Can NonProfits File Form 1023-EZ?

A potentially revolutionary change in the way the Internal Revenue Service grants public charity status is coming this summer.

In a Federal Register notice, the IRS recently announced its intention to allow applicants for 501(c)(3) public charity status to file a short Form 1023-EZ. The Form 1023-EZ is a three-page document which will greatly simplify the process for obtaining federal tax exempt status. By checking a series of boxes, applicants attest to their eligibility for exempt status and promise not to engage in prohibited activities. If you complete and send in this form within the first 15 months of your incorporation, you’re a 501(c)(3), ready to accept tax-deductible contributions and foundation grants.

The IRS intends for this three-page form to enable organizations to apply for not-for-profit status in a more efficient manner. The IRS expects the 1023-EZ form will cut the amount of time needed to fill out an application as well as the amount of time an organization waits for notification that its 501(c)(3) status has been approved.

The current 25-page form mimics a fully executed business plan. Some people are against implementing this new use of the Form 1023-EZ, saying that it will be too easy to become tax exempt. They are calling on the IRS to not implement this new plan.

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