IRS 10 Tips to Shorten the Tax Exempt Application Process

  Here are the  Top Ten Tips to shorten the tax-exempt application process that has just been released by the IRS.

 Following these simple tips can save time and effort 

10.   Provide the required information on the principal officers
and board of directors. List the following information for the principal
officers and board of directors:
         a) Names; b) Mailing  addresses; c) Titles and Positions; d) Annual compensation

9.   Ensure a director, trustee, principal officer or other  authorized individual signs the         Form 1023.
Generally, a principal  officer is the president, vice president, secretary or treasurer. The person
signing the application must indicate his or her title or other authority to
sign. A taxpayer's representative may not sign the application. An original
signature is required. Neither a stamped signature nor a faxed signature is
permitted.

8.   Don't forget to submit a copy of adopted by-laws, code of  regulations or any other document that sets out the organization's rules of  operation, but only if adopted.

7.   Include all of the necessary financial data. See the instructions to Form 1023 to determine how much
information you need to provide, based on how long your organization has existed.

6.   Include the month the organization's annual  accounting period ends. The accounting period ending date on the application  should match the date stated in your by-laws, on financial statements, and on
any prior returns filed.

5.   Attach all required schedules. Some lines require supporting schedules. Check all line items on financial  statements.

4.   Complete all required pages. The  information contained on each page and schedule of Form 1023 and Form 1024 is  necessary for the IRS to make a determination about your tax-exempt status. Form 1023 has various schedules and pages that must be filled out for churches,  schools, hospitals, scholarships, supporting organizations and certain  other organizations.

3.   Provide enough information about the organization's activities  to show us how it will achieve the exempt purpose. Please don't restate the purpose. Explain the specific activities that will achieve that purpose.  Consider a "who, what, when, where, why and how" approach. Explain past,
present, and planned activities. If you haven't started activity yet, develop plans that provide a clear understanding of how your organization will operate.  It is not necessary to describe activities that are speculative at this  time.

2.   Attach a complete copy of the organizing document and all  amendments. 
If the applicant is a corporation, include a complete copy  of the articles of incorporation that shows it has been filed with and approved  by the state. If the applicant is not incorporated, include a similar organizing  document such as a constitution, articles of association, or by-laws. At a  minimum, it should state the legal name, the purposes and the date of adoption.  At least two members of the organization should sign the document. A trust  document must be signed by the trustees and show the date of formation. For  section 501(c)(3) applicants, the organizing document must comply with the organizational test for exemption. 

1.   The Number 1 tip to reduce delays in processing
exempt organization applications is . . .
INCLUDE THE CORRECT USER FEE!
Ensure the application includes a cashiers check or money order made payable to  the United States Treasury for the appropriate user fee.  Form 1023 $600 

Following these ten tips can help shorten the time it takes to process an application for tax-exempt status. A correctly completed application, sent with all required documents and schedules has a good chance of being accepted with no further contact. If contact is necessary, the IRS agent can address the technical issues that need resolution without taking up time to get a completed application.    
Page Last Reviewed or Updated: January 2, 2020.