How do you file for a tax exempt certificate?


Quick Answer

Applying for tax-exempt status with the Internal Revenue Service requires several steps, including filling out the correct form for the appropriate section of the tax code, according to BizFilings. Usually, organizations seeking tax-exempt status are nonprofit corporations that qualify under section 501(c)(3).

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Full Answer

Most nonprofit organizations seeking 501(c)(3) status should incorporate within a state, reports BizFilings. They must include their Articles of Incorporation with their application, which should include a statement of their business purpose. Their purpose must be charitable, educational, scientific or other purpose listed in section 501(c)(3), states the IRS. Nonprofit organizations should also have a federal employee identification number, explains Nolo. Unincorporated groups applying for tax-exempt status should consult a lawyer.

Once these steps are completed, fill out Form 1023 and attach the Articles of Incorporation and the corporation's bylaws, states Nolo. This form should include the name of the organization, contact information, a description of the organization's activities and an explanation of finances and compensation. The organization must show that it does not exist for the sole benefit of its trustees, major contributors or private interests. Nonprofits with 501(c)(3) status also face restrictions on political or legislative activity, especially campaigning for or against a candidate, explains the IRS.

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