Can an entity change type of tax exempt status?

[equinecpa]

I have a client who is a 501(c)(5) -an agricultural association. They'd prefer to be a 501(c)(3) - and I believe their activities would qualify (they are more educational in nature than anything else). Is it possible to change from a 501(c)(5) to a 501(c)(3) by filing a 1023?

[Davc]

Yes. However they need to have the By Laws reviewed and possibly amended for the new submission.

[Edsel]

IRS Approval?

Would there also be a form 1024 required to re-establish entity classification? If so, my guess is that a User Fee would also be required to process the 1024.

[Davc]

No. Just the 1023.

[Edsel]

Form 1023

Thank you Davc. I can't keep these form numbers apart in my old age.

Last time I was involved in a 1023, the user fee was $900, presumably to reimburse the IRS for its time and expense involved in researching the application. It was a cemetery. If it costs the IRS this much to process a cemetery I would be ashamed to admit.

We chose not to pay it, and of course, the 1023 was rejected for lack of payment.