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Keep in mind that an organizations tax-exempt status isnt permanent. The IRS can revoke a nonprofits federal exemption status if, for example, it fails to provide the government with updated information (that it must submit annually) for three consecutive years.
Form 1023 is an application an organization uses for the IRS to issue a determination letter or ruling letter that recognizes an organizations exemption from federal income tax.
The filing fee for Form 1024 is $600 with a processing time of 7-10 months. Taking these costs into account, youll either pay $275 or $600. Lets go back to our graph and add these costs. For more information about each form check out our article on how to start a nonprofit.
For exemption application materials, you are entitled to inspect or receive a copy of the organizations exemption application (Form 1023, 1024, or other document required to be filed), any papers filed in support of the application and any determination letter issued by the IRS with respect to the application.
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