On July 1, the IRS announced that it has adopted a new, much shorter Form 1023-EZ that will streamline the process for small non-profit and religious organizations to apply for 501(c)(3) tax exemption status. The newly adopted form is now 3 pages, as opposed to the previous 26-page long form application.
The new form will be available to most charitable organizations that have gross receipts of $50,000 or less and assets of $250,000 or less. The IRS estimates that up to 70% of all applicants will qualify to use the new streamlined form. According to IRS Commissioner John Koskinen, the new form is meant to cut down on the paperwork for the charitable organizations seeking to apply for tax-exempt status. The new streamlined application process will also allow the IRS to reduce its estimated 60,000-application backlog, many of which remain pending for up to nine months.
This update follows another significant IRS change from earlier this year, when the IRS released a new Revenue Procedure that provides a streamlined procedure for certain small nonprofits to reapply for tax-exempt status after having their status revoked for failure to file tax returns for three consecutive years. You can read more about that update in our earlier blog post.
If you think your organization could benefit from the IRS’s new application process, feel free to contact the attorneys at Dalton & Tomich to discuss whether you qualify for the new Form 1023-EZ and whether the simplied application process benefits your organization. More specific details about the new Form 1023-EZ can be found in Revenue Procedure 2014-40. You can also read the full IRS Press Release here.