1. Gather organization documents
Each application for exemption – except Form 1023-EZ – must be accompanied by an exact copy of the organization’s organizing document. This is generally one of these:
- Articles of incorporation for a corporation
- Articles of organization for a limited liability company
- Articles of association or constitution for an association
- Trust agreement or declaration of trust for a trust
Organizations that do not have an organizing document will not qualify for exempt status. If the organization’s name has been legally changed by an amendment to its organizing documents, they should also attach an exact copy of that amendment to the application.
State law generally determines whether an organization is properly created and establishes the requirements for organizing documents.
2. Determine state’s registration requirements
State government websites have useful information for tax-exempt organizations. They can find things including tax information, registration requirements for charities, and information for employers.
3. Get an employer ID number for the new organization
Organizations can apply for an EIN online, by fax, or by mail. International applicants may apply by phone. The instructions for Form SS-4, Application for Employer I.D. Number have additional details.
Third parties can receive an EIN on a client’s behalf by completing the Third Party Designee section on the bottom of page 1. The third party must remember to get the client’s signature on the form. This avoids having to file a Form 2848, Power of Attorney, or Form 8821,Tax Information Authorization, to get an EIN for their client.
It’s important that an organization doesn’t apply for an EIN until it is legally formed. Nearly all organizations are subject to automatic revocation of their tax-exempt status if they fail to file a required return or notice for three consecutive years. When an organization applies for an EIN, the IRS presumes the organization is legally formed and the clock starts running on this three-year period.