How to File for 501C Tax Exempt for a Ministry

Filing for the 501C tax-exemption status requires filling out multiple forms.

Under the Internal Revenue Code Section 501(c)3, some organizations, such as churches, are tax-exempt. To gain this tax exemption, ministries must submit an application with forms to the IRS. Fees to file the application are $400 if the organization does not expect annual gross receipts averaging more than $10,000 for the next four years. For an organization expecting average gross receipts exceeding $10,000 over the next four years, the fee is $850.

Instructions

1. Determine if the organization is eligible for 501(c)3 exemption status. The IRS provides a step-by-step application process to check the eligibility on its Web page. To be eligible, the organization must not be run for a private interest but for an exempt purpose, none of its earnings can go to shareholders, and the organization is restricted in lobbying the government.

2. Apply for Employer Identification Number by using Form SS-4.

3. Fill out Form 1023. This is the application form to be exempt under 501(c)3.

4. Fill out Form 2848 for power of attorney if a third party will represent the ministry.

5. Attach all documents together and mail to the Internal Revenue Service, P.O. Box 12192, Covington, KY 41012-0192.

Tips & Warnings

• When filing these forms, the filer should have financial information for any prior years along with information on how the ministry is run and who runs it.

• The IRS expects to have an online software system to help groups prepare Form 1023 up and running sometime in 2010. The fee to use that system, called Cyber Assistant, will be $200 for all organizations regardless of size.

References

• Internal Revenue Service: Application Process
• IRS: Form 1023
• IRS: Form 2848
• IRS: Exemption Requirements
• IRS: Form SS-4