Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic. 1a. Your organizing document, [insert title of document], doesn't meet the organizational test of IRC Section 501(c)(3). To meet these requirements, you must amend your organizing document to include [an] adequate [purpose and/or dissolution] clause[s]. The following is an example of [an] acceptable [purpose and/or dissolution] clause[s]: 1b. Please review your organizing document. You must amend your organizing document if: It doesn't sufficiently limit your purposes to those specifically described in IRC Section 501(c)(3), or It doesn't permanently dedicate your assets to purposes specifically described in IRC Section 501(c)(3) as required for tax exemption as an organization described under IRC Section 501(c)(3). The following is an example of [an] acceptable [purpose and dissolution] clause[s]: A1 cont'd. [The organization is organized exclusively for charitable, religious, educational and scientific purposes under Section 501(c)(3) of the Internal Revenue Code, or corresponding sections of any future federal tax code.] [Upon the dissolution of this organization, assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose.] For more details and examples of specific language that meets the requirements, see the Form 1023 Instructions, pages 7 and 8 on Pay.gov. A 501(c)(3) corporation formed as mutual benefit corporation You're incorporated as a mutual benefit corporation, which is typically formed to serve a limited number of members. Unlike a mutual benefit corporation, a public benefit corporation is formed to benefit the public. a. If you formed as a mutual benefit corporation in error, amend your articles of incorporation to change to a public benefit corporation. Send a copy that shows proof of filing with your state of incorporation. We can't accept a copy that only shows it was sent to or received by the state. You may want to contact your state for information on how to file the amendment. b. If you're granted exemption, your date of exemption will be the date that you become a public benefit corporation. If you disagree, please explain. If you agree, sign and send back to us the following declaration: We agree to exemption effective the day we are reorganized as a public benefit corporation ___________________________________________ ________________________ Signature of Authorized Individual Date c. If you intended to form as a mutual benefit corporation, please explain how you qualify for exemption. Bylaws not adopted You indicated in your application that you haven't adopted bylaws. Explain how you select your governing body, including qualifications, duties and details on election and termination. Bylaws missing You indicated in your application that you’ve adopted bylaws. Submit a copy of your bylaws. Organizing document or bylaws authorize shares of stock or refer to stock Your [organizing document, [insert title of document]/bylaws] indicated you are authorized to issue shares of stock or reference stock provisions. Nonprofit organizations do not ordinarily issue stock. If you do not issue shares of stock, please amend your [insert title of document] to remove all references to stock. Submit a copy of your amendment which shows proof of [filing/adoption/execution]. We cannot accept a copy that only indicates it was sent to or received by the state. You may want to contact your state of incorporation for information on how to file the amendment. If you have already issued shares of stock, please provide details on the stock arrangement, including all rights the holders of your stock have. If you do not agree to amend your [insert title of document], please submit a statement signed by an officer or director explaining your stock provisions in detail. Board member online sanctions list search match name or address For each of your current officers, directors, or trustees, provide first and last names, residential addresses and name and address of your employer(s) for the past three years. Other individual (non-board member) online sanctions list search match name or address Provide first and last names, residential addresses and name and address of employer(s) for the past three years for your [title of individual(s), such as Power of Attorney]. Board relationships need to be clarified [It appears/You indicated] two or more of your officers [may be/are] related to each other through family or business relationships. Identify the individuals and explain the relationships. 990 filing exception claimed, specific exception requesting unclear You requested to be excused from filing Form 990 if granted exemption. Most organizations are required to file Form 990, 990-EZ, 990-N, or 990-PF. Describe the specific filing exception you meet. You can find information about filing requirements and exceptions on our website at www.irs.gov/charities under “Annual Filing and Forms.” Missing schedule X Complete [the enclosed copy of] Form 102[X], Schedule [X, Full or Abbreviated Name of Schedule], including all required attachments and explanations. [You can get a copy of the schedule on Pay.gov by searching for the form number and then clicking the button for “Preview Form.”] Incomplete Schedule X 11. You didn't include explanations and attachments necessary for the Schedule [X] you submitted. Review the enclosed copy of your Schedule [X] and submit [all missing explanations and attachments]. Effective date w/ 1120 filings 12. Generally, organizations that have filed Form 1120 as a taxable entity are considered exempt as of the postmark date of their application. Our records indicate that you filed Form 1120 for tax years [insert tax years]. If you qualify for exemption, do you agree to exemption effective [insert date], the postmark date of your application? If you disagree, please explain. Additional information See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.
