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officer, or manager, may benefit

longer exists and that had purpose(s)

current year and proposed budgets for the

personally from a decision he or she could

similar to your purpose(s).

following 2 years.

make. Adoption of a conflict of interest

Any applicant that has been in

Line 4. Indicate your organization’s

policy is not required to obtain tax-exempt

existence more than 1 year but seeks

current or planned connection with any

status. However, by adopting a policy, you

recognition of exemption only for the

tax-exempt or nonexempt organization.

will be choosing to put in place procedures

current year and future years (rather than

that will help you avoid the possibility that

Line 5. If your organization is a

from the date of its formation), should give

those in positions of authority may receive

membership organization, submit the

financial data for the current year and

requested information.

an inappropriate benefit.

proposed budgets for the following 2

“Reasonable compensation” is the

years.

Line 6. Indicate if the organization

amount that would ordinarily be paid for

distributes, or plans to distribute, any of its

We may request financial data for more

like services by like organizations under

property or funds (such as a distribution of

than 3 years if necessary.

like circumstances as of the date the

profits) to its shareholders or members.

compensation arrangement is made.

All financial information for the current

Line 7. Indicate if the organization

Establishing and documenting reasonable

year must cover the period beginning on

performs any services for any other

compensation is important because

the first day of the organization's

organization or individual for which it

excessive compensation may result in

established annual accounting period and

received a fee.

excise taxes on both the individual and the

ending on any day that is within 60 days of

organization. In addition, this may

the date of this application.

Line 8. Provide the specified information

jeopardize the organization’s tax

about leased property whether it is used

If the date of this application is less

exemption.

for exempt functions or for other purposes.

than 60 days after the first day of the

current accounting period, no financial

Line 3c. A “fixed payment” means a

Line 9. Answer “Yes” if the organization is

information is required for the current year.

payment that is either a set dollar amount

a membership organization formed to own

or fixed through a specific formula where

and maintain common green areas,

Financial information is required for the

the amount doesn’t depend on discretion.

streets, and sidewalks and to enforce

2 preceding years regardless of the

For example, a base salary of $200,000

covenants to preserve the appearance of

current year requirements.

that is adjusted annually based on the

the development.

increase in the Consumer Price Index is a

Note. If no financial information is

Line 10. Answer “Yes” if the

fixed payment.

required for the current year, the

organization’s membership is limited to

preceding year's financial information can

A “non-fixed payment” means a

employees of a designated person or

payment that depends on discretion. For

end on any day that is within 60 days of

persons in a particular municipality and

example, a bonus of up to $100,000 that is

the date of this application.

whose net earnings will be devoted

based on an evaluation of performance by

Prepare the statements using the

exclusively to charitable, educational, or

the governing board is a non-fixed

method of accounting and the accounting

recreational purposes.

payment because the governing body has

period the organization uses in keeping its

Line 11. A “foreign country” is a country

discretion over whether the bonus is paid

books and records.

other than the United States, its territories

and the amount of the bonus.

If the organization uses a method other

and possessions, and the District of

Part V. Your Specific Activities

than the cash receipts and disbursements

Columbia.

method, attach a statement explaining the

In describing your grants or activities,

Line 1. Provide the specified information

method used.

include the answers to the following

about political expenditures whether they

A. Statement of Revenue and

questions.

were made to support or to oppose

In which countries do you plan to make

Expenses

particular candidates.

grants or conduct activities?

Line 2. If your organization (including any

What practices and procedures do you

Line 1. Include funds or other items of

predecessor organization) lost its section

have in place to ensure that foreign

value that you receive as gifts, grants, or

501(c)(3) status due to carrying on

expenditures or grants are not diverted to

contributions.

propaganda or otherwise attempting to

support terrorism or other non-exempt

Line 2. Include amounts received from

influence legislation or due to participating

activities?

members to provide support to the

in, or intervening in, any political campaign

If you plan to distribute funds or goods,

organization. Do not include payments

on behalf of (or in opposition to) any

what funds or goods have been or will be

from members or on behalf of members to

candidate for public office, then your

distributed and for what purposes?

purchase admissions, merchandise,

organization will not be treated as an

How do you process grant requests,

services, or use of facilities.

organization described in section 501(c)

including your application, review, and

(4). This rule will not apply if your

approval process for the grant requests

Line 3. Include gross income from

organization was a church or

you receive?

dividends, interest, payments received on

church-affiliated organization described in

How do you ensure the funds or goods

securities, loans, rents, and royalties that

section 501(h)(5) in the tax year

are used for the intended purposes?

are held for investment purposes.

immediately preceding the tax year in

Part VI. Financial Data

Line 4. Net income from unrelated

which section 501(c)(3) status was lost.

business activities generally includes

The Statement of Revenue and Expenses

Line 3. You are a “successor” if you have:

income from any trade or business activity

must be completed for the current year

Substantially taken over all of the

that is regularly carried on, not conducted

and each of the 2 years immediately

assets or activities of another

with substantially all (at least 85%)

before it (or the years the organization has

organization;

volunteer labor, and not related to your

existed, if less than 3).

Been converted or merged from

exempt purposes. (This amount can be

another organization; or

Any applicant that has existed for less

taken from Form 990-T, if filed.)

Installed the same officers, directors, or

than 1 year must give financial data for the

See Pub. 598 for additional information

trustees as another organization that no

regarding unrelated business income.

Instructions for Form 1024-A

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Instructions For Form 1024-A - Application For Recognition Of Exemption Under Section 501(C)(4) Of The Internal Revenue Code Page 4

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