How Long Does It Take to Get 501(c)(3) Status from the IRS?
Every year, the IRS processes a staggering number of applications for tax-exempt status, with more than 95,000 requests flooding in. If you're a nonprofit organization seeking tax-exempt status, it's essential to understand the process and the timeline involved. To help you navigate through this journey, we've outlined the steps and provided insights into the wait times you can anticipate.
Submission and Acknowledgement
Once you submit your application for tax-exempt status, the first step in the process is receiving an acknowledgment notice from the IRS. This notice signifies that your application has been successfully received and is in their system. If any additional information is required to evaluate your application, it will be assigned to an Exempt Organizations specialist.
“As of January 31, 2020, Form 1023 applications for recognition of exemption must be submitted electronically online at Pay.gov.”
Assignment to a Specialist
The IRS assigns applications to Exempt Organizations specialists who assess nonprofit organizations' eligibility for tax-exempt status. A specialist will be assigned to your case if your application requires further review. They will contact you if any additional information or clarification is needed.
Timeline
The IRS offers a chart of postmark dates to determine if your application has been assigned to a specialist. Approval can take 3 months to a year.
If your application was postmarked after the dates listed, it has not yet been assigned to a specialist. In such cases, keep checking the IRS website for updates and await IRS contact. There's no need to make inquiries by phone.
Checking the Status of Your Application
If your application was submitted before the specified postmark date and you haven't been contacted by the IRS, you can check the status of your application. However, please note that the IRS does not respond to status inquiries via email. Here's how to check:
By Phone: Call the toll-free number 877-829-5500.
By Fax: Fax your information to 855-204-6184.
By Mail (Regular Delivery): Internal Revenue Service EO Determinations Attn: Manager, EO Correspondence P.O. Box 2508 Room 6-403 Cincinnati, OH 45202
By Express and Overnight Delivery: Internal Revenue Service Room 6-403 Attn: Manager, EO Correspondence 550 Main Street Cincinnati, OH 45202
Information You'll Need
When contacting the IRS for status updates, make sure you have the following information:
Name of the organization.
Organization's employer identification number (available on the application form or Form W-2).
Application number.
Date when the application was submitted.
Indicate if you are an officer or director legally authorized to represent the applicant.
Practitioners may need to submit a valid Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization.
Determination Letter and Tax Exempt Organization Search (TEOS)
Once the IRS determines your tax-exempt status, they will mail you a determination letter. Determination letters approving tax-exempt status are also posted on the Tax Exempt Organization Search (TEOS). Before contacting the IRS to check your application status, you may want to search TEOS to see if your determination letter has been issued.
Navigating the process of obtaining tax-exempt status can be complex, but with patience and the right information, you can successfully achieve this important milestone for your nonprofit organization. If you have any further questions or need assistance, please contact the IRS using the contact information provided above.
Source
Where’s My Application for Tax-Exempt Status? | Internal Revenue Service. (2017). Irs.gov. https://www.irs.gov/charities-non-profits/charitable-organizations/wheres-my-application-for-tax-exempt-status
After a project is done with its 'Model A' fiscal sponsorship relationship, they need to become self-sufficient in managing their nonprofit program and resources. To help with this, Social Impact Commons has provided a basic checklist that outlines the steps necessary to launch the project as an independent organization.