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Form 1023: Application for Recognition of Exemption + Schedule A Explanatory Statement for Churches

508s that successfully complete their Form 1023 Application will keep all of their First Amendment religious rights, continue to operate according to their Biblical faith, protect the privacy of their donors, and maintain all of the IRS Tax Code Exceptions for churches. Let The 508 Company help your 508 apply for tax-exempt status the right way.

What is Form 1023?

Form 1023, also known as the Application for Recognition of Exemption, is an 11-page application that highlights your ministry’s history, organization, activities, finances, and numerous other details used by the IRS to determine if you qualify for 501(c)(3) tax-exempt status. 

Schedule A for Churches

Schedule A of the IRS Form 1023 is only for churches and is used to determine whether your ministry may properly be characterized as a church and officially recognized as a tax-exempt organization by the IRS. 

Does My 508 Need to Apply for 501(c)(3) Tax-Exempt Status?

No. Churches are not required to file Form 1023 to be considered a tax-exempt organization. However, by filing Form 1023, churches can obtain a Determination Letter from the IRS that is considered proof that the church is a 501(c)(3) tax-exempt organization. There are several reasons why many churches apply for tax exemption:

  • More Appealing to Donors and Easier to Explain: Having official 501(c)(3) status with a Determination Letter from the IRS gives churches the ability to guarantee that offerings and donations from individuals and private foundations are tax-deductible to donors because there is written proof from the IRS that the church is a registered charity. If you skip the 501(c)3 application, you won’t receive a tax-exempt Status Determination Letter from the IRS, which limits your fundraising options. The Determination Letter is required by many, if not most, grant-making foundations from which you may seek support. Individual donors often ask for a copy of the letter as a condition of giving, and rely upon this document to back up any tax write-offs for their contributions.
  • State Sales and Property Tax Exemptions: Many states do not automatically guarantee sales tax exemption without a 501(c)(3) Determination Letter from the IRS.
  • Nonprofit U.S. Postal Mailing Permit: Bulk mailing rates and most grants will not be extended to your church or ministry without official 501(c)(3) Determination Letter from the IRS. Any ministry that spends more than a couple thousand dollars per year on mail should get a nonprofit mailing permit to avoid wasting donors’ funds.
  • GuideStar Tax-Exempt Profile: Guidestar only lists organizations that have a 501(c)(3) Determination Letter from the IRS. Many companies that provide nonprofit discount rates require your ministry to be listed on GuideStar.

Deadline: An organization must submit Form 1023 within 27 months of its formation to be recognized as tax-exempt for the entire history of its existence. If a qualifying organization submits after the deadline, the IRS will recognize its tax-exempt status based on the application’s postmark date.

Form 1023 contains the following 11 sections:

  1. Part One: Identification of Applicant
  2. Part Two: Organizational Structure
  3. Part Three: Required Provisions in Your Organizing Document
  4. Part Four: Narrative Description of Your Activities
  5. Part Five: Compensation and Other Financial Arrangements
  6. Part Six: Individuals/Organizations that Receive Benefits
  7. Part Seven: Your History
  8. Part Eight: Your Specific Activities
  9. Part Nine: Financial Data
  10. Part Ten: Public Charity Status
  11. Part Eleven: User Fee Information and Signature

Will My 508 Keep Its Rights If I Apply?

Yes. As mentioned before, 508s that successfully complete their Form 1023 Application will keep all of their First Amendment religious rights, continue to operate according to their Biblical faith, protect the privacy of their donors, and maintain all of the IRS Tax Code Exceptions for churches. 

Let The 508 Company help your 508 apply for tax-exempt status the right way.

Ready to Start Your 508 Journey?

After you get started with us, you’ll be able to schedule your initial consultation with a 508 Compliance Specialist within the next business. Our goal is to have your filing completed within 21 days.

Get Started Today!

The 508 Company does not provide tax, financial, or legal advice. Use of our services does not create an attorney-client relationship. The 508 Company is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.

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“The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data when Republicans started making these claims, audits decreased to 370,000, or about 0.2 percent… The budget office estimated increasing I.R.S. funding would return enforcement to its 2010 levels. Doing so would result in about 1.2 million more audits; of those, 583,000 would target people making less than $75,000.”

The New York Times, “Fact-Checking the Misleading Claim About 87,000 Tax Agents”, November 6, 2022

“…For example, you educate believers on national issues that are central to their belief in the Bible as the inerrant Word of God. Specifically, you educate Christians on what the bible says in areas where they can be instrumental including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations. The bible teachings are typically affiliated with the Republican party and candidates. This disqualifies you from exemption under IRC Section 501(c)(3).”

Stephen A. Martin, IRS Director, Exempt Organizations, Rulings and Agreements

How Much Would You Like to Contribute?

Your contribution helps a church or religious organizations take back their First Amendment religious rights, operate according to their Biblical faith, and protect the privacy of their donors.

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