DIY - Guide for Obtaining Tax Exemption from the IRS

Obtaining 501(c)(3) tax-exempt status from the IRS is a relatively simple process on paper. You fill out either Form 1023 or Form 1023-EZ, submit it to the IRS, and wait for a response. The actual process tends to be a little bit more complicated.

Organizing Document Requirements

The first thing you need to know is that the IRS requires a nonprofit to have language in its organizing documents detailing its exempt purpose, describing what happens upon dissolution, and acknowledging the IRS rules for nonprofits. For more information, see PBUSA and IRS Required Language: What does it mean?.

1023-EZ

The 1023-EZ is filed when you believe your organization will not bring in over $50,000 in any given year over the next three years, and if your organization has not brought in over $50,000 in the previous three years. There are other requirements which can be seen on the IRS eligibility worksheet. In general, as long as they meet the income requirements, most school booster clubs will be able to file the 1023-EZ.

The 1023-EZ has a filing fee of $275 and is only a few pages long. I believe a layperson can prepare and file the 1023-EZ on their own as long as they have a good attention to detail, read the instructions, and are willing to read the tax code when it is cited.

Form 1023

Form 1023 is for any organization seeking 501(c)(3) status that does not qualify to use Form 1023-EZ. Form 1023 is at least a dozen pages long, plus situationally required schedules, additional attachments, and a $600 filing fee. Parent Booster USA does not recommend attempting to prepare the 1023 without professional assistance, as it is an expensive and time-consuming process that the average person is unlikely to succeed at.