IRS Form 1023: The Gateway to 501(c)(3) Status in 2026
If you are starting a nonprofit in Idaho or Georgia, you’ve likely realized that "forming a nonprofit" and "getting tax-exempt status" are two different things. While filing your Articles of Incorporation with the Secretary of State creates your legal entity, filing IRS Form 1023 is what grants you the coveted 501(c)(3) status.
In 2026, the process is entirely digital, and the stakes for board governance are higher than ever. Here is what every founder needs to know.
What Exactly is Form 1023?
Form 1023 is the "Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code." It is a comprehensive deep dive into your organization’s mission, finances, and structure. When the IRS approves this form, you receive a Determination Letter, which:
Exempts your organization from federal income tax.
Allows donors to take tax deductions for their contributions.
Grants eligibility for many private and government grants.
Form 1023 vs. Form 1023-EZ: Which Should You Use?
The IRS offers two versions of the application. Choosing the wrong one can lead to a rejected fee or a future audit.
The Standard Form 1023
Who it’s for: Large organizations, schools, churches, hospitals, and any nonprofit expecting to raise more than $50,000 annually.
The Details: It requires a three-year projected budget, a detailed narrative of your activities, and copies of your bylaws and articles.
The Cost: $600 (as of 2026).
The Form 1023-EZ (Streamlined)
Who it’s for: "Minnow-sized" nonprofits with gross receipts of less than $50,000 and total assets under $250,000.
The Details: A much shorter, three-page online form.
The Cost: $275.
Warning: Many organizations outgrow the EZ limits within their first two years, which can trigger complex reporting requirements later.
Local Compliance: Idaho and Georgia Requirements
Getting your federal 501(c)(3) status is the biggest hurdle, but your work isn't done at the state level.
For Idaho Nonprofits
The 3-Director Rule: Idaho law and the IRS both require a minimum of three directors to be considered for most tax exemptions.
State Tax Commission: Once you receive your IRS Determination Letter, Idaho automatically recognizes your state income tax exemption, but you must still apply for a Sales Tax Exemption if you plan to make retail purchases for the mission.
For Georgia Nonprofits
Solicitation Permits: Before you ask for a single dollar in Georgia, you must register with the Georgia Secretary of State’s Charities Division. They will ask for a copy of your Form 1023 or your Determination Letter.
Financial Audits: If your Atlanta nonprofit grows quickly and collects more than $1,000,000 in a year, Georgia law requires a certified financial audit by an independent CPA.
New for 2026: The "Governance Integrity" Check
As of this year, the IRS is paying closer attention to board composition. New legislative proposals, like the Nonprofit Governance Integrity Act, emphasize that your board must be an active, fiduciary body.
When filling out your Form 1023, you must ensure your Conflict of Interest Policy isn't just a "template" but a document that your board actually understands and follows. The IRS now frequently cross-references your application with your board’s professional backgrounds to ensure no "private inurement" (where founders profit unfairly from the nonprofit).
Don’t Risk Your Tax-Exempt Status
Filing Form 1023 is a "one-shot" process for many. If your narrative is too vague or your bylaws don't contain the specific "dissolution clause" required by the IRS, your application could be delayed by 6 to 12 months.
At Atkins Law Offices, we help nonprofits in Idaho and Georgia navigate the transition from a passionate idea to a fully compliant, tax-exempt organization.