Page 100 - Washington Nonprofit Handbook 2018 Edition

CHAPTER 25. Obtaining Recognition for a Publicly Supported Charity

A new organization will be classified as a public charity by virtue of its public

support if it can show on its Form 1023 that it reasonably can be expected to meet
the applicable public support test (See Chapter 22 for discussion of the differences
between public charities and private foundations). During the first five years of
operation, the organization retains its status as a publicly supported organization
without regard to the calculation of the “public support test” on Schedule A of the
Form 990. Beginning with the organization’s sixth taxable year, the organization
must show that it meets the public support test based on prior years’ public
support in order to remain classified as a publicly supported organization.

CHAPTER 26. IRS Processing of Exemption Applications

a. Mailing Address

Form 1023 (Application for Recognition of Exemption Under Code Section
501(c)(3)) and instructions are available at http://www.irs.gov. The instructions and
checklist accompanying the form contain the mailing address for the application. If
submitting the application by regular mail, send it certified mail to receive
confirmation of the date the application was received by the IRS. Do ensure that
however the application is sent, the organization will receive confirmation that the
application was received by the IRS.

b. Expedited Handling

The IRS is reluctant to consider any application out of turn but will
sometimes be persuaded if an organization can show that it will lose funding from
an unrelated third party, such as a grantmaking foundation, if the organization
does not receive an expedited ruling. To ensure that a request for expedited
handling is not overlooked, place it on top of all other materials sent to the IRS and
type “Request for Expedited Review” in large, bold type to call attention to the
request. See page 3 of the Instructions for Form 1023 for more information about
requesting expedited review.

c. User Fee

As noted above, the IRS does not begin processing an application until the
check for the User Fee has cleared, so an organization may speed up its application
slightly by paying with a cashier’s check or money order. If payment is made by
check, watch bank statements to make sure the IRS does, in fact, cash the check for

WASHINGTON NONPROFIT HANDBOOK -89- 2018