Tax Law Blog
In 2014, the IRS introduced a new streamlined tax-exempt application that gave certain charitable organizations the opportunity to bypass the longer Form 1023 tax exempt application. Some organizations now can apply for tax-exempt status through the Form 1023-EZ. Benefits of Form 1023-EZ include its shorter length and fewer questions regarding the details of a charity's specific operations. However, there are some restrictions as to whether a charitable organization qualifies to submit a Form 1023-EZ. The IRS has provided an Eligibility Worksheet (pages 11-20 of the Form 1023-EZ instructions) that taxpayers can complete in order to determine if a charity is eligible to use Form 1023-EZ.
When working with charities and other nonprofit organizations, two terms are frequently used interchangeably that actually do not mean the same thing. Watch this video to learn the difference between nonprofit and tax exempt.
Generally a Form 990 must be filed by nearly all tax exempt organizations. If you do not know the specific exception as to why you wouldn't have to file a Form 990 then you must file. If you do not file this form on time there could be some very significant financial penalties. Furthermore, the IRS has a revocation program, which means that if you do not file the Form 990 for a certain number of years, then the IRS will automatically, without telling you, terminate your organizations tax exempt status. Learn more in the short video clip below.
