Form 1023-EZ has a high approval rate compared to the full Form 1023, but that doesn't mean every application sails through. Most rejections and delays come down to a small set of avoidable mistakes.
1. You weren't actually eligible for the EZ version
This is the single biggest cause of problems. The eligibility worksheet checks things beyond just your projected revenue and assets -- successor organizations, certain foreign activities, and a handful of organization types (churches, schools, hospitals, and a few others) aren't eligible for the EZ form at all, even if they're small. Filing the EZ version when you don't qualify can mean starting over with the full Form 1023.
2. Missing or not-yet-issued EIN
You need an Employer Identification Number before you can file, even if your organization has no employees. Applying for an EIN is free and usually instant online at irs.gov -- but people sometimes try to start the 1023-EZ form before they have one, then have to stop and restart.
3. Organizing document problems
Your articles of incorporation (or trust document, or association agreement) need to include specific IRS-required language about your exempt purpose and what happens to your assets if the organization dissolves. If your state-filed organizing document is missing this language, the IRS can deny your application even if everything else is correct.
4. Vague or mismatched mission and activities
Your stated purpose needs to clearly fit within the IRS's exempt categories (charitable, educational, religious, scientific, and a few others), and your described activities need to actually match that purpose. A mission statement that's too vague, or activities that sound more like a business than a charity, invite follow-up questions.
5. NTEE code mismatches
The National Taxonomy of Exempt Entities (NTEE) code you select is supposed to reflect what your organization actually does. Picking a code that doesn't match your stated activities is a common, easily-avoidable red flag.
How to avoid these
Most of this comes down to careful preparation before you ever open the pay.gov form. Our guided questionnaire checks your eligibility before you pay, walks you through the organizing-document requirements, and helps you match your activities to the right NTEE code -- so the answer key you take to pay.gov has already been through the checks that most commonly trip people up.