According to the IRS, the agency handles 70,000 applications for tax-exempt status each year. As a result of the volume of applications being submitted, it can take months for an application to be reviewed by an examiner. For many non-profits who are in the start-up phase the delay can prove problematic for raising funds and/or soliciting grant money. In an effort to streamline the application process the IRS revealed in July 2014 an online form that is intended for smaller organizations with “gross receipts of $50,000 or less and assets of $250,000 or less are eligible.” The IRS stated that as many as 70 percent of all 501(c)(3) applications would qualify for the new form. According to IRS Commissioner John Koskinen, the new form
“is a common sense approach that will help reduce lengthy processing delays for small tax-exempt groups and ultimately larger organizations as well. The change cuts paperwork for [smaller] charitable groups and speeds application processing so they can focus on their important work.”
Form 1023-EZ reduces the application process from 26 pages to 3 pages. However, the form must be completed and filed online and a $400 fee must also be submitted online with the application. If you represent a New Jersey non-profit organization that contemplating filing for tax exempt status and have questions about the application process, contact one of our attorneys today.
About the author: Andrew P. Bolson, Esq. is an attorney with Meyerson, Fox, Mancinelli & Conte, P.A. in Montvale, New Jersey. Andrew’s practice focuses on commercial and estate litigation, business law, real estate law, estate planning and privacy and Internet law.