How to Get 501(c)(3) Status for a Booster Club: 1023-EZ vs 1023

What 501(c)(3) Status Does

Section 501(c)(3) of the Internal Revenue Code exempts organizations organized and operated exclusively for charitable or educational purposes from federal income tax. Recognition means the club does not pay federal income tax on donations and related activities, donors who itemize can deduct their gifts, and the club appears in the IRS Tax Exempt Organization Search tool. State agencies rely on the letter too: Texas requires a copy with its Form AP-204, and California’s Form 3500A is based on it.

Recognition also brings obligations: an annual Form 990-series filing, no private benefit to officers or families, no participation in political campaigns, and only insubstantial lobbying.

Does a Small Club Have to Apply?

IRS Publication 557 says a 501(c)(3) organization (other than a private foundation) that normally has annual gross receiptsGross receiptsThe total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.All terms of not more than $5,000 is exempt automatically, without applying. “Normally” is defined by a test:

Such a club does not appear in Tax Exempt Organization Search and cannot obtain a written affirmation of exempt status, according to Publication 557. A club that exceeds the test must apply within 90 days after the end of the period in which it went over. A club with a concession stand and a few events can pass $7,500 in its first year, so a club that plans regular fundraising should apply.

Form 1023-EZ vs Form 1023

Processing figures come from the IRS “Where’s My Application” page, updated periodically. Fees are paid through Pay.gov by bank account or card at filing.

The Form 1023-EZ Eligibility Worksheet

The worksheet is at the end of the Instructions for Form 1023-EZ, and the club completes it before filing. A “Yes” to any of its 34 questions (January 2025 instructions) makes the club ineligible for Form 1023-EZ. The three that matter most for booster clubs:

1. Does the club project annual gross receiptsGross receiptsThe total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.All terms over $50,000 in any of the next 3 years?
2. Have annual gross receipts exceeded $50,000 in any of the past 3 years?
3. Does the club have total assets with a fair market value over $250,000?

Other questions screen out organizations formed abroad, LLCs, for-profit entities and their successors, churches, schools, hospitals, and supporting organizations. A booster club supports a school but is not itself a school. The treasurer keeps the completed worksheet in the permanent records.

Gross receipts are not profit. The IRS defines gross receipts as the total amounts received from all sources during the year, without subtracting costs or expenses. A club with $35,000 in concession sales and $20,000 in donations has $55,000 in gross receipts, even if the concession stand cleared only $8,000 after buying food. That club is not eligible for Form 1023-EZ. Before answering question 1, the treasurer totals every expected dollar in: donations, sales, tickets, sponsorships, and dues.

Filing Form 1023-EZ Step by Step

1. Complete the eligibility worksheet and save it.
2. Confirm the articles contain the 501(c)(3) purpose clause and dissolution clause. See How to Incorporate a Booster Club.
3. Gather the EIN, legal name, address, formation date, fiscal year end, and the officers’ and directors’ names, titles, and addresses.
4. Draft the mission description (250 characters maximum) describing actual or planned activities, not repeating the articles. For example: “Raises funds and organizes volunteers to support the Lincoln High School band program, including instruments, uniforms, and travel to competitions.”
5. Choose the public charity classification (see below).
6. On Pay.gov, search for “1023-EZ” and complete the form. An authorized officer or director listed on the form signs, with title and date.
7. Pay the $275 user fee and save a PDF of the application. The club must make it available for public inspection.

The IRS selects a random sample of Form 1023-EZ applications for pre-determination review and may ask for documents, so the bylaws, minutes, and budget should be ready to send.

Choosing Public Charity Classification

Every 501(c)(3) organization is a private foundation unless it qualifies as a public charity. A booster club claims one of two public support classifications:

• Section 170(b)(1)(A)(vi): substantial support from contributions from the public, government, and other public charities; the general test is at least one-third public support. Fits a club funded mostly by donations.
• Section 509(a)(2): support from contributions, membership fees, and receipts from activities that further the exempt purpose, with a one-third support test and a not-more-than-one-third test for investment and unrelated business income. Often fits a club funded by event tickets and dues.

The Form 1023-EZ instructions include worksheets for both. A club that later files Form 990 or 990-EZ confirms its classification on Schedule A.

Filing the Full Form 1023

A club files Form 1023 when it fails the eligibility worksheet, usually because it expects more than $50,000 in annual gross receiptsGross receiptsThe total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.All terms, or when it has existed for more than 27 months and wants exemption dated back to formation. The full form asks for:

• The organizing document, amendments, and bylaws
• A narrative of past, present, and planned activities
• Compensation and conflict of interest information (the instructions include a sample policy)
• Financial data: a club under 1 year old provides the current year plus 2 years of projections; 1 to 5 years, 4 years total; 5 years or more, the 5 most recent years

Many clubs ask an accountant or attorney to review Form 1023, since an incomplete application can bring IRS follow-up questions and delay.

The 27-Month Rule

Under Publication 557 and the Form 1023-EZ instructions, if the club files within 27 months after the end of the month in which it was legally formed and the IRS approves, exemption is effective as of the formation date. If it files later, exemption generally starts on the submission date.

Example: a club whose articles were filed on September 15, 2026 has until December 31, 2028 to file and keep its formation date as the effective date (the end of September 2026 plus 27 months).

What the Determination Letter Means

The determination letter is the IRS’s written recognition that the club is exempt under 501(c)(3). The treasurer confirms that the legal name and EINEINEmployer Identification Number: the nine-digit federal tax identification number the IRS assigns to the club. The club needs it to open a bank account, apply for 501(c)(3) status, and file its annual return.All terms match the articles and bank account, the effective date is the formation date (if filed within 27 months), the public charity classification is the one requested, and the address is current.

The letter stays valid only if the club keeps complying. Donors can generally rely on it until the IRS publishes a change in status. The club loses exemption automatically if it fails to file a required Form 990, 990-EZForm 990-EZThe short annual return a tax-exempt club files with the IRS when its gross receipts are under $200,000 and its total assets are under $500,000, and it does not file Form 990-N. It reports revenue, expenses, the balance sheet, programs, and officers.All terms, or 990-N for three consecutive years. A club whose gross receiptsGross receiptsThe total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.All terms are normally $50,000 or less may file Form 990-NForm 990-NThe e-Postcard: the annual electronic notice a tax-exempt club files with the IRS when its gross receipts are normally $50,000 or less. It is due the 15th day of the 5th month after the fiscal year ends.All terms, due the 15th day of the 5th month after the fiscal yearFiscal yearThe club’s 12-month accounting year, set in the bylaws. Many booster clubs use July 1 through June 30 to match the school year, and the club’s filing deadlines count from the day it ends.All terms ends (November 15 for a June 30 year end). See Which Form 990 a Booster Club Files.

The secretary stores the letter and a copy of the application in the permanent records, and the club makes both available to anyone who asks. See Public Disclosure Requirements.