Fill in a Valid Application Exemption Template

Fill in a Valid Application Exemption Template

Application Exemption Example

File Breakdown

Guide to Using Application Exemption

Get Answers on Application Exemption

Common mistakes

Documents used along the form

Similar forms

Dos and Don'ts

Misconceptions

Key takeaways

Application Exemption Example

File Breakdown

Guide to Using Application Exemption

Get Answers on Application Exemption

Common mistakes

Documents used along the form

Similar forms

Dos and Don'ts

Misconceptions

Key takeaways

What is the Application Exemption form?

Who needs to file the Application Exemption form?

What information is required on the form?

What happens if I do not provide the required documents?

How should the completed form be submitted?

Can an organization apply for group exemption?

What if the organization’s tax-exempt status has been revoked?

What is the primary purpose of providing financial data on the form?

What should be included in the narrative of activities section?

The Application Exemption form is a crucial document used by organizations in California to request tax-exempt status. This form requires detailed information about the organization, its structure, and its planned activities to determine eligibility for exemption from certain taxes. Completing this form correctly is essential for ensuring that the organization's request is processed without delay or denial; click the button below to start filling it out.

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The Application Exemption form, known as California Form FTB 3500, is designed for organizations seeking to obtain tax-exempt status in California. This comprehensive form requires detailed information about the organization, including its structure, activities, and financial data. Applicants must provide their organization’s legal name, address, and identification numbers, and outline the nature of their activities while indicating whether they operate as a corporation, trust, or limited liability company. Additionally, the form asks pertinent questions regarding previous tax-exempt status, fund-raising activities, and whether the organization plans to participate in various types of charitable work. It is critical to provide all requested documentation; failure to do so may result in delays or denial of the exemption request. The application process requires signatures from authorized representatives, affirming the accuracy of the provided information. Overall, the Form FTB 3500 acts as a gateway for organizations dedicated to serving their communities while seeking financial relief through tax exemptions.

							CALIFORNIA FORM
							CALIFORNIA FORM
Exemption Application						3500
Exemption Application						3500

Organization Information
California corporation number/California Secretary of State file number			FEIN

Name of organization as shown in the organization’s creating document				Web address

Street address (suite, room, or PMB no.)

City				State	ZIP code

Telephone		Second telephone		Fax

Representative Information
Name of representative				Email address

Street address (suite, room, or PMB no.)

City				State	ZIP code

Telephone		Second telephone		Fax

General Questions
Part I	Organizational Structure

If the listed documents are not provided, the organization’s request for exemption will be delayed, or denied . Copies are acceptable .

1	.Is this a foreign corporation?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.□. .Yes. . 1	□No
	See General Information F, Foreign Corporations .
2	Is this a trust?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2	□Yes	□No
	See General Information H, Trusts .
3	Is this a limited liability company (LLC)?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.□. Yes. . .	□. .No
	See General Information I, Limited Liability Companies .

a Is the parent organization a nonprofit organization? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. .Yes. . .□. No. . . . . . .

If “Yes,” enter parent’s employer identification number (EIN) ___________________

If “No,” STOP, the LLC does not qualify for California tax-exempt status .

4 Are you currently tax-exempt with the Internal Revenue Service? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No. . . . . . .

5 Are you applying for group exemption? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. . Yes. . . . □. 5No See General Information L, Group Exemption .

Mail form FTB 3500 to: EXEMPT ORGANIZATIONS UNIT MS F120, FRANCHISE TAX BOARD, PO BOX 1286, RANCHO CORDOVA, CA 95741-1286 .

Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete.

DATE

SIGNATURE OF OFFICER OR REPRESENTATIVE

TITLE

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FTB 3500 2021 Side 1

If “No,” explain why the organization is not planning any activities .

Organization name: __________________________

Corp number/CA SOS file number:

Part II Narrative of Activities

Was the organization’s California tax-exempt status previously revoked?

. . . . . . . . . . . . . . . . . . . . .

. . . . . . .

. . □. Yes. .

.□. No. . . . . 1

If “No,” the organization may qualify to file form FTB 3500A, Submission of Exemption Request . For more information, get form FTB 3500A .

Enter the California Revenue and Taxation Code (R&TC) section that best fits the organization’s purpose/activity

See the Exempt Classification Chart on page 6

. . . . . . . . . . . . . . . . . . . . .

. . R&TC. . . . Section. . . . 23701. . . .

. . 2

Enter the date the organization formed

. . . . . . . . . . . . . . . . . . . . .

. . . . . ./ .

. .

. / . .

. . . . . . 3

mm /

yyyy

4What is the organization’s annual accounting period ending?

(must end on the last day of the calendar or fiscal year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 . . . . . / . . . . . . . . .

mm / dd

5What is the primary purpose of the organization?

Side 2 FTB 3500 2021

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Organization name: __________________________	Corp number/CA SOS file number:

Part II Narrative of Activities (continued)

7Describe the organization’s past, present, and planned activities below. Do not merely refer to or repeat the language in the organizational document . List each activity separately, in the order of importance based on the relative time and other resources devoted to the activity. Indicate the percentage of time for each activity. Each description should include a:

a Detailed description of the activity, including its purpose and how it furthers the organization’s exempt purpose . b Detailed description of when the activity was or will be initiated .

c Detailed description of where and by whom the activity will be conducted .

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FTB 3500 2021 Side 3


Organization name: __________________________	Corp number/CA SOS file number:

Part III Financial Data

1a Has the organization filed the Form 199, California Exempt Organization Annual Information Return, for the current

and prior years?	1a □Yes	□No
b Has the organization filed the FTB 199N, California e-Postcard, for the current and prior years?	. . . □1bYes	□No

We will review information reported on previously filed Form 199 to determine exemption eligibility. If the FTB 199Ns were filed or no returns were filed, attach a detailed income and expense statement for the current year and three previous years . If you are not yet active, attach a proposed budget covering the next four years .

Part IV Officers, Directors, and Trustees

1List names, titles, and mailing addresses of all officers, directors, and trustees whether or not compensation is or will be paid . For each person listed, state their total annual compensation, or proposed compensation, for all services to the organization, whether as an officer, employee, or other position . Use actual figures, if available . Enter “none” if no compensation is or will be paid . If additional space is needed, attach a separate sheet .

Name

Title

Mailing Address

Compensation Amount (annual actual or estimated)

2Will any incorporator, founder, board member or other person(s) or entity:

a Share any facilities with the organization?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. a.

. □. Yes. .

. .□. No

b Rent, sell, or transfer property to this organization?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

□Yes

□No

c Be compensated for services other than performing as a board member or employee?

□Yes

□No

Part V

History

. . . . .

1 Has the organization been issued any previous California ID number?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .□. Yes. .

. □. .No.

Was this organization’s exemption previously revoked by the Internal Revenue Service?

. □. .Yes. .

. □. No. . 2

If “Yes,” enter date revoked

yyyy

Part VI

Fund Raising

Does or will the organization participate in fund-raising activities? . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

. .□. .Yes. □. 1No. .

If “Yes,” check all the fund-raising programs the organization conducts, or will conduct .

□ Mail solicitations

□ Phone solicitations

□ Email solicitations

□ Accept donations on the organization’s website

□ Personal solicitations

□ Receive donations from another organization’s website

□ Vehicle, boat, plane, or similar donations

□ Government grant solicitations

□ Foundation grant solicitations

□ Other - Attach description

Side 4 FTB 3500 2021

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Organization name: __________________________		Corp number/CA SOS file number:

Part VII Specific Activities

1	Does the organization conduct any gaming activities (bingo, raffles, etc .) .	. . . . . . . . . . . . . . . . . . . . . . .	. . .	. . . . . . . . .		.	. .	.	. .	.		1 □Yes □No

2	Does the organization lease property from others?	. . . . . . . . . . . . . . . . . .	. .	. . . . .	. . .	.	.	.	.	. .		. . .□. Yes. . . .	□. . No. 2
	If “Yes,” attach copy of lease agreement .

3	Does the organization lease property to others?	. . . . . . . . . . . . . . . . . . . . . . .				.	.	.	.	.	.	. . □. Yes. . .	.□. No
	If “Yes,” attach copy of lease agreement .

4	Does or will the organization publish, sell, or distribute any literature? . . .	. . . . . . . . . . . . . . . . . . . . . .	. . .	. . . . . .	. . .	.	. .	.	. .	.	.	4 □Yes	□No

5	Does or will the organization own, or have rights in music, literature, tapes, artworks, choreography, scientific discoveries,											. . □. Yes. . .	.□. No
	or other intellectual property?	. . . . . . . . . . . . . . . . . . . . . . .				.	.	.	.	.	.	. . □. Yes. . .	.□. No

6Does or will the organization accept contributions of real property, conservation easements, closely held securities, intellectual

property such as patents, trademarks, and copyrights, works of music or art licenses, royalties, automobiles, boats, planes, or

other vehicles, or collectibles of any type? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No. . . . . . .

7Does or will the organization operate outside of the United States? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. Yes. . . □. .No. . . . . . .

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FTB 3500 2021 Side 5

Organization name: __________________________

Corp number/CA SOS file number:

Schedule 1

Section A R&TC Section 23701a – Labor, agricultural, or horticultural organization

1 Are any services to be performed for members? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. . .□. Yes. . . . □. . No If “Yes,” explain .

2	Is the organization formed as a cooperative?
	If “Yes,” provide a copy of the federal exemption letter showing exemption under IRC Section 501(c)(5)	2 □Yes □No

Section B R&TC Section 23701b – Fraternal societies, orders, or associations, etc. (Lodge system with benefits)

Operating under the lodge system means carrying on activities under a form of organization that comprises local branches called lodges, chapters, or the like, that are largely self-governing and chartered by a parent organization .

1 Is the organization a college fraternity or sorority or a chapter of a college fraternity or sorority? . . . . . . . . . . . . . . . . . . . . . . . 1 □Yes □No

If “Yes,” college fraternities and sororities generally qualify as organizations described in R&TC Section 23701g .

For more information, get FTB Pub 1077, Guidelines for Social and Recreational Organizations . If R&TC Section 23701g appears to apply, do not complete Section B . Go to Section G on Schedule 3, Social and recreational organization .

2Does the organization operate, or plan to operate under the lodge system or for the exclusive benefit of the members of

	the lodge system?	. . . . . 2	□Yes	□No

3	Is the organization a subordinate of a national or state level organization?	. . . . 3.	. □. .Yes. .	. □. No
	If “Yes,” attach a certificate signed by the secretary of the parent organization certifying that the subordinate is a duly
	constituted body operating under the jurisdiction of the parent body.

4	Is the organization a parent or grand lodge?	. . . . . 4	□Yes	□No

5Describe the types of benefits (life, sick, accident, or other benefits) paid, or to be paid, to members .

Section L R&TC Section 23701l – Fraternal beneficiary societies, orders, or associations, etc. (Lodge system with no benefits)

Operating under the lodge system means carrying on activities under a form of organization that comprises local branches (called lodges, chapters, or the like) that are largely self-governing and chartered by a parent organization .

1 Is the organization a college fraternity or sorority, or a chapter of a college fraternity or sorority? . . . . . . . . . . . . . . . 1. . □. .Yes. . . □No

If “Yes,” college fraternities and sororities generally qualify as organizations described in R&TC Section 23701g .

For more information, get FTB Pub 1077, Guidelines for Social and Recreational Organizations . If R&TC Section 23701g appears to apply, do not complete Section L . Go to Section G on Schedule 3, Social and recreational organization .

2Does the organization operate or plan to operate under the lodge system or for the exclusive benefit of the members of

	a lodge system?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. .	.□. .Yes. . .	□No

3	Is the organization a subordinate of a national or state level organization?	. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.	. □. .Yes. . . □. No

4	Is the organization a parent or grand lodge?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4	□Yes	□No

Side 6 FTB 3500 2021

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Organization name: __________________________	Corp number/CA SOS file number:

Schedule 2

Section D R&TC Section 23701d – Religious, charitable, scientific, literary, or educational organization

1Check the box(es) below that best describes the organization .

□ Charitable	□ Educational	□ Credit Counseling
□ Synagogue	□ School	□ Testing for public safety
□ Church	□ Literary	□ Hospital, Medical Center
□ Temple	□ Scientific	□ Qualified sports organization
□ Mosque	□ Religious	□ Prevent cruelty to children or animals

2Has the organization received or expect to receive 10% or more of its assets from any organization or group of affiliated organizations (affiliated through stockholding, common ownership, or otherwise), any individuals, or members of a family

	group (brother or sister whether whole or half blood, spouse/RDP, ancestor or lineal descendant)?	2	□Yes	□No

3	Does the organization attempt to influence legislation?	3. . .	□. Yes. . . .	□. . No

4Does the organization support or oppose candidates in political campaigns in any way? . . . . . . . . . . . . . . . . . . . . 4. . □. Yes. . . .□. No.

5Does the organization hold, or plan to hold, 10% or more of any class of stock or 10% or more of the total combined

	voting power of stock in any corporation?		. 5. .	.□. .Yes.	□No

6	a	Does the organization operate as a church, mosque, synagogue, or temple?	.6a. .	.□. .Yes	□No
		If “Yes,” complete Schedule 2A, Churches .
	b	Is the organization’s main function to provide hospital or medical care?	6b	□Yes	□No
		If “Yes,” complete Schedule 2B, Hospitals .
	c	Is the organization a credit counseling organization?	6c	□Yes	□No
		If “Yes,” complete Schedule 2C, Credit Counseling Organizations .

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FTB 3500 2021 Side 7

Organization name: __________________________

Corp number/CA SOS file number:

Schedule 2A – Churches

Complete Schedule 2A only if the organization answered “Yes” to Specific Section D, Question 6a .

1Check the box that best describes the organization .

	□Church □Mosque □Synagogue	□Temple
2	Has a place of worship been established?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No
	If “Yes,” at what address? Who is the legal owner of the property? Other property use?
	If “No,” explain where religious services are held .

3 Does the organization have a regular congregation or conduct religious services on a regular basis?. . . . . . . . . . . . . . . . . . . . 3 □Yes □No If “Yes,” how many usually attend the regular worship services? How often are religious services held?

If “No,” explain .

4Explain the background and training of the religious leaders .

5Will income be received from incorporators, ministers, officers, directors, or their families? . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No5 If “Yes,” explain, including dollar amounts received .


6	Will any founder, member, or officer take a vow of poverty? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. Yes. . . □. .No
	If “Yes,” explain .

7Will any founder, member, or officer transfer personal assets to this organization, like a home, automobile, furnishings,

business, or recreational assets, etc ., that will be made available for the personal use of the donors? . . . . . . . . . . . . . . . □. .Yes. . 7□No If “Yes,” explain .

Side 8 FTB 3500 2021

Schedule 2A Churches continued

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Organization name: __________________________	Corp number/CA SOS file number:

Schedule 2A – Churches (continued)

8Will any founder, member, or officer assign or donate income to the organization that will be used to pay their own personal salary, living allowance, or that will result in any other personal benefit (such as food, medical expenses, clothing,

	insurance, etc .)?	8 □Yes □No
	If “Yes,” explain .

9	Does the organization have a written creed, statement of faith, or summary of beliefs?	9 □Yes □No
	If “Yes,” explain .

10	Do the religious leaders conduct baptisms, weddings, funerals, etc .?	10. . . .□Yes □No
	If “Yes,” explain .

11	Does the organization ordain, commission, or license ministers or religious leaders?	11 □Yes □No
	If “Yes,” describe .

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FTB 3500 2021 Side 9

Organization name: __________________________

Corp number/CA SOS file number:

Schedule 2B – Hospitals

Complete Schedule 2B only if the organization answered “Yes” to Specific Section D, Question 6b . Attach a statement to explain any answers .

1	Are all the doctors in the community eligible for staff privileges?	1 □Yes □No
	If “No,” give the reasons why and explain how the medical staff is selected .

2a Does or will the organization provide medical services to all individuals in the community who can pay for themselves

or have private health insurance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a. . . □. Yes. . . □. .No. . . . . . .

If “No,” explain .

bDoes or will the organization provide medical services to all individuals in the community who participate in

Medicare? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No. . . . . . .

If “No,” explain .

3a Does or will the organization require persons covered by Medicare or Medicaid to pay a deposit before receiving

		services?	3a	□Yes	□No
		If “Yes,” explain .
	b Does the same deposit requirement, if any, apply to all other patients?		3b	□Yes	□No
		If “No,” explain .
4	a	Does or will the organization maintain a full-time emergency room?	4a	□Yes	□No
		If “No,” explain why the organization does not maintain a full-time emergency room . Also, describe any emergency
		services provided .
	b	Does the organization have a policy on providing emergency services to persons without apparent means to pay? . . . .	4b. .	□Yes	□No
		If “Yes,” provide a copy of the policy.

cDoes the organization have any arrangements with police, fire, and voluntary ambulance services for the delivery

		or admission of emergency cases?	. . .	.□. Yes. . 4c □No
		If “Yes,” describe the arrangements, including whether they are written or oral agreements . If written, submit copies of
		all such agreements .
5	a	Does the organization provide for a portion of the organization’s services and facilities to be used for charity patients? . . .	5a	□Yes	□No
		If “Yes,” answer question 5b through question 5e .
	b	Explain the organization’s policy regarding charity cases, including how the organization distinguishes between charity
		care and bad debts . Submit a copy of the written policy.
	c	Provide data on the organization’s past experience in admitting charity patients, including the amounts expended for
		treating charity care patients and types of services provided to charity care patients .
	d	Describe any arrangements with federal, state, or local governments or government agencies for paying for the cost
		of treating charity care patients . Submit copies of any written agreements .
	e	Does the organization provide services on a sliding fee schedule depending on financial ability to pay?	5e	□Yes	□No
		If “Yes,” submit the sliding fee schedule .
6	a	Does or will the organization carry on a formal program of medical training or medical research?	6a	□Yes	□No
		If “Yes,” describe such programs, including the type of programs offered, the scope of such programs, and affiliations
		with other hospitals or medical care providers with which the organization carries on the medical training or research
		programs .
	b	Does or will the organization carry on a formal program of community education?	. . .	.□. Yes6b	□No
		If “Yes,” describe such programs, including the type of programs offered, the scope of such programs, and affiliations
		with other hospitals or medical care providers with which the organization offers community education programs .

Schedule 2B Hospitals continued

Side 10 FTB 3500 2021

7229213

Click for Application Exemption File

Fact Name	Description
Purpose of the Form	The Exemption Application Form (FTB 3500) allows organizations to apply for tax-exempt status in California, confirming eligibility under state tax laws.
Governing Law	This form operates under California Revenue and Taxation Code Section 23701, which details the criteria for obtaining federal and state tax exemption.
Foreign Corporations	Organizations must disclose if they are classified as a foreign corporation. Failure to do so may result in delays or denials in the exemption request.
Annual Filing Requirement	Organizations that have submitted previous exemption applications must provide supporting documents such as the California Exempt Organization Annual Information Return (Form 199) if applicable.
Mailing Information	The completed FTB 3500 form should be mailed to the Exempt Organizations Unit of the Franchise Tax Board, ensuring it reaches the correct address for processing.

After completing the Application Exemption form, it is essential to ensure that all requested information is accurately provided. Submit the form to the specified address to initiate the exemption process, allowing ample time for processing and response from the relevant authorities.

Obtain a copy of the Application Exemption form (FTB 3500).
Fill in the organization information, including the California corporation number (or Secretary of State file number), FEIN, name of the organization, web address, street address, city, state, ZIP code, and contact numbers.
Complete the representative information section with the name, email address, and the street address of the representative, including city, state, ZIP code, and phone numbers.
Answer the general questions in Part I regarding the organizational structure, indicating whether your organization is a foreign corporation, a trust, or a limited liability company (LLC).
If your organization is an LLC, indicate whether the parent organization is a nonprofit and provide the parent’s employer identification number (EIN). If it is not, stop here as your LLC may not qualify for tax-exempt status.
Respond to questions about your current tax-exempt status with the IRS and whether you are applying for group exemption.
Proceed to Part II and answer questions regarding your organization's narrative of activities, including whether the California tax-exempt status was previously revoked and details on the purpose of your organization.
State your annual accounting period and the primary purpose of your organization.
Describe the planned activities and provide a detailed explanation of each activity, including their initiation dates and locations.
In Part III, provide financial data, detailing whether you've filed Form 199 for the current and prior years and including an income and expense statement if needed.
List all officers, directors, and trustees in Part IV, providing names, titles, mailing addresses, and compensation amounts.
Answer questions in Part V that pertain to any previous California ID number or prior revocation of exemption status.
In Part VI, indicate whether your organization will participate in fundraising activities and check all applicable types of fundraising programs.
Address specific activities in Part VII, including gaming activities, property leasing, and publication or distribution of literature.
Review the entire form for accuracy and completeness before signing and dating it at the end as an officer or representative of the organization.
Mail the completed form to the Exempt Organizations Unit at the address provided on the form.

What is the Application Exemption form?

The Application Exemption form, also known as Form 3500, is used by organizations in California to apply for tax-exempt status. It collects information about the organization, its purpose, activities, and financial data needed for exemption determination.
Who needs to file the Application Exemption form?

Any organization seeking to obtain tax-exempt status in California must file this form. This includes non-profit organizations, trusts, and limited liability companies that meet specific criteria.
What information is required on the form?

The form requires:
- Basic organization details, such as name and address.
- Representative's contact information.
- Organizational structure details, including whether it is a trust, LLC, or foreign corporation.
- A narrative describing the organization's activities and purposes.
- Financial data and previous tax filings.
What happens if I do not provide the required documents?

If the required documents are not included with the application, the request for exemption may be delayed or denied. It is crucial to provide all necessary information and supporting documents to prevent issues.
How should the completed form be submitted?

After completing the form, mail it to the following address:

Exempt Organizations Unit
MS F120
Franchise Tax Board
PO Box 1286
Rancho Cordova, CA 95741-1286
Can an organization apply for group exemption?

Yes, organizations can apply for group exemption. If applying for group exemption, be sure to check the appropriate box on the form and provide necessary details regarding the parent organization.
What if the organization’s tax-exempt status has been revoked?

If the organization's California tax-exempt status was previously revoked, it must indicate this on the form. Additionally, it may need to provide further information or documentation to help process the application.
What is the primary purpose of providing financial data on the form?

Financial data helps determine the organization’s eligibility for tax exemption. It allows the tax authorities to assess financial health and compliance with tax laws.
What should be included in the narrative of activities section?

In the narrative section, describe the organization's past, present, and planned activities. Provide a detailed overview for each activity, including:
- The purpose of the activity and how it furthers the organization’s exempt purpose.
- When the activity began or will begin.
- Where and by whom the activity will be conducted.

Many individuals and organizations make mistakes when filling out the Application Exemption form, which can lead to delays or denials of their requests. Here are nine common errors to avoid.

One frequent mistake is not providing necessary documentation. The form explicitly states that if the required documents are not submitted, the application will likely be delayed or denied. Make sure to include all requested copies, as this ensures that the review process can move forward smoothly.

Another error is failing to accurately identify the organization’s type. Applicants often overlook questions regarding whether the organization is a foreign corporation, a trust, or a limited liability company (LLC). Misidentifying the organization can lead to inappropriate eligibility determinations.

Errors also arise from leaving out important details about the organization’s parent company. If an LLC is seeking tax-exempt status, whether its parent organization is a nonprofit must be clearly stated. If not labeled correctly, the LLC may automatically disqualify itself for California tax-exempt status.

Individuals sometimes answer the questions about existing tax-exempt status incorrectly. Providing contradictory answers about current IRS tax-exempt status can cause confusion. Carefully review the questions to ensure that the information matches prior statuses accurately.

In addition, some applicants do not provide a thorough narrative of activities. This section requires a detailed description of each planned and current activity. Simply repeating language from organizational documents does not provide enough detail. A thorough explanation helps reviewers better understand the purpose and scope of the organization’s operations.

A common oversight involves not including all officers, directors, and trustees in the sections about financial data. Every individual in these roles must be listed, regardless of whether they receive compensation. Omitting anyone can lead to questions regarding the organization’s transparency and governance.

Incomplete information about prior California ID numbers can also lead to issues. Those who have previously obtained an ID must disclose this information. Failing to do so may raise red flags during the application's review.

Fundraising activities are another area where mistakes often occur. Applicants may neglect to check or fully describe the fundraising methods they intend to use. Those planning to engage in fundraising should outline all programs clearly, as lacking this detail can suggest a lack of comprehensive planning.

Lastly, answering questions about international activities inaccurately can complicate the application process. If the organization operates outside the United States, failure to indicate this can result in misunderstandings during the review. All answers should be as accurate and informative as possible to avoid complications.

The Application Exemption form is crucial for organizations seeking tax-exempt status in California. Along with this form, several other documents play an important role in completing the application process. Here’s a list of commonly used forms and documents that complement the Exemption Application form:

FTB 3500A: This form is used when the organization is qualifying for a tax exemption but has had its California tax-exempt status previously revoked. It outlines the necessary steps to regain that status.
FTB 199: Known as the California Exempt Organization Annual Information Return, this form provides annual financial data about the organization. It helps the state assess whether the organization continues to meet the eligibility requirements for exemption.
FTB 199N: Often referred to as the California e-Postcard, this short form is required for smaller organizations with gross receipts under a certain threshold. It simplifies the filing process for eligible entities.
Bylaws: These are essential for outlining how the organization operates. They specify the governing rules and procedures for the organization, including membership policies and the roles of officers.
Articles of Incorporation: This document is necessary to establish the organization legally. It provides fundamental information such as the organization’s name, purpose, and the structure of its governance.
Financial Statements: Organizations are often required to submit detailed income statements and balance sheets, showing their financial activity over the past few years. This information is crucial for assessing the organization’s financial health and compliance with tax laws.
Charitable Purpose Statement: This statement explains the specific charitable purpose or mission of the organization. It should detail how the organization operates and furthers its goals of serving the public or a specific community.

Including these documents along with the Application Exemption form can help streamline the approval process. It’s essential to ensure all information is accurate and complete to avoid delays or complications. Reach out if you have any questions about these forms or other requirements.

IRS Form 1023: This is the Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Both forms ask for detailed information about the organization’s structure and purpose, and both are necessary for obtaining tax-exempt status.
IRS Form 1024: This form is used for organizations seeking tax-exempt status under sections other than 501(c)(3). Like the Application Exemption form, it collects information about the organization, including its activities and structure.
California Form 3500A: This is used to submit a request for exemption if an organization's California tax-exempt status was previously revoked. It requires similar organizational information and rationale for the exemption.
FTB 990: The California Exempt Organization Annual Information Return gathers financial and operational details about a tax-exempt organization. It shares similarities in information requirements regarding the organization’s activities and governance.
FTB 199N: The California e-Postcard is a streamlined form for smaller tax-exempt organizations. Both forms require basic organization information and are necessary for maintaining compliance with state tax laws.
IRS Form 990-EZ: This is a shorter version of Form 990 for smaller tax-exempt organizations. It also requires financial information and describes the organization’s activities, much like the Application Exemption form.
Application for Charitable Trust Registration: This form is for organizations that wish to register as a charitable trust. It collects information similar to the Application Exemption form regarding structure and intended activities.
California Form 470: This is used by organizations seeking the initial tax-exempt determination under California law. Both forms require basic organizational information to assess eligibility for exemption.
California Form CT-1: This is for a charitable trust deceleration with the California Attorney General. It requires detailed information on the organization’s operations similar to the data sought in the Application Exemption form.
California Business Entity Form: Various business entity forms, such as the Articles of Incorporation or Limited Liability Company (LLC) application, request fundamental organizational information similar to that outlined in the Application Exemption form.

When filling out the Application Exemption form, here are five key things to do and avoid:

DO: Thoroughly review the instructions before starting. Understanding what’s required helps avoid mistakes.
DO: Provide complete and accurate information. Ensure every section is filled out truthfully to prevent delays.
DO: Use clear, concise language when describing activities. This clarity can help clarify your organization’s purpose.
DO: Double-check your contact information. This ensures the tax board can reach you if there are any questions.
DO: Include supporting documents, like financial statements or the organizational document, to support your application.

DON'T: Rush through the form. Take your time to ensure all sections are completed accurately.
DON'T: Leave any questions unanswered. Incomplete forms can lead to rejection or significant delays.
DON'T: Use vague descriptions of activities. Be specific about how each action furthers your organization’s goals.
DON'T: Neglect to sign the form. An unsigned application will not be processed.
DON'T: Ignore deadlines. Submitting the application on time is crucial for maintaining your tax-exempt status.

Misconception 1: The Application Exemption form is only for new organizations applying for tax-exempt status.

This is not true. Existing organizations that have had their tax-exempt status revoked may need to complete the form to apply for reinstatement. It is essential for both new and previously exempt organizations to understand the requirements of this form.

Misconception 2: Once submitted, the application will be processed automatically.

While submission is a necessary step, processing is not guaranteed. The Franchise Tax Board will review the application, and if any documents are missing or incomplete, the request could be delayed or denied. Organizations must ensure that all required information is accurate and complete when submitting the application.

Misconception 3: Providing copies of supporting documents is not acceptable.

Contrary to popular belief, the form explicitly states that copies of documents are acceptable. This means organizations do not need to submit original documents, which can be especially helpful in preserving important paperwork while ensuring compliance.

Misconception 4: All organizations automatically qualify for tax-exempt status.

This is a common misunderstanding. Not all organizations are eligible. Factors such as the organization’s structure, purpose, and activities are essential in determining if they can obtain this status. The form includes questions that help assess these qualifications.

Misconception 5: You don’t need to provide a detailed description of activities.

Failing to offer a detailed narrative of past and proposed activities can lead to issues in the approval process. The form encourages organizations to specify each activity alongside its purpose and how it aligns with their exempt objectives.

Misconception 6: Fundraising activities do not need to be disclosed.

This is incorrect. Organizations must disclose any fundraising activities they conduct or plan to conduct. Transparency about such activities is crucial for the assessment of the organization’s compliance with tax-exempt regulations.

Provide accurate and complete information in all sections of the Application Exemption form. Missing or incorrect details can lead to delays or even denial of your exemption request.
Include supporting documentation as required. Submitting copies of necessary documents will help the review process. Be sure to check if your organizational structure qualifies for the tax exemption.
Ensure that all representatives and officers listed are accurate and up-to-date. This includes their contact information, as the Franchise Tax Board will rely on these details for any communication.
Respect submission deadlines. Therefore, submit your form and any required documents promptly to avoid potential complications in getting your exemption approved.

Is the organization currently conducting, or plan to conduct activities?

□. .Yes. . . □. No

If “Yes,” enter the date the activities began, or will begin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . /.