Frequently Asked Questions

Is incorporation a requirement for obtaining tax-exempt status?

Incorporation is not a mandatory requirement for obtaining tax-exempt status. While it is beneficial for most charities, organizations can opt to become an unincorporated nonprofit association. However, it's important to note that the IRS does require certain information for the tax-exempt application process, such as a description of activities, an Employer Identification Number (EIN), policies and bylaws, publications, printed materials, and financial information. One key document that the IRS requires is the article of incorporation, which must contain specific provisions and languages such as a dissolution clause and a purpose clause. This does not mean that incorporation is a prerequisite, but rather that the IRS needs to understand the structure and purpose of your organization. The process of filing for tax-exempt status, whether through Form 1023 or Form 1023-EZ, can be challenging and requires careful attention to detail. To avoid processing delays, applicants should strictly follow the instructions, submit complete and accurate information, and pay the appropriate fees.