The IRS Makes Nonprofits’ Filing for Tax Exemption EZ-er

Title:
The IRS Makes Nonprofits’ Filing for Tax Exemption EZ-er
Publication:
The July 2014 Riker Danzig Tax and Trusts & Estates Update
Attorneys:
Practices:

In order for the Internal Revenue Service (IRS) to recognize a nonprofit organization’s 501(c)(3) or other tax-exempt status, the organization must – in most cases – file a Form 1023 with the IRS. Until this month, the same 28-page paper application had to be filed by all applicants, regardless of the organization’s size.

On July 1, in an attempt to relieve a backlog of more than 60,000 applications, the IRS rolled out Form 1023-EZ, a three-page online application available for use by many organizations having projected annual gross receipts of $50,000 or less and assets of $250,000 or less. According to the IRS, as many as 70 percent of all applicants would qualify to use this shorter form. Instructions for the new form and an eligibility worksheet may be found at http://www.irs.gov/pub/irs-pdf/i1023ez.pdf.