How to File Form 1023?

The narrative description of your activities outlines all your organization’s past, present, and future activities. If you have a website, you may attach a paper copy to support your narrative description. However, you shouldn’t repeat what you’ve already stated in your organizing document. Instead, focus on what the specific activity is, who will conduct said activity, when the activity will take place, where the activity is conducted, how the activity is funded, and other such questions related to said activity.

However, you shouldn’t repeat what you’ve already stated in your organizing document.

Compensation encompasses salary, wages, deferred compensation, retirement benefits, fringe benefits, low-interest loans, payment for personal travel, entertainment, athletic or country club membership, personal use of property, bonuses, and other expenses. For each person listed, you must outline their annual compensation and any additional compensation that may occur throughout the year as best you can.

• If an independent contractor makes over $600 in a given year, they must be issued 1099 from the organization.
• If an employee may or will receive more than $50,000 annually in compensations, they are considered a highly compensated employee, and you will need to be prepared to list your five highest compensated employees.
• All other financial decisions, expenses, profits, etc., must also be documented.

Note: A conflict of interest arises when a person in a position of authority benefits from a decision they could make. If such a conflict arises, the person who could benefit must step aside and allow another to decide.

• A. Statement of Revenues and Expenses
• B. Balance Sheet (for your most recently completed tax year) Year End

The balance sheet depicts the financial position of an organization at a specific point in time, eventually at the close of an accounting period. It projects an organization's financial health or net worth at a given time. The balance sheet of a nonprofit organization includes three main sections:

• Assets
• Liabilities
• Fund balance

Organizations must provide the necessary details related to the above sections for the end of the year.

By filing Form 1023, you are petitioning the IRS whether you will get all parts of your Federal taxes exempt from paying. And by letting the IRS know about your income and how much you are receiving it, the IRS will categorize you under section 501(c)(3) of the Internal Revenue Code. The sub-categories are

• Public charities
• Private Foundations or Operating Private Foundations

To complete this part, use the formation date you listed in Part II, line 2, and the date you will submit this electronic form and required user fee payment to determine whether you’re submitting this application within 27 months from the month in which you were formed.

If you’re not submitting this application within 27 months from your formation, complete Schedule E.

Most organizations should file an annual return (Form 990, 990-EZ, or Form 990-PF) or notice (Form 990-N, Electronic Notice (e-Postcard)). Based on your gross receipts and assets filing of form 990, returns are classified. If you fail to file the above-mentioned returns for three years continuously, your organization’s exempt status will get automatically revoked.

However, there is an exception to this rule for certain organizations such as churches, certain church affiliated organizations, and certain affiliates of a governmental unit.

An officer, director, trustee, or another authorized official who is authorized to sign must sign the return. The signature must be accompanied by the title or authority of the signer and the date. If the signature is missing, then Form 1023 is not considered by the IRS.