New Form Makes Applying for 501(c)(3) Tax-Exempt Status Easier
The Internal Revenue Service 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 on IRS.gov, is 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.
Following feedback this spring from the tax community and those working with charitable groups, the IRS refined the 1023-EZ proposal for today’s announcement, including revising the $50,000 gross receipts threshold down from an earlier figure of $200,000.
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.
There are more than a million 501(c)(3) organizations recognized by the IRS.
To start the filing process you need a non-profit company established in your state:
- Articles of Incorporation
- Employer Identification Number
- By-laws of the Organization
- Minutes of Board Meetings
- Names, Addresses, and Resumes of Board Members
- Names and addresses of all Active Members
- Inventory of Assets
- Inventory of Liabilities
- Rent/Lease Agreements and Contracts
- Revenue and Expense Statements
- Written Reason for Formation and History
- Organization Mission Statement
- Organization Activities, Operations and Programs Documentation
- Financial Support Documentation
- Fund Raising Program Descriptions
Fulton Abraham Sanchez, CPA, founder of FAS CPA & Consultants of Miami, FL, is a Certified Public Accountant specializing in Tax Planning . You can email him to firstname.lastname@example.org or contact us on Facebook : FAS CPA & Consultants
Request a Confidential Consultation
FAS CPA & Consultants
9000 SW 137 AV Suite 224 Miami, FL 33186 T: 786-462-7899 E: email@example.com