Great news from the IRS! Earlier this month the IRS introduced a new shorter form 1023-EZ for applying for income tax exemption status under 501(c)(3).
The new form is a welcomed common sense change for small organizations seeking tax exempt status. The new form is only 3 pages, compared to the 26 page behemoth we had to use in the past. According to the IRS, as many as 70% of all applicants will qualify for using the new form. Most organizations with expected receipts of $50,000 or less, and assets of $250,000 or less are eligible.
The IRS hopes the new shorter form will greatly reduce the lengthy application processing time for both small organizations and, ultimately, larger ones. Previously, all organizations, regardless of size, had to use the same 26 page form 1023. As expected, this caused unnecessary paperwork and needless delays. Of course, the IRS hopes to use all the extra time they will save by ensuring organizations are actually doing the charitable work they have applies for.
This change is long overdue, considering the IRS, on average, is currently processing applications submitted last October 2013 and has a backlog of 60,000 applications! If you or anyone you know is considering the application process, now is s good time to try the new form! Click here for the new form: The new EZ form must be filed online. The instructions include an eligibility checklist that organizations must complete before filing the form. As always, a user fee does apply.
Check with an experienced CPA for more info.