An organization that seeks to be a tax-exempt charity under Section 501(c)(3) of the Internal Revenue Code must apply for tax exempt status by preparing and filing with the IRS one of the following two IRS forms:

If your organization is considering filing for tax-exempt status under Section 501(c)(3) it must be able to answer no to each of the following questions.  If it answers any question with yes, the organization must file for tax exempt status using IRS Form 1023.

Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses. You should consider this year and the next two years.
Total assets includes cash, accounts receivable, inventories, bonds and notes receivable, corporate stocks, loans receivable, other investments, depreciable and depletable assets, land, buildings, equipment, and any other assets.
You are formed under the laws of a foreign country if you are not formed under the laws of (1) the United States, its states, territories, or possessions; (2) federally recognized Indian tribal or Alaskan native governments; or (3) the District of Columbia.
Section 501(p)(1) suspends the exemption from tax under section 501(a) of any organization described in section 501(p)(2). An organization is described in section 501(p) (2) if the organization is designated or otherwise individually identified (1) under certain provisions of the Immigration and Nationality Act as a terrorist organization or foreign terrorist organization; (2) in or pursuant to an Executive Order which is related to terrorism and issued under the authority of the International Emergency Economic Powers Act or section 5 of the United Nations Participation Act of 1945 for the purpose of imposing on such organization an economic or other sanction; or (3) in or pursuant to an Executive Order issued under the authority of any federal law, if the organization is designated or otherwise individually identified in or pursuant to the Executive Order as supporting or engaging in terrorist activity (as defined in the Immigration and Nationality Act) or supporting terrorism (as defined in the Foreign Relations Authorization Act) and the Executive Order refers to section 501(p)(2).

Under section 501(p)(3) of the Code, suspension of an organization’s tax exemption begins on the date of the first publication of a designation or identification with respect to the organization, as described above, or the date on which section 501(p) was enacted, whichever is later. This suspension continues until all designations and identifications of the organization are rescinded under the law or Executive Order under which such designation or identification was made.

Answer “Yes” if you are organized as an LLC under the laws of the state in which you were formed.
You are a successor if you have: (1) Substantially taken over all of the assets or activities of a for-profit entity; (2) Been converted or merged from a for-profit entity; or (3) Installed the same officers, directors, or trustees as a for-profit entity that no longer exists.
Do not check “Yes” if your previous revocation, or your predecessor’s revocation, was an automatic revocation (pursuant to section 6033(j)) for failing to satisfy Form 990-series filing requirements for three consecutive years.
There is no single definition of the word “church” for tax purposes; however, the characteristics generally attributed to churches include:

  • A distinct legal existence,
  • A recognized creed and form of worship,
  • A definite and distinct ecclesiastical government,
  • A formal code of doctrine and discipline,
  • A distinct religious history,
  • A membership not associated with any other church or denomination,
  • Ordained ministers ministering to the congregation,
  • Ordained ministers selected after completing prescribed courses of study,
  • A literature of its own,
  • Established places of worship,
  • Regular congregations,
  • Regular religious services,
  • Sunday schools for the religious instruction of the young, and
  • Schools for the preparation of ministers.

Although it is not necessary that each of the above characteristics be present, a congregation or other religious membership group that meets regularly for religious worship is generally required. A church includes mosques, temples, synagogues, and other forms of religious organizations. For more information, see Publication 1828.

An organization is a school if it:

  1. Presents formal instruction as its primary function,
  2. Has a regularly scheduled curriculum,
  3. Has a regular faculty of qualified teachers,
  4. Has a regularly enrolled student body, and
  5. Has a place where educational activities are regularly carried on.

The term “school” includes primary, secondary, preparatory, high schools, colleges, and universities. It does not include organizations engaged in both educational and non-educational activities, unless the latter are merely incidental to the educational activities.

An organization is a hospital described in section 170(b)(1)(A)(iii) 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 hospital if its principal function is providing treatment services as described above.

A hospital does not include convalescent homes, homes for children or the aged, or institutions whose principal purpose or function is to train handicapped individuals to pursue a vocation.

An organization is a medical research organization described in section 170(b)(1)(A)(iii) 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.

An organization is a hospital organization described in section 501(r)(2)(A)(i) if the organization operates a facility which is required by a state to be licensed, registered, or similarly recognized as a hospital

A cooperative hospital service organization described in section 501(e) is organized and operated on a cooperative basis to provide its section 501(c)(3) hospital members one or more of the following activities.

  • Data processing.
  • Purchasing (including purchasing insurance on a group basis).
  • Warehousing.
  • Billing and collection (including purchasing patron accounts receivable on a recourse
  • basis).
  • Food.
  • Clinical.
  • Industrial engineering.
  • Laboratory.
  • Printing.
  • Communications.
  • Record center.
  • Personnel (including selecting, testing, training, and educating personnel) services.

A cooperative hospital service organization must also meet certain other requirements specified in section 501(e).

An organization is a cooperative service organization of operating educational organizations if it is organized and operated solely to provide investment services to its members. Those members must be organizations described in section 170(b)(1)(A)(ii) or (iv) that are tax exempt under section 501(a) or whose income is excluded from taxation under section 115.
A qualified charitable risk pool is treated as organized and operated exclusively for charitable purposes. Check the appropriate box to indicate whether you are a charitable risk pool. A qualified charitable risk pool is an organization that:

  1. Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management,
  2. Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a),
  3. Is organized under state law authorizing this type of risk pooling,
  4. Is exempt from state income tax (or will be after qualifying as a section 501(c)(3)organization),
  5. Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations,
  6. Is controlled by a board of directors elected by its members, and
  7. Is organized under documents requiring that: (a) Each member be a section 501(c)(3) organization exempt from tax under section 501(a), (b) Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and (c) Each insurance policy issued by the pool provide that it will not cover eventsoccurring after a final determination described in (b).
A supporting organization (as defined in section 509(a)(3)) differs from the other types of public charities described in section 509. Instead of describing an organization that conducts a particular kind of activity or that receives financial support from the general public, section 509(a)(3) describes organizations that have established certain relationships in support of public charities described in section 509(a)(1) or 509(a)(2).  Thus, an organization can qualify as a supporting organization (and not be classified as a private foundation) even though it may be funded by a single donor, family, or corporation.  This kind of funding ordinarily would indicate private foundation status, but a section 509(a) (3) organization has limited purposes and activities, and gives up a significant degree of independence. A supporting organization is an organization that:

  1. Is organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more specified organizations as described in section 509(a)(1) or 509(a)(2). These section 509(a)(1) and 509(a)(2) organizations are commonly called publicly supported organizations.
  2. Has one of three types of relationships with one or more organizations described in section 509(a)(1) or 509(a)(2). It must be: (a) Operated, supervised, or controlled by one or more section 509(a)(1) or 509(a)(2)organizations (Type I supporting organization); (b) Supervised or controlled in connection with one or more section 509(a)(1) or 509(a)(2) organizations (Type II supporting organization); or (c) Operated in connection with one or more section 509(a)(1) or 509(a)(2)organizations (Type III supporting organization).
  3. Is not controlled directly or indirectly by disqualified persons (as defined in section 4946) other than foundation managers and other than one or more organizations described in section 509(a)(1) or 509(a)(2).

See Publication 557 for more information.

These activities involve the education of the consumer on budgeting, personal finance, financial literacy, mortgage foreclosure assistance, or other consumer credit areas. It 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.
ACOs are entities formed by groups of physicians, hospitals, and other health care service providers and suppliers to manage and coordinate the care provided to patients.  For a discussion of tax law issues relating to ACOs, see Notice 2011-20 and FS-2011-11.
In general, a donor advised fund is a fund or account that is owned and controlled by the organization but that is separately identified by reference to contributions of a donor or donors and with respect to which a donor (or any person appointed or designated by the donor) has or expects to have advisory privileges concerning the distribution or investment of amounts held in the fund or account by reason of the donor’s status as a donor. For additional information, see Publication 557.

“No” applies if you are a governmental unit referred to in section 170(c)(1) or a private foundation referred to in section 509(a).

Generally, these organizations test consumer products to determine their acceptability for use by the general public.
Private foundations lack general public support. What distinguishes a private operating foundation from other private foundations is that it engages directly in the active conduct of charitable, religious, educational, and similar activities (as opposed to indirectly carrying out these activities by providing grants to individuals or other organizations). Private operating foundations are subject to more favorable rules than other private foundations in terms of charitable contribution deductions and attracting grants from private foundations. However, to be classified as a private operating foundation, an organization must meet certain tests. See additional information about private operating foundations.
Only organizations applying for reinstatement under section 4 or 7 of Rev. Proc. 2014-11 may use Form 1023-EZ. If you are applying for retroactive reinstatement under section 5 or 6 of Rev. Proc. 2014-11, you must submit the full Form 1023 along with the appropriate reasonable cause statement and a statement confirming you have filed the required annual returns as described in the revenue procedure.