Filing Instructions for Tax-exempt / Non-Profit Status

First-Time Filer

NAPS Branch:

Individual NAPS Branches have organized to become Tax-Exempt and Non-Profit organizations. To assist other NAPS branches that have not taken advantage of Tax-Exempt and/or non-profit status in accordance with the federal IRS, the information below should be able to explain and assist your branch in this effort. For IRS help on specifically for non-profit questions and information call the IRS Customer Service number at 1-877-829-5500, Option 2, and then Option 4.

Please be advised that NAPS HQ is not providing tax advice, but general suggestions on the IRS forms to complete and additional documentation to provide and mail to the IRS to request tax-exempt/non-profit status.

  1. Request an Employer Identification Number (EIN) if branch does not already have one. EIN’s may be requested via website.
  • An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online. This is a free service offered by the Internal Revenue Service. You must check with your state to make sure you need a state number or charter.
  • The simplest way to get an EIN for your Branch is to go on-line and request an EIN from the IRS website at In the IRS “search” type EIN SS4. Follow the instructions to apply on-line for your Branch EIN. To receive an EIN by mail, complete an IRS SS-4 Application and mail to the respective address below. The IRS SS-4 Form is posted on the NAPS website.
  • To complete a manual SS-4, the IRS estimates that preparing the form will take approximately 60 minutes or less. On-line should be much quicker, and you get your EIN quicker.
  • If you do a manual SS-4, Item 9a of the EIN SS-4, mark (x) “other nonprofit organization (specify) > 501c(5). On Item 10 “Reason for applying, mark (x) Other (specify)> Management Association
  1. Complete IRS Form 1024(IRS Form 1024 Template & Instructions posted on IRS Form 1024 is approximately 18 pages long. However, a branch, Large & Small, needs only to complete Pages 1-5 and Schedule C on page 9 of Form 1024. However, you MUST mail in the entire 18 pages to the IRS. Posted on the NAPS website is an IRS Form 1024 Template which NAPS HQ has partially completed for your assistance. The NAPS IRS Form 1024 template has been reviewed by our accountants and attorney with regard to specific wording for various questions. Please follow the steps below to finalize your Branch’s IRS Form 1024 for requesting tax-exempt/non-profit status or to request reinstatement of your tax-exempt/non-profit status.

Step-by-Step Form 1024 completion:

  • Form 1024-Page 1: Complete all related questions regarding your branch including contact information. Do not change the check mark in Part 1(c),Section 501(c)(5)—Labor, agricultural, or horticultural organizations. If your branch is filing for the first time, do not change the answers or check marks on Questions 1e, 6, 7 or 8c. These are default answers, unless your branch can answer question(s) 6 and 7 as “Yes”. In that case, change the answer(s) and provide the appropriate documentation when you file the 1024 Form. In addition, if your branch has been incorporated change the default answer to 8a and follow the instructions to provide a copy of Articles of Incorporation.If you do not know the answer to Question 5 – Date formed, contact NAPS HQ. Sign and date page 1 of Form 1024 after you have accurately and truthfully completed all questions.
  • Form 1024-Page 2:Part II, Questions 1 & 2 – This is standard language for the average NAPS branch. If the type of activities by your branch is not accurate to the language presented, you should change it to reflect your actual branch. However, if your branch agrees with the language presented by NAPS, then do not make any changes to page 2.
  • Form 1024-Page 3:Part II, Section 3a. Replace the example information with actual branch officer information. List all elected branch officers in Section 3a. If your branch does not pay your officers compensation (i.e. stipend, gratuity, etc.) for work performed, enter $0.00 in Part II, Section bAnnual Compensation for each officer. However, if your branch is providing officers(i.e. President, Secretary, Treasurer, etc.) with an annual compensation including what the branch may call a stipend or gratuity most likely the IRS will consider this annual compensation and the amounts should be entered in Part II, Section b.

If the branch provides annual compensation to reimburse an officer for incidental association business expenses that the officer(s) incurwhen using their own personal resources; such cell phone, internet, personal computer, printer ink, paper, parking, tips, mileage meals, etc., toperform association work, but these expenses are difficult to quantify; these funds should not be considered or titled annual compensation, but reimbursement of association expenses.

If the Branch’s Constitution & Bylaws references providing annual compensation, stipends or gratuities to branch officers but it is not clearly stated that these monies are for the reimbursement of incidental association expenses of officers then the branch would need to report the amounts on the IRS Form 1024 as Officer Annual Compensation. If the monies are for incidental reimbursement of association expenses to the officers then all references to officer “compensation/stipends/gratuities” should be deleted completely from the Branch Constitution & Bylaws and replaced with a statement(s) that clearly state the monies are for reimbursement of incidental association expenses. This will apply to all members who may receive such incidental reimbursements for attending LTS, conventions, NAPS Area training. If you are unsure of this issue, call the IRS for clarification.

  • Form 1024-Page 3:Part II Questions 4-8. If any of the answers for questions 4, 5, 6, 7, or 8 on page 3 are “yes”, change the default answer from “no” to “yes” and complete the rest of question.
  • Form 1024-Page 4: Leave all the questions 9-16 marked “No”. Unless, your branch has a newsletter then change question 16 to “Yes” and submit a copy of the newsletter with your all your documentation to the IRS.
  • Form 1024-Page 5: Financial information is critical. Column A is your financial data year-to-date (YTD) for your branches specific Fiscal Year (FY). NAPS made the Column A date default to start on 1/1/2011. Make sure you put the correct starting date of your branch’s FY and the actual date used to complete your YTD totals.
  • Form 1024-Page 5: Columns B, C and D are the three previous financial reports. Make sure the numbers add correctly down and across to Column E. Most branches will have membership dues for Line 1; Investment (bank interest) income Line 6; and Other Income—raffles/dances Line 7. When the form asks to “attach schedule” it is best to provide a Revenue and Expense Statement for the current and previous three (3) years. You may also list the information on a separate page referencing the line number, the activity and amount received. (See IRS Form 1024 Instructions)
  • Form 1024-Page 5: Statement of Revenue & Expenses Line 13 Compensation of Officers, directors, and trustees. Be advised that if you entered annual compensation on Page 3, Part II, 3b you mustalso enter the total amount on Line 13 with a list of who was compensated. However, you may have additional compensation on this line if you voted to give more compensation to officers. Again review the section above -- Form 1024-Page 3:Part II, Section 3a to determine if the monies given to officers are actual compensation or reimbursement of incidental association expenses. The IRS receives a copy of the Branch Constitution & Bylaws and can check the compensation issue. Record correctly.
  • Form 1024-Page 5: Section B Balance Sheet -- This information is straight forward. Line 1- Cash on hand/check and bank accounts. Line 7 Other investments (bank CDs, Money Market Fund, etc.).Usually a branch does not have any liabilities so “Total Liabilities” should be zero ($0.00). If that is the case, Total Assets Line 11, be the same as Line 17 and Line 18 of this section.
  • Form 1024-Page 9: Schedule C -- Do not change any information that has been entered on Schedule C Questions #1. Leave question 2 blank and Question 3 is “No”- do not change.
  1. Complete Form 8718: User Fee for Exempt Organization Determination Letter Request. A branch requesting tax-exempt/non-profit status for the first time must complete IRS Form 8718User Fee for Exempt Organization Determination Letter Request. Form 8718 and its respective fee must be submitted to the IRS along with your branch’s completed IRS Form 1024 and all other required documentation. The fee will either be $400 or $850 depending on the branch’s total annual receipts. Make sure you complete your branch name and EIN information and sign the 8718Form. A sample Form 8718 is on the NAPS website for your branch to modify to your specific branch information. In addition, the IRS mailing address to mail Form 8718 and Form 1024 with ALL required documents to the IRS requesting tax-exempt/non-profit status is below and can be found on IRS Form 8718.

Internal Revenue Service

PO Box 12192

Covington KY 41012-0192.

You will not have a Determination Letter to submit as referenced on the 8718. The IRS will send you a Determination Letter after they receive your application. Read the Determination Letter carefully, it may require two (2) officer signatures.

  1. Submit a copy of your Branch Constitution & Bylaws with application request
  2. Submit two (2) recent branch meeting minutes with application request.

Please ensure you mail ALL the following information/documentation to the Internal Revenue Service to the address referenced above when requesting tax-exempt/non-profit status. Mail:

  • Completed IRS Form 1024, signed and dated by an officer of the organization
  • Completed IRS Form 8718 User Fee for Exempt Organization Determination Letter Request
  • Check or Money Order for User Feemade payable to: United States Treasury
  • Copy of Branch current Constitution & Bylaws signed and dated by two branch officers
  • Copy of your Branch Articles of Incorporation (If applicable)
  • Copies of Branch Revenue & Expense Statements for the current FY & past three (3) years.
  • Copy of meetings minutes from two recent branch meetings
  • Copy of Branch newsletter (If applicable)

Below is a more detailed Final Procedural Checklist that was modified from IRS Form 1024’s last page.

Final Procedural Checklist

Make sure the application is complete.If you do not complete all applicable parts or do not provide all required attachments, the IRS may return the incomplete application for the organization to resubmit with the missing information or attachments. This will delay the processing of the application and may delay the effective date of your organization’s exempt status. The organization may also incur additional user fees. Have you . . .

  • Attached Form 8718 (User Fee for Exempt Organization Determination Letter Request) and the appropriate fee?
  • Prepared the application for mailing? (See Where To File addresses in Form 8718.)
  • Completed all Parts and Schedules that apply to the organization?
  • Shown your organization’s Employer Identification Number (EIN)?

a. If your organization has an EIN, write it in the space provided.

b. If this is a newly formed organization and does not have an Employer Identification Number, obtain an EIN by telephone. (See Specific Instructions, Part I, Line 2, on page 2.)

  • If applicable, described your organization’s specific activities as directed in Part II, question 1 of the application?
  • Included a conformed copy of the complete organizing instrument? (Part I, question 8 of the application. I.E. Articles of Incorporation or Constitution & Bylaws-signed and dated by two branch officers.
  • Had the application been signed by an officer or trustee of the branch who is authorized to sign (e.g., president, treasurer)
  • If applicable, enclosed financial statements (Part III)?
  1. Current year (must include period up to within 60 days of the date the application is filed) and 3 preceding years. See page 5 of Form 1024 for total roll-ups.
  1. Provide supporting detailed breakdown of revenue and expenses (Income & Expense Statement) for the current and past 3-years.
  1. If the organization has been in existence less than 1 year, it must also submit proposed budgets for 2 years showing the amounts and types of receipts and expenditures anticipated.

During the technical review of a completed application, it may be necessary for the IRS to contact the organization for more specific or additional information.

NAPS NOTE:Be advised, that the information provided in this NAPS HQ document is for convenience and information sharing only. It is not meant to be tax advice. NAPS suggests you review the IRS website at for more detailed information regarding the process to file for tax-exempt/non-profit status, including clarification on any questions you may have. NAPS further suggests you seek professional tax assistance if you other questions or concerns regarding this matter.

Do not send this document & checklist with the IRS application. FYI Only.