Less Complex Process to Tax Exemption Now Available for Small Charities

The IRS, on July 1, 2014, in IR-2014-77, announced the introduction of a new, shorter application form (Form 1023-EZ) that will help small charities more easily apply for tax-exempt status under Section 501(c)(3). The new application is approximately 3 pages long, as opposed to to the standard 26-page Form 1023.  Most charities with gross receipts of $50,000 or less and assets of $250,000 are eligible. Organizations must complete a checklist, found in the Instructions for Form 1023-EZ before filing the form.  If the organization qualifies to file the form, it must file the form at pay.gov and must pay a user fee of $400.

The user fees for a standard  Form 1023 are currently $400 for organizations whose gross receipts do not exceed $10,000 or less annually over a 4-year period, or $850 for organizations whose gross receipts exceed $10,000 annual over a 4-year period.

See the following documentation for more information about the new form:

1) Information on Form 1023-EZ

2) Instructions for Form 1023-EZ

3) Revenue Procedure 2014-40

4) Treasury Regulations on Shorter Application Process


Want to further discuss these issues?  Contact me at 954-944-3929 or nrumbak@rumbaklaw.com.

*This document contains legal information, but does not contain legal advice.

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