal officer, or  
member of a committee with  
governing board delegated  
powers, who has a direct or  
indirect financial interest, as  
defined below, is an interested  
person.  
1. Duty to Disclose In  
connection with any actual or  
possible conflict of interest, an  
interested person must  
disclose the existence of the  
financial interest and be given  
the opportunity to disclose all  
material facts to the directors  
and members of committees  
with governing board  
b. The names of the persons  
who were present for  
discussions and votes relating  
to the transaction or  
[Hospital insert – for  
hospitals that complete  
Schedule C. If a person is an  
interested person with respect  
to any entity in the health care  
system of which the  
arrangement, the content of  
the discussion, including any  
alternatives to the proposed  
transaction or arrangement,  
and a record of any votes  
taken in connection with the  
proceedings.  
delegated powers considering  
the proposed transaction or  
arrangement.  
2. Determining Whether a  
Conflict of Interest Exists  
After disclosure of the financial  
interest and all material facts,  
and after any discussion with  
the interested person, he/she  
shall leave the governing  
determination, it shall  
make its decision as to  
whether to enter into the  
transaction or  
organization is a part, he or  
she is an interested person  
with respect to all entities in the  
health care system.]  
arrangement.  
2. Financial Interest A  
person has a financial interest  
if the person has, directly or  
board or committee meeting  
while the determination of a  
-25-  
   
prohibited from providing  
information to any committee  
regarding compensation.  
b. Has read and  
b. Whether partnerships,  
joint ventures, and  
Article V  
Compensation  
understands the policy,  
c. Has agreed to comply  
with the policy, and  
arrangements with  
management  
[Hospital insert-for  
a. A voting member of the  
governing board who receives  
compensation, directly or  
indirectly, from the  
d. Understands the  
organizations conform to  
the Organization's written  
policies, are properly  
recorded, reflect  
hospitals that complete  
Schedule C Physicians who  
receive compensation from the  
Organization, whether directly  
or indirectly or as employees  
or independent contractors,  
are precluded from  
Organization is charitable  
and in order to maintain its  
federal tax exemption it  
must engage primarily in  
activities that accomplish  
one or more of its  
Organization for services is  
precluded from voting on  
matters pertaining to that  
member's compensation.  
reasonable investment or  
payments for goods and  
services, further charitable  
purposes and don't result  
in inurement,  
tax-exempt purposes.  
membership on any committee  
whose jurisdiction includes  
compensation matters. No  
physician, either individually or  
collectively, is prohibited from  
providing information to any  
committee regarding physician  
compensation.]  
b. A voting member of any  
committee whose jurisdiction  
includes compensation  
matters and who receives  
compensation, directly or  
indirectly, from the  
Periodic Reviews  
impermissible private  
benefit, or in an excess  
benefit transaction.  
To ensure the Organization  
operates in a manner  
consistent with charitable  
purposes, and doesn't engage  
in activities that could  
Article VIII  
Use of Outside Experts  
Organization for services is  
precluded from voting on  
matters pertaining to that  
member's compensation.  
jeopardize its tax-exempt  
status, periodic reviews shall  
be conducted. The periodic  
reviews shall, at a minimum,  
include the following subjects:  
When conducting the periodic  
reviews, as provided for in  
Article VII, the Organization  
may, but need not, use outside  
advisors. If outside experts are  
used, their use shall not relieve  
the governing board of its  
responsibility for ensuring  
periodic reviews are  
Article VI  
Annual Statements  
c. No voting member of the  
governing board or any  
committee whose jurisdiction  
includes compensation  
matters and who receives  
compensation, directly or  
indirectly, from the  
Each director, principal officer,  
and member of a committee  
with governing board  
a. Whether compensation  
arrangements and benefits  
are reasonable, based on  
competent survey  
delegated powers shall  
annually sign a statement  
which affirms such person:  
information, and the result  
of arm's length bargaining.  
conducted.  
a. Has received a copy of  
the conflict of interest  
policy,  
Organization, either  
individually or collectively, is  
-26-  
Appendix B: States With Statutory Provisions Satisfying the Requirements of  
Internal Revenue Code Section 508(e)  
The following states have adopted legislation satisfying the requirements of Section 508(e) relating to  
private foundation governing instruments. Information derived from Revenue Ruling 75-38, 1975-1  
C.B. 161.  
ALABAMA — except where otherwise provided by a decree of a court of competent jurisdiction or by a provision in the  
private foundation's governing instrument, which in either case has been entered or made after October 1, 1971, and  
expressly limits the applicability of state law.  
ALASKA — except for such private foundations that expressly provide in their governing instruments that the applicable  
sections of Alaska law don't apply to them.  
ARKANSAS — except for such private foundations which expressly provide in their governing instruments that the  
applicable sections of Arkansas law don't apply to them and except in the case of trusts where otherwise provided by decree  
of a court of competent jurisdiction.  
CALIFORNIA — except where otherwise provided by a court of competent jurisdiction.  
COLORADO — with respect to trusts that are private foundations except where otherwise provided by a court of competent  
jurisdiction.  
CONNECTICUT — except where otherwise provided by a court of competent jurisdiction.  
DELAWARE — except for such private foundations, which expressly provide in their governing instruments that the  
applicable sections of Delaware law don't apply to them.  
DISTRICT OF COLUMBIA — except for such corporations, which expressly provide in their governing instruments that the  
applicable sections of District of Columbia law don't apply to them and except in the case of trusts where otherwise provided  
by a court of competent jurisdiction. (For purposes of this statute, corporations include corporations organized under any Act  
of Congress applicable to the District of Columbia as well as corporations organized under the laws of the District of  
Columbia.)  
FLORIDA — except for such trusts that file a proper election not to be subject to the applicable provisions of Florida law and  
for such corporations as to which a court of competent jurisdiction has otherwise determined.  
GEORGIA — except for such private foundations that file a proper election not to be subject to such law.  
HAWAII — no exceptions.  
IDAHO — except for such private foundations that expressly provide in their governing instruments that the applicable  
sections of Idaho law don't apply to them.  
ILLINOIS — except for such corporations that have express provisions to the contrary in their articles of incorporation and  
except for trusts where it is otherwise provided by a court of competent jurisdiction.  
INDIANA — except where otherwise determined by a court of competent jurisdiction with respect to private foundations  
organized before January 1, 1970.  
IOWA — except for such private foundations which expressly provide in their governing instruments that the applicable  
sections of Iowa law don't apply to them.  
KANSAS — except where otherwise provided by a court of competent jurisdiction.  
KENTUCKY — except, with respect to corporations in existence on July 1, 1972, to the extent that such a corporation  
provides to the contrary by amendment to its articles of incorporation adopted after July 1, 1972, and, with respect to trusts in  
existence on July 1, 1972, where action is properly commenced on or before December 31, 1972, in a court of competent  
jurisdiction to excuse the trust from compliance with the requirements of section 508(e) of the Code.  
LOUISIANA — except for such private foundations that expressly provide in their governing instruments that the applicable  
sections of Louisiana law don't apply to them.  
MAINE — except where otherwise provided by a court of competent jurisdiction.  
MARYLAND — except where otherwise provided by a court of competent jurisdiction.  
MASSACHUSETTS — except where otherwise provided by a court of competent jurisdiction.  
MICHIGAN — with respect to trusts that are private foundations except for such private foundations which file a notice of  
inconsistency under Michigan law.  
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MINNESOTA — except for private foundations that have been held by a court of competent jurisdiction not to be affected by  
such state statute.  
MISSISSIPPI — except where otherwise provided by a court of competent jurisdiction.  
MISSOURI — except for private foundations that have been held by a court of competent jurisdiction not to be affected by  
such state statute.  
MONTANA — except in the case of trusts where otherwise provided by court decree entered after March 28, 1974, and  
except in the case of a corporation that has an express provision to the contrary in its articles of incorporation.  
NEBRASKA — except for such trusts that effectively elect to be excluded from the applicable sections of Nebraska law, for  
such corporations which have governing instruments expressly providing to the contrary, and except as a court of competent  
jurisdiction has otherwise determined in any given case.  
NEVADA — no exceptions.  
NEW HAMPSHIRE — except where it is otherwise provided by a court of competent jurisdiction.  
NEW JERSEY — except for such private foundations that expressly provide in their governing instruments that the  
applicable sections of New Jersey law don't apply to them.  
NEW YORK — except where such law conflicts with any mandatory direction of an instrument by which assets were  
transferred prior to June 1, 1971, and such conflicting direction hasn’t been removed legally.  
NORTH CAROLINA — except for such private foundations which expressly provide in their governing instruments that the  
applicable sections of North Carolina law don't apply to them and except for trusts that have their governing instruments  
reformed by a decree of the Superior Court of North Carolina.  
NORTH DAKOTA — with respect to trusts that are private foundations except where otherwise provided by a court of  
competent jurisdiction.  
OHIO — except in the case of trusts where it is provided otherwise by a court of competent jurisdiction and except in the  
case of corporations in existence on September 17, 1971, which expressly adopt contrary provisions in their governing  
instruments after September 17, 1971.  
OKLAHOMA — except for such private foundations that file a proper election not to be subject to such law.  
OREGON — no exceptions.  
PENNSYLVANIA — except where otherwise provided by a court of competent jurisdiction.  
RHODE ISLAND — except where otherwise provided by a court of competent jurisdiction.  
SOUTH CAROLINA — except for private foundations that expressly provide in their governing instruments that the  
applicable sections of South Carolina law don't apply to them.  
SOUTH DAKOTA — except where otherwise provided by a court of competent jurisdiction.  
TENNESSEE — except where otherwise provided by a court of competent jurisdiction.  
TEXAS — except for such private foundations that a proper election not to be subject to such law.  
UTAH — with respect to trusts that are private foundations except where otherwise provided by a court of competent  
jurisdiction.  
VERMONT — except where otherwise provided by a court of competent jurisdiction.  
VIRGINIA — except for private foundations whose governing instruments contain express provisions to the contrary or that  
have filed a proper election not to be subject to such law.  
WASHINGTON — except for such private foundations that expressly provide in their governing instruments that the  
applicable sections of Washington law don't apply to them.  
WEST VIRGINIA — with respect to trusts that are private foundations except for such trusts which provide in their governing  
instruments that the applicable sections of West Virginia law don't apply to them.  
WISCONSIN — except as may otherwise be provided by decree of a court of competent jurisdiction.  
WYOMING — except where otherwise provided by a court of competent jurisdiction.  
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Appendix C: Glossary of Terms  
Adjusted net income (for Schedule D) Adjusted net income includes: gross income from any unrelated trade or  
business; gross income from functionally related businesses; interest  
payments received on loans; amounts received or accrued as repayments  
of amounts taken as qualifying distributions for any tax year; amounts  
received or accrued from the sale or other disposition of property to the  
extent acquisition of the property was treated as a qualifying distribution  
for any tax year; any amounts set aside for a specific project to the extent  
the full set-aside was not necessary for the project; interest on  
government obligations normally excluded under section 103; net  
short-term capital gains on sale or other disposition of property; and  
income received from an estate if the estate is considered terminated for  
income tax purposes because of a prolonged administration period.  
It doesn't include: gifts, grants, and contributions received; long-term  
capital gains or losses; net section 1231 gains; capital gain dividends; the  
excess of fair market value over adjusted basis of property distributed to  
the U.S. or a possession or political subdivision, a state or its political  
subdivision, a charitable trust, or corporation for public purposes; or  
income received from an estate during the administration period.  
In computing adjusted net income, deduct the following: ordinary and  
necessary expenses paid or incurred for the production or collection of  
gross income, or for the management, conservation, or collection of gross  
income (includes operating expenses such as compensation of officers,  
employee wages and salaries, interest, rent, and taxes); straight-line  
depreciation and depletion (not percentage depletion); and expenses and  
interest paid or incurred to carry tax-exempt obligations. Don't deduct net  
short-term capital losses for the year in which they occur (these losses  
cannot be carried back or carried over to earlier or later tax years); the  
excess of expenses for property used for exempt purposes over the  
income received from the property; charitable contributions made by you;  
net operating losses; and special deductions for corporations.  
Arm's length  
A transaction between parties having adverse (or opposing) interests  
where none of the participants are in a position to exercise substantial  
influence over the transaction because of business or family  
relationship(s) with more than one of the parties.  
Authorized representative  
An individual eligible to practice before the IRS who holds a power of  
attorney (Form 2848 or other similar documents) that authorizes him or  
her to represent the organizations in tax matters, including the application  
for tax-exempt status.  
Bingo  
A game of chance played with cards that are generally printed with 5 rows  
of 5 squares each, on which participants place markers to form a  
pre-selected pattern to win the game. Bingo is gambling.  
Business relationship  
Employment and contractual relationships, and common ownership of a  
business where any officers, directors, or trustees, individually or together,  
possess more than a 35% ownership interest in common. Ownership  
means voting power in a corporation, profits interest in a partnership, or  
beneficial interest in a trust.  
Bylaws  
The internal rules and regulations of an organization.  
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Certification of filing  
Evidence that, on a specific date, articles of incorporation (for a  
corporation) or articles of organization (for a limited liability company)  
were accepted for filing by appropriate state authority resulting in the  
creation of a state-law entity.  
Community  
The local or regional geographic area to be served by an organization.  
Compensation  
All forms of income from working, including salary or wages; deferred  
compensation; retirement benefits, whether in the form of a qualified or  
non-qualified employee plan (for example, pensions or annuities); fringe  
benefits (for example, personal vehicle, meals, lodging, personal and  
family educational benefits, low interest-loans, payment of personal travel,  
entertainment, or other expenses, athletic or country club membership,  
and personal use of your property); and bonuses.  
Conflict of interest policy  
A set of procedures to identify potential conflicts of interest and to reduce  
the likelihood that persons in a position of authority over an organization  
may use that authority to receive an inappropriate benefit. A conflict of  
interest may arise when a person in a position of authority over an  
organization, such as a director, officer, or manager, may benefit  
personally from a decision he or she could make.  
Controlled by disqualified persons  
See the definition of a disqualified person below. A section 509(a)(3)  
supporting organization, may not be controlled directly or indirectly by  
disqualified persons (other than the organization’s officers, directors or  
trustees). An organization is controlled by disqualified persons if  
disqualified persons can exercise 50% or more of the total voting power  
held by the organization’s governing body. For this purpose, controlled  
includes the authority to affect significant decisions, such as power over  
investment decisions, or charitable disbursement decisions, as well as the  
power to veto such decision. Control may be direct or indirect.  
Corporation  
Develop  
An entity organized under a federal or state corporation law (including the  
statutes of a federally recognized Indian tribal or Alaskan native  
government).  
The planning, financing, construction, or provision of similar services  
involved in the acquisition of real property, such as land or a building.  
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Disqualified person  
Any individual or organization that is any of the following relationships.  
a. A substantial contributor to you (see Substantial contributor).  
b. An officer, director, trustee, or any other individual who has similar  
powers or responsibilities.  
c. An individual who owns more than 20% of the total combined voting  
power of a corporation that is a substantial contributor to you.  
d. An individual who owns more than 20% of the profits interest of a  
partnership that is a substantial contributor to you.  
e. An individual who owns more than 20% of the beneficial interest of a  
trust or estate that is a substantial contributor to you.  
f. A member of the family of any individual described in a, b, c, d, or e  
above.  
g. A corporation in which any individuals described in a, b, c, d, e, or f  
above hold more than 35% of the total combined voting power.  
h. A trust or estate in which any individuals described in a, b, c, d, e, or  
f above hold more than 35% of the beneficial interests.  
i. A partnership in which any individuals described a, b, c, d, e, or f  
above hold more than 35% of the profits interest.  
Earmark  
Donations or other contributions given to an organization on the condition  
or understanding that they will be used to assist particular individuals or  
specific identified groups.  
Expenses  
Financial burdens or outlays, costs (of doing business), and business  
outlays chargeable against revenues. For purposes of this form, expenses  
mean direct and indirect expenses.  
Fair market value  
The price at which property, or the right to use property, would change  
hands between a willing buyer and a willing seller, neither being under any  
compulsion to buy, sell, or transfer property or the right to use property,  
and both having reasonable knowledge of relevant facts.  
Family  
Includes an individual's spouse, ancestors, children, grandchildren,  
great-grandchildren, siblings (whether by whole or half-blood), and the  
spouses of children, grandchildren, great-grandchildren, and siblings.  
Foreign country  
For-profit  
A country other than the United States, its territories and possessions, and  
the District of Columbia.