Who Qualifies to File the Form 1023-EZ

The Instructions for Form 1023-EZ provide an eligibility worksheet starting on page 11. Among the 26 qualifications necessary to use Form 1023-EZ:

  • Projected annual gross receipts must not exceed $50,000 in any of the next 3 years
  • Actual annual gross receipts must not have exceeded $50,000 in any of the past 3 years
  • Total assets must not exceed $250,000
  • The organization must not be a foreign organization, LLC, successor to a for-profit entity, church, school, or hospital
  • The organization must not request classification as a supporting organization or a private operating foundation
  • The organization must not maintain or plan to maintain one or more donor-advised funds

How are Forms 1023 and 1023-EZ different?

Form 1023

Form 1023 is 12 pages long, not including 8 possible schedules, some of which may or may not need to be completed depending on the type of organization and its circumstances. The schedules are for (A) churches; (B) schools, colleges, and universities; (C) hospitals and medical research organizations; (D) supporting organizations; (E) organizations not filing Form 1023 within 27 months of formation; (F) homes for the elderly or handicapped and low-income housing; (G) successors to other organizations; and (H) organizations providing scholarships, fellowships, educational loans, or educational grants to individuals and private foundations requesting advance approval of individual grant procedures.

There are many questions on Form 1023 that require fairly detailed narrative answers regarding:

  • Past, present, and planned activities
  • Compensation of directors, officers, trustees, and certain highly paid employees and contractors (“Close Personnel”)
  • Compensation of Close Personnel from related organizations
  • Sales and/or contracts between the organization and any Close Personnel (including any organizations they have certain affiliations with)
  • Family and business relationships among directors, officers, and trustees
  • Goods, services, and/or funds (grants) provided to individuals or organizations
  • Fundraising programs

In addition, the Form 1023 requires:

  • Articles of incorporation
  • Bylaws
  • Conflict of interest policy or explanation of how the organization manages conflicts of interest
  • Financials (actual and/or projected) for 3 or 4 years

If you submitted an application on Form 1023, … you can expect to be contacted within 180 days from the date you submitted the application.  After 180 days, if you haven’t been contacted, you can call the toll-free Customer Account Services number, Monday through Friday, 8 a.m. – 5 p.m. (local time), at 877-829-5500 to check on the status. – IRS