In late July 2014, the IRS announced a streamlined process for small organizations seeking tax-exempt status under Section 501(c)(3). The process allows smaller organizations to file a simpler 2 ½ page application form, which is called Form 1023-EZ.
Key elements of the process and IRS Form 1023-EZ are:
- To be eligible, the organization’s gross receipts cannot exceed $50,000 in any of the preceding three years, in the current year, and the projected upcoming two years. Plus, the organization’s total assets must not exceed $250,000.
- The Form asks 11 questions about the organization’s specific activities, rather than a very detailed statement of proposed activities.
- The form must be e-filed with an accompanying payment of $400.
- Certain organizations are not eligible to file Form 1023-EZ, even if they meet the eligibility requirements in point 1 above. Such organizations include entities that are not corporations, foreign entities, churches, schools, and hospitals.
- There are special provisions for an eligible organization to submit Form 1023-EZ, even if the organization has already filed a form 1023.
For more information on this subject, please read this brief AICPA article or contact Brenda Jacobs at (231) 726-5880 or firstname.lastname@example.org. Check out our page on non-profit organizations for more details.