Tax Law Blog
The IRS recently announced a new and shorter 1023-EZ form to help small charities apply for 501(c)(3) tax-exempt status.
The new form is described by IRS Commissioner John Koskinen as a "common-sense approach that will reduce lengthy processing delays for small tax-exempt groups and ultimately larger organizations as well." The announcement comes at a time when the IRS is currently evaluating more than 60,000 applications for 501(c)(3) status, with many pending for at least nine months.
After feedback from the tax community and those familiar with charitable organizations, the IRS reduced the 26 page form to just six pages for those organizations that qualify to use the new 1023-EZ. Many organizations will be eligible for the new form. The new form signals a change in the IRS's focus from a prolonged up-front review required by the complex form to a shorter initial review, allowing the IRS to focus on compliance activity on the back end.
The new 1023-EZ must be filed online, but there are still many corporate formalities that must be done before tax exemption is granted. Even though many organizations will still need to use the full Form 1023, this new form may help many startup charities obtain tax exemption much sooner. If you have any questions regarding charities, tax exemption, or eligibility for the new Form 1023-EZ, do not hesitate to contact us.
