Reviewed and updated October 16, 2026
Rules and decisions to review
- Many organizations seeking recognition under section 501(c)(3) apply using Form 1023 or, if eligible, Form 1023-EZ. Exceptions and eligibility conditions matter.
- An employer identification number identifies the organization but does not prove exemption or charitable deductibility.
- Annual filing obligations can include a Form 990 series return or notice. Failing to file for three consecutive required years generally causes automatic revocation.
- Separate program, fundraising, administration, restricted donations and any unrelated business activity in the books. Employment and other taxes may still apply.
A practical example
A newly formed organization receiving donations should not tell donors that gifts are deductible merely because it obtained an EIN. Its federal status, effective date and qualification need to be established.
Records to gather
Gather organizing documents, bylaws, activity description, budgets, exemption application or determination letter and donation records.
Your next step
Confirm the intended exemption classification and applicable application before soliciting donations as deductible gifts. Build an annual filing calendar and books that distinguish program spending, restricted funds and unrelated activities.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
