Hyden, Miron & Foster, PLLC Law Blog

Friday, August 22, 2014

Is the new IRS Form 1023-EZ really “EZ”?

By: Tiffany Parker Nutt 

The IRS recently announced a new Form 1023-EZ that is available for small organizations seeking tax-exempt status. The new form provides a simplified application process and is expected to reduce application backlog. However, not all organizations seeking tax-exempt status can use Form 1023-EZ. It can only be used by organizations seeing tax exempt status under IRC § 501(c)(3). IRC § 501(c)(3) applies to entities organized exclusively for religious, charitable, scientific, testing for public safety, literary, educational purposes, or for the prevention of cruelty to children or animals. The new form cannot be used by organizations with annual gross receipts exceeding $50,000.00 or with total assets exceeding $250,000.00.

Form 1023-EZ can only be filed electronically at www.pay.gov after you register for an account with that site. The IRS will not accept printed copy submissions of the application. Also, the electronic application will not be processed until the $400 user fee is paid. The user must be paid online also.

The IRS states that the new “EZ” form (3 pages) is shorter than the full Form 1023 (12 pages). However, instructions for Form 1023-EZ require that applicants must complete a seven page Eligibility Worksheet first. Applicants do not have to submit the Eligibility Worksheet with the Form 1023-EZ applications, but need to keep a copy for their records.

Form 1023-EZ only contains four parts. Part I is general information about the organization. Part II is a series of “check the box” items attesting that the organization document meets certain requirements. Part III relates to the organization’s specific activities. Part IV is a series of questions to determine whether or not the organization is a private foundation or public charity.

Even though the Form 1023-EZ is easier than the full Form 1023, the application limitations and questions are still very complicated. Contact the attorneys at Hyden, Miron & Foster, PLLC to assist with your tax-exempt status application and organization formation.

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