Focus on Foundations: IRS to Increase Certain Fees for Newly-Created Foundations and Other Charities

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Title:
Focus on Foundations: IRS to Increase Certain Fees for Newly-Created Foundations and Other Charities
Date:
March 6, 2006
Publication:
From the Riker Danzig Tax and Trusts & Estates UPDATE.
Author(s):
Area(s) of Practice:
Tax Law

When a new tax-exempt organization such as a private foundation or a public charity is created, the organization should apply to the IRS for a formal determination that it is tax-exempt. The fee for that application is presently $500 (or $150 if the organization has less than $10,000 in average annual receipts).

Effective for applications posted on July 1, 2006, or thereafter, that fee will be increased to $750 and $300, respectively. The IRS is similarly increasing a variety of other "user" fees it charges for private letter rulings, etc.

Anyone who is considering creating a private foundation or other charity in 2006 should start that process as soon as possible so that the application to the IRS can be completed and mailed before mid-year.