What's The Difference Between A 501c3 and A 1023?

A 501(c)(3) and 1023 are not the same things, but rather complementary of one another. Section 501(c)(3) is part of the Internal Revenue Code that describes how to become tax-exempt status and Form 1023 must be filed in order to achieve that status.

Section 501(c)(3) of the Internal Revenue Code describes an organization’s requirements that are needed in order to achieve tax-exempt status. This section of the tax code outlines what it is to be tax-exempt as a religious, scientific, literary, educational, and other charitable organization. The simplified guidelines are as follows:

“An organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.” -IRS

Form 1023 is the application for organizations that wish to be tax-exempt under section 501(c)(3). In order to be legally recognized as a tax-exempt organization under 501(c)(3), this form must be filled out in its entirety. The form can be found online in PDF form. The form must be filled out, printed, and the hard copy must be mailed to the IRS for review and approval. The alternative form, 1023-EZ, is known to be much simpler and easier to complete. To learn the difference between these forms, check out our blog “Difference between a 1023 and a 1023-EZ”

Section 501(c)(3) outlines the qualifications of a tax-exempt organization in certain respects while Form 1023 must be filled out in order to obtain the tax-exempt status.

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