Exemption is granted once and lost quietly — usually through a missed filing, not a scandal.
Goldenthal & Suss Consulting P.C. prepares applications for federal tax-exempt status — Form 1023 and Form 1023-EZ for 501(c)(3) organizations, and Form 1024 or 1024-A for other exempt categories — and helps organizations keep that status once granted. Ongoing maintenance includes annual Form 990 filings, unrelated business income monitoring, public support test calculations, state charitable registration, and reinstatement for organizations whose exemption was automatically revoked after three consecutive years of not filing.
The Form 1023 asks for more than most founders expect: a detailed narrative of activities, three to four years of projected or actual financial information, governance policies, and organizing documents with the correct purpose and dissolution clauses. Most delays and IRS follow-up questions trace back to vague activity descriptions or organizing documents that need amendment.
Smaller organizations may qualify for the streamlined Form 1023-EZ. It is faster and cheaper, but some funders and state agencies give it less weight, and the eligibility tests must be met honestly.
An organization that fails to file a required Form 990, 990-EZ, or 990-N for three consecutive years loses its exemption automatically, with no notice beforehand. Reinstatement is possible, but it requires a new application and, for retroactive reinstatement, a showing of reasonable cause. A simple filing calendar avoids all of it.
Organizations also need to watch the public support test that keeps them a public charity rather than a private foundation, and track unrelated business income that may require a Form 990-T.
To have exemption recognized retroactively to the date of formation, an organization generally must file Form 1023 within 27 months after the end of the month in which it was legally formed. Applications filed later are generally effective from the filing date, unless the organization qualifies for an extension or relief.
Only if the organization meets the eligibility requirements, which include projected annual gross receipts of $50,000 or less in the current year and each of the next two years, actual gross receipts of $50,000 or less in each of the past three years, and total assets of $250,000 or less. Certain organization types are ineligible regardless of size. Review the IRS eligibility worksheet before filing.
An exempt organization that does not file its required annual return for three consecutive years automatically loses its tax-exempt status. Its name is published on the IRS revocation list, contributions may no longer be deductible, and it must reapply to regain exemption.
Sources & review
IRS: Form 1023 and 1024/1024-A user fee $600, 1023-EZ $275, all via Pay.gov; 1023-EZ eligibility per Rev. Proc. 2022-8 and the 1023-EZ instructions; 27-month rule per Form 1023 Schedule E guidance. Fees deliberately not printed on the page — they change. Reviewed 2026-10-01. Thresholds and deadlines change — confirm current requirements before relying on them.
Tell us about your organization and the deadline you are working toward. We will tell you what the engagement involves and what it costs.
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