A standard application package for a nonprofit corporation seeking 501(c)(3) exemption status typically includes:
» A Tax ID/EIN
» New IRS Form 1023
» IRS Form 8718
» Articles of Incorporation filed with the South Carolina Secretary of State
» Bylaws
» Description of Activities
» Financial Records
» Application/User Fee
In addition to the required documents, the IRS may require additional information necessary to clarify the nature of the corporation, including a suggested new Conflicts of Interest Policy.
The primary objective of the application package is to show that the organization is organized and operated for one or more of the exempt purposes enumerated in IRC § 501(c)(3). The application must also show that all of the following are true:
» No part of the organization’s net earnings will inure to the benefit of private shareholders or individuals; and
» The organization will not, as a substantial part of its activities, attempt to influence legislation or participate to any extent in the political campaign for or against any candidate for public office.
As previously indicated, these provisions should be included in the Optional Provisions (Line 8) in the Articles filed with the Secretary of State.
New IRS Form 1023
Tax-Exempt Status IRS Form 1023 is the official application form prescribed by the IRS for tax-exempt status under IRC 501(c)(3). The form is entitled "Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code" and is a required document in the application package.
The IRS estimated that the average time to keep and prepare records so as to be able to prepare the application is 80 hours. It will require at least 10 hours to prepare the Forms; plus more time for each schedule. Further, it will take an additional time to assemble the material for mailing. The time to keep and prepare the 1023 application and associated forms may likely take longer than the above estimates.