Form 1023-EZ: Streamlined Application for Recognition of Exemption Under Section 501(c)(3)
A simplified version of Form 1023 for small organizations seeking 501(c)(3) tax-exempt status, with projected annual gross receipts of $50,000 or less and total assets of $250,000 or less.
Overview
IRS Form 1023-EZ is a streamlined application for recognition of tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Introduced in 2014, it was created to reduce the administrative burden on small nonprofits that historically faced the same lengthy Form 1023 process as large organizations. The IRS designed the 1023-EZ as a three-page online form — filed exclusively through Pay.gov — intended for organizations whose complexity and size do not warrant the full application process.
The form allows qualifying organizations to attest to their eligibility, activities, and organizational structure rather than submitting detailed financial statements, governing documents, or narrative descriptions of programs. Once approved, an organization receives a determination letter from the IRS confirming its 501(c)(3) status, making it eligible to receive tax-deductible contributions and apply for grants. The approval rate and processing time for 1023-EZ applications are generally much faster than for the full Form 1023, often within a few weeks rather than several months.
It is important to understand that 1023-EZ approval does not relieve an organization of its ongoing compliance obligations. Organizations that receive a determination letter must still file annual information returns (typically Form 990-N, 990-EZ, or 990, depending on gross receipts), maintain records consistent with their stated exempt purpose, and adhere to the operational and organizational tests under IRC § 501(c)(3). The IRS has noted in post-filing audits that some 1023-EZ organizations do not actually qualify for 501(c)(3) status, so CPAs should carefully vet eligibility before advising clients to use this form over the full Form 1023.
Who Files This Form?
An organization may use Form 1023-EZ only if it passes the IRS eligibility worksheet, which screens for both size and organizational type. The two primary financial thresholds are: projected annual gross receipts of $50,000 or less in each of the first three years of operation, and total assets of $250,000 or less at the time of filing. Organizations that exceed either threshold must use the full Form 1023.
Beyond the financial tests, numerous organizational types are categorically ineligible for 1023-EZ regardless of size. These include churches and church-related organizations, schools, colleges, and universities, hospitals and medical research organizations, organizations supporting a Type III supporting organization structure, organizations with a foreign address or foreign activities that constitute more than an insubstantial part of activities, organizations that have had their tax-exempt status revoked (other than due to failure to file), successor organizations to for-profit entities, and organizations that have previously filed Form 1023 or 1023-EZ.
Organizations formed as limited liability companies (LLCs) are also generally ineligible for 1023-EZ. Additionally, organizations that have not yet been formally incorporated or established under state law should complete that step before filing, as the form requires an Employer Identification Number (EIN) and a formation date.
The eligibility worksheet in the official instructions is the definitive checklist — CPAs should walk through every question before recommending 1023-EZ. Choosing this form when the full 1023 is actually required can result in a revoked determination letter, creating a costly and reputationally damaging situation for the nonprofit client.
Key Fields
Part I: Identification of Applicant
This section captures the organization's legal name, EIN, mailing address, formation date, and state of organization. The name here must exactly match the name on the organization's governing documents and the EIN registration — any mismatch is a common cause of processing delays.
Part II: Organizational Structure
The applicant selects the legal form of the organization (corporation, unincorporated association, or trust). The selection must match the actual formation documents. LLCs are not eligible to use 1023-EZ, so selecting the wrong entity type can lead to a denial or revocation.
Part III: Your Specific Activities
The filer selects up to three NTEE (National Taxonomy of Exempt Entities) codes that best describe the organization's primary activities. This is a critical field because the IRS uses it to assess whether the organization's stated purpose aligns with 501(c)(3) requirements. Choosing codes that do not reflect the actual mission can cause post-approval compliance issues.
Part IV: Foundation Classification
This section asks the organization to classify itself as a public charity or private foundation, and to identify the specific public charity basis (e.g., a 509(a)(1) organization described in 170(b)(1)(A)(vi), a 509(a)(2) organization, or a supporting organization). Misclassification here affects donor deductibility rules and ongoing compliance obligations — most small nonprofits intend to be public charities, but the basis must be accurately selected.
Part V: Reinstatement After Automatic Revocation
Organizations that lost their exempt status due to failure to file for three consecutive years and are seeking reinstatement must check the applicable box here and may qualify for retroactive reinstatement under certain IRS procedures. This section is only relevant to reinstating organizations, not new applicants.
Part VI: Eligibility Worksheet Certification Statements
This is the heart of the 1023-EZ — a series of attestations confirming that the organization meets all eligibility criteria, including the gross receipts and asset thresholds, that it is not an ineligible organization type, and that its purposes and activities are consistent with 501(c)(3) requirements. The officer signing is certifying under penalty of perjury, so CPAs must ensure each statement is accurate before submission.
Gross Receipts and Assets Attestation
The applicant certifies that projected annual gross receipts will not exceed $50,000 in any of the first three years, and that total assets do not exceed $250,000. These are projections, not historical figures for a new organization — but they must be made in good faith, and organizations that grow beyond these thresholds may face scrutiny if the initial representations were unreasonable.
Officer/Director/Trustee Information
The filer must list the names, titles, and mailing addresses of all officers, directors, and trustees. This information is publicly available once the determination letter is issued, so the organization should be prepared for that transparency. Common mistakes include listing only founders and omitting other board members.
Authorized Representative (if applicable)
If a CPA, attorney, or other representative is completing the form on behalf of the organization, Form 2848 (Power of Attorney) should be on file. The 1023-EZ itself has a section for the preparer's information, but authorization should be documented separately to allow the representative to correspond with the IRS if questions arise.
Filing Deadlines
No penalty for the form; $275 user fee applies.
Step-by-Step Instructions
- 1
Complete the IRS eligibility worksheet in the official 1023-EZ instructions before doing anything else. The organization must answer 'No' to every disqualifying question to proceed. If any answer is 'Yes,' the organization must use full Form 1023.
- 2
Ensure the organization has obtained its Employer Identification Number (EIN) from the IRS via Form SS-4 or the IRS online EIN application, and that the legal name and structure are finalized under state law. The EIN must already exist before filing — 1023-EZ does not create one.
- 3
Create a Pay.gov account or log in to an existing one. Form 1023-EZ is filed exclusively online through Pay.gov — there is no paper version. The IRS will not process a paper submission of this form.
- 4
Complete Part I with the organization's exact legal name as it appears in its articles of incorporation or organizing document, along with the EIN, formation date, and address. Cross-check against the EIN confirmation letter (CP 575) to avoid name mismatches.
- 5
Select the correct organizational structure in Part II. If the entity is a corporation formed under state law, select 'Corporation.' Verify this matches the state formation document — do not guess based on informal understanding of the entity.
- 6
In Part III, select up to three NTEE activity codes that accurately describe the organization's primary charitable purpose. Review the NTEE code list carefully; selecting a vague or incorrect code may invite IRS questions or jeopardize the exemption if activities later appear inconsistent.
- 7
Determine and select the correct foundation classification in Part IV. For most small nonprofits seeking public charity status, this will involve selecting the appropriate 509(a) basis. If uncertain, consult the IRS instructions or consider using Form 1023 to provide a more complete factual record.
- 8
Review and certify each attestation in Part VI carefully. These statements confirm eligibility and accuracy of all information. The authorized officer must sign, not the CPA. Ensure the signer understands that this is a certification under penalty of perjury.
- 9
Submit the completed form through Pay.gov and pay the $275 user fee. Save the Pay.gov confirmation number and any IRS acknowledgment emails. Monitor the IRS's publicly available Tax Exempt Organization Search tool (TEOS) to confirm approval, and retain a copy of the determination letter for the organization's permanent records.
Common Mistakes to Avoid
Filing 1023-EZ when the organization is ineligible, particularly for churches, schools, or organizations with foreign activities.
Always complete the IRS eligibility worksheet in full before choosing this form. When in doubt, use Form 1023 — a revoked determination letter is far more damaging than a longer initial review process.
Selecting NTEE activity codes that don't accurately reflect the organization's actual programs and charitable purpose.
Review the complete NTEE code list and select codes that most closely match what the organization will actually do, not what sounds aspirational. Inconsistency between stated activities and actual operations is a leading cause of post-approval IRS compliance issues.
Misidentifying the foundation classification, particularly confusing 509(a)(1) and 509(a)(2) public charity status.
Consult the IRS instructions on public charity classifications before selecting. Most community-based nonprofits that will rely primarily on public donations qualify under 509(a)(1)/170(b)(1)(A)(vi); organizations that earn a substantial part of their support from fees for services may fit 509(a)(2). If the distinction is unclear, Form 1023 allows for a more complete analysis.
Not verifying that the organization's name on the 1023-EZ exactly matches the EIN registration and state formation documents.
Pull the IRS CP 575 EIN confirmation letter and the state-issued articles of incorporation before entering the name. Even minor differences in punctuation or abbreviation can cause the IRS to flag the application or create a records mismatch.
Assuming that 1023-EZ approval means no ongoing filing obligations, particularly the annual 990-N e-Postcard requirement.
Advise clients at the time of approval that they must file Form 990-N, 990-EZ, or full 990 annually, depending on gross receipts, and that three consecutive years of non-filing will result in automatic revocation of exempt status.
Having the CPA or preparer sign the certification in Part VI rather than an authorized officer of the organization.
The certification must be signed by a duly authorized officer, director, or trustee — not the preparer. The CPA's role is to prepare and advise, but the organization's representative is the certifying party. File Form 2848 if the CPA needs to correspond with the IRS on behalf of the organization.
Frequently Asked Questions
Processing times for Form 1023-EZ are generally much faster than for the full Form 1023. Most applications are approved within two to four weeks, though times can vary based on IRS workload. The IRS publishes current processing time estimates on its website, and applicants can check their status through the IRS Tax Exempt Organization Search tool.
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