The Internal Revenue Service (IRS) currently recognizes more than one million 501(c)(3) organizations and has more than 60,000 501(c)(3) applications pending. On July 1, 2014, the IRS introduced a new, streamlined application form to help small charities more easily apply and obtain 501(c)(3) tax-exempt status. Form 1023-EZ, which is 3 pages long compared to the 26 page comprehensive Form 1023, is available for most small organizations with projected gross receipts of $50,000 or less for the first three years and total assets with a fair market value less than $250,000. The filing instructions for Form 1023-EZ include a 26 question eligibility worksheet that must be completed to determine if they are eligible to file the shortened form. Form 1023-EZ must be filed online at http://www.pay.gov and a $400 user fee is due at the time the form is submitted.
It should also be noted that many organizations may be considered tax exempt without filing Form 1023-EZ or Form 1023.
- Churches, including synagogues, temples, and mosques.
- Integrated auxiliaries of churches and conventions or associations of churches.
- Any organization that has gross receipts in each taxable year of normally not more than $5,000.
Levin Swedler Crum – Certified Public Accountants consults many non-profit organizations on not only the tax-exempt application process but also on the IRS annual filing requirements to maintain tax-exempt status.
Written by: Matthew Migal, CPA