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Never easier to obtain tax-exempt status

The Internal Revenue Service recently introduced a new, shorter application form to help small charities apply for 501(c)(3) tax-exempt status more easily.

The new Form 1023-EZ, available today on IRS.gov, is only three pages long, compared with the standard 26-page Form 1023. Most small organizations, including as many as 70 percent of all applicants, qualify to use the new streamlined form. Most organizations with gross receipts of $50,000 or less and assets of $250,000 or less are eligible.

The change will allow the IRS to speed the approval process for smaller groups and free up resources to review applications from larger, more complex organizations while reducing the application backlog. Currently, the IRS has more than 60,000 501(c)(3) applications in its backlog, with many of them pending for nine months.

The new EZ form must be filed online. The instructions include an eligibility checklist that organizations must complete before filing the form.

The Form 1023-EZ must be filed using pay.gov, and a $400 user fee is due at the time the form is submitted. Further Information on Form 1023-EZ application process can be found in Revenue Procedure 2014-40.

DISCLAIMER: This information is extracted with permission from IRS regulations and publications as of the date of this post.  We are not responsible for updating this information for future changes.   If assistance is needed regarding obtaining tax-exempt status from the IRS, an appointment may be made with one of our Directors of Audit and Tax Services by reference to the CONTACTS page above.  Standard rates and terms for service will apply.  New clients may be required to pay a retainer.

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