We've Filed 1,200 Exemption
Applications.
The IRS Approved 1,197.
Exempt is a law practice that shepherds organizations from first incorporation through 501(c)(3) determination — turning mission statements into tax-exempt realities with the IRS.
IRS Approval Rate
Industry average: ~50% of applications filed annually make it through the process.
IRS 80th Percentile Processing
Form 1023 standard. We submit complete applications — no back-and-forth that stretches timelines.
Charitable Solicitation Registrations
40 states require registration. We handle the compliance calendar so you don't miss a deadline.
Three paths to 501(c)(3). One clear choice.
Every row is sourced from IRS data, published fee schedules, and our own filed applications. Click any row to expand the full analysis.
| Dimension | ◆ Exempt Attorney-filed · Specialist | DIY Filing Self-prepared · No counsel | Generic Legal General practice · Non-specialist |
|---|---|---|---|
Timeline From formation to IRS determination letter | Exempt Advantage 7–9 months (IRS processing) | 100+ hours prep + 7–9 months IRS | 9–12+ months (with revisions) |
Approval Rate Applications reaching IRS determination | Exempt Advantage 99.75% — 1,197 of 1,200 approved | ~50% complete the process | Varies — denial risk is real |
Cost Structure Total investment to reach determination | Exempt Advantage Transparent flat fee + $600 IRS fee | $600–$1,000 total (if 1023-EZ eligible) | $1,200–$2,500+ with unclear scope |
IRS Audit Support Post-determination examination risk and coverage | Exempt Advantage Clean baseline established at filing | Ongoing compliance risk from weak filing | Baseline quality depends on preparer |
Post-Determination Compliance Annual obligations after approval | Exempt Advantage Full compliance calendar + 40-state guidance | You're on your own after approval | Compliance typically out of scope |
Sources: IRS Form 1023 Instructions (Rev. Jan 2020); IRS Processing Times Dashboard (Feb. 2026); National Council of Nonprofits compliance data; Exempt internal filing records through Feb. 26, 2026.
The table makes the argument. You just need to start.
Nothing hidden. Every phase, open.
Other firms keep the process opaque. We show you every document, every IRS instruction, every step — before you sign anything.
The IRS reads your Articles of Incorporation first.
Before a single line of Form 1023 is drafted, we review and correct your state incorporation documents. The IRS begins every 501(c)(3) review by confirming that the articles contain the required purpose clause and dissolution clause — language that limits the organization to charitable purposes under section 501(c)(3). Most DIY incorporations are missing one or both.
- Purpose clause — limits operations to §501(c)(3) activities
- Dissolution clause — assets go to another exempt org on wind-up
- Board composition review — IRS conflict-of-interest standards
- State nonprofit corporation act compliance check
ARTICLE I — NAME. The name of the corporation is .
ARTICLE II — PURPOSE. This corporation is organized exclusively for charitable, educational, religious, or scientific purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code"), or the corresponding section of any future federal tax code.
← IRS REVIEW BEGINS HERE. This clause must appear verbatim.
ARTICLE III — DISSOLUTION. Upon the dissolution of this corporation, assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by the Court of Common Pleas of the county in which the principal office of the corporation is then located, exclusively for such purposes.
← DISSOLUTION CLAUSE. Missing in ~40% of DIY incorporations.
ARTICLE IV — DIRECTORS. The initial board of directors shall consist of members. The names and addresses of the persons who are to serve as directors until the first annual meeting are: .
is a nonprofit corporation organized to . The organization will accomplish its mission through the following programs:
Program 1 — : The organization will provide to in . Activities include: . This program directly furthers the organization's charitable purpose by .
← SPECIFICITY IS EVERYTHING. Vague narratives are the #1 cause of IRS follow-up letters.
Anticipated beneficiaries: per year. Geographic scope: . Revenue sources: .
Compensation: The organization has paid staff. Compensation for was determined by the board through a comparability review in accordance with Treasury Regulation 53.4958-6.
← COMPENSATION DISCLOSURE. Omitting this triggers automatic IRS scrutiny.
A 29-page form that becomes 50–100 pages of evidence.
Form 1023 is a comprehensive examination of your organization's structure, programs, governance, and finances. Most denials come from vague narratives — generic language lifted from websites that doesn't reflect actual operations. We write every narrative from scratch, specific to your organization.
- Activity narrative written to IRS review standards
- Financial projections reviewed for public support threshold
- Required schedules identified (A through H)
- Bylaws reviewed against IRS conflict-of-interest requirements
- Single consolidated PDF assembled and reviewed before submission
The letter that makes donors' contributions deductible.
The IRS issues 80% of Form 1023 determinations within 191 days. When the letter arrives, it sets the compliance framework your organization will operate under for years. We are present for every IRS follow-up question — because 99.75% of our applications don't need them.
- →Donor deductibility — contributions become tax-deductible
- →Form 990 filing classification and schedule requirements
- →Public support calculation method (Schedule A)
- →Activities the organization may legally operate
- →Private foundation vs. public charity status
Dear :
We are pleased to inform you that upon review of your application for recognition of exemption, we have determined that you are exempt from Federal income tax under section 501(c)(3) of the Internal Revenue Code.
✓ APPROVED — 501(c)(3) PUBLIC CHARITY STATUS GRANTED
Contributions to your organization are deductible under section 170 of the Code. You are also qualified to receive tax deductible bequests, devises, transfers, or gifts under sections 2055, 2106, or 2522 of the Code.
You are required to file Form 990 annually. Your accounting period ends on . Your first return will be due on .
The determination letter is the beginning, not the end.
501(c)(3) status comes with annual obligations that most founders don't discover until they've already missed a deadline. We map the full compliance calendar before you leave our office.
Form 990
Every tax-exempt organization must file an annual Form 990. The version you file — 990-N, 990-EZ, or full 990 — depends on gross receipts. Miss three consecutive years and the IRS automatically revokes your exemption.
40 States Require Charitable Solicitation Registration
If your organization solicits donations in a state — even through a website — you may be required to register with that state's Attorney General before accepting a single dollar. Registration requirements vary by state and are renewed annually.
15-Month Filing Window
Form 1023 should be filed within 15 months of the organization's formation date. After 27 months, retroactivity of 501(c)(3) status is limited — donors' past contributions may not be deductible.
Board Meeting Calendar
Annual board meetings, conflict-of-interest policy acknowledgments, and written records of compensation decisions are required for ongoing compliance. The IRS checks these in any audit.
Form 990 Is Public Record
Your Form 990 — including officer compensation, program spending, and governance policies — is available to the public upon request and on GuideStar/Candid. We prepare it to present your mission compellingly, not just accurately.