501(c)(3) application is now simpler
The IRS has introduced a new, shorter form that small organizations can use to apply for section 501(c)(3) IRS charity exemption from taxes.
The new Form 1023-EZ is three pages long. Compare this to the standard 26-page Form 1023. The IRS tells us that as many as 70% of applicants will qualify to use Form 1023-EZ. Most organizations with gross annual receipts of $50,000 or less and assets of $250,000 or less are eligible.
By simplifying things for smaller groups, the IRS expects to free up time for the review of more complex applications filed by larger charities. The IRS reports a current backlog of more than 60,000 501(c)(3) IRS charity exemption applications, with many pending for nine months. The Form 1023-EZ must be filed online. Also,
- The instructions provide an eligibility checklist.
- The $400 user fee is due at the time of filing.
- More details are available in Rev Proc 2014-40.
Not all nonprofits have section 501(c)(3) status
There are more than 1.4 million nonprofits now recognized as tax-exempt by the IRS. More than 1 million of them have section 501(c)(3) IRS charity exemption. FAQ: Are there nonprofits that aren’t charities?
Check all recognized 501(c)(3) and other nonprofits
You can find the identity and tax status of all 1.4 million+ nonprofits recognized by the IRS at CharityCheck101.org.