An IRS Determination Letter is the official written recognition from the Internal Revenue Service that your organization qualifies as tax-exempt under section 501(c)(3) (or another applicable section) of the Internal Revenue Code.
This letter confirms:
✅ Your nonprofit’s tax-exempt status
✅ Donations to your organization may be tax-deductible
✅ You can access certain grants and funding opportunities
It’s essentially the IRS saying: “You’re approved.”
Why Is the IRS Determination Letter Important?
Think of it as your nonprofit’s tax-exempt birth certificate. It’s crucial for:
🏦 Opening a nonprofit bank account
🤝 Applying for government or private grants
💵 Reassuring donors that their gifts are tax-deductible
🧾 Filing tax returns with IRS Form 990
📄 State-level exemptions (sales tax, property tax, etc.)
Without it, your organization might be operating in legal limbo—lacking the trust and benefits that come with official 501(c)(3) status.
What Information Is Included in the Determination Letter?
Your IRS Determination Letter typically includes:
🏷 Your organization’s legal name
🔢 Employer Identification Number (EIN)
📅 Date of tax-exempt status recognition
📚 The section of the tax code (usually 501(c)(3)) under which you’re approved
💡 Instructions for filing annual information returns (Form 990 series)
How Do You Get an IRS Determination Letter?
To receive this letter, your nonprofit must apply for tax-exempt status through the IRS. The process includes:
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Filing Form 1023 or Form 1023-EZ
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Form 1023 = Full application (for larger orgs)
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Form 1023-EZ = Streamlined application (for smaller orgs)
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Submitting required documents
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Bylaws, Articles of Incorporation, EIN, etc.
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Paying the application fee
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Waiting for IRS review (this can take weeks to months)
Once approved, you’ll receive your IRS Determination Letter in the mail—and often digitally as well.
Can You Lose Your Determination Letter?
Yes. Your nonprofit must follow IRS rules to maintain your tax-exempt status. You can lose it if:
❌ You fail to file Form 990 for 3 consecutive years
❌ You engage in political campaigning or excessive lobbying
❌ You use funds for private benefit or non-charitable purposes
If revoked, you must reapply for tax-exempt status—and wait for a new Determination Letter.
How to Verify an Organization’s IRS Status
Donors, grantmakers, and partners often want proof of your 501(c)(3) status. You can:
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🧾 Share your IRS Determination Letter directly
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🔍 Point them to the IRS Tax Exempt Organization Search
Pro Tip: Keep Your Determination Letter Safe!
Make multiple digital and physical copies. You’ll need it often. Store it with other critical documents like:
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Articles of Incorporation
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Bylaws
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EIN Letter from the IRS
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Form 990 filings
📁 Pro tip: Upload it to your board portal, accountant files, and grant documents folder.
