Form 1023, a highly complex 11-part application for 501(c)(3) tax-exempt status, is now available for electronic submission. Optima Tax Relief reviews the IRS decision to create a more efficient, streamlined filing process for non-profit organizations seeking tax exemption.
Charities, social welfare organizations, educational institutions, religious organizations and all tax-exempt bodies can expect a more streamlined tax filing process in 2020 – the IRS is allowing for electronic filing of Form 1023.
Form 1023 was revised to help tax-exempt non-profit organizations file more quickly and efficiently. The new electronic filing process will help to reduce errors and speed up the acceptance process while simultaneously keeping approval and rejection rates consistent. When the IRS launched the initial Form 1023-EZ in 2014, data reflected a decrease in filing errors and a significant improvement in processing times. However, there were eligibility restrictions for filing the 1023-EZ. Today, as of January 31, all applications for recognition of exemption on Form 1023 must be filed electronically, though a 90-day grace period was given where paper forms were accepted.
To file Form 1023, applicants must submit a $600 user fee using the Pay.gov website at the same time that the form is submitted. Accepted payment methods include direct bank account withdrawal, debit, or credit card.
Organizations that seek tax-exempt status can receive information about Form 1023 via subscription to Exempt Organizations Update. This newsletter is a free resource that offers information relevant to tax-exempt non-profit organizations. Some of the information includes:
- The latest news releases from the IRS relating to tax-exempt institutions
- The latest updates to forms
- Filing guidance
- Notifications of IRS trainings and seminars
- Updates to the webpage for IRS Charities and Non-Profits
To learn more about Form 1023 and tax-exemption requirements, please visit the IRS.gov page.