Earlier this year, the IRS announced a delay of its release of a new online program that is designed to help nonprofit groups prepare “complete and accurate” applications for exemption known as “Form 1023” online.
The delay for the software program, which is known as “CyberAssistant,” means that a reduced fee for charity-status applications will not be available until it is released. Last year, the IRS said that the CyberAssistant program and the reduced fee would be ready in 2010. Recent remarks by IRS representatives at the Western Conference on Tax Exempt Organizations, co-sponsored by Loyola Law School and the Internal Revenue Service, indicated that CyberAssistant will not be released soon and is unlikely to be released in 2011.
Currently the IRS charges a filing fee of $850 for applications by organizations with annual gross receipts that average or are anticipated to average more than $10,000. Applicants with actual or anticipated annual gross receipts of $10,000 or less are required to pay $400.
The IRS has said that it will offer lower fees to groups that use CyberAssistant to prepare their Form 1023 applications. Once the program is released, the organizations that use CyberAssistant to file their applications will be charged $200 regardless of their size and applicants that do not use CyberAssistant will be required to pay $850 regardless of size.
The IRS’ continuing delays in launching the much anticipated CyberAssistant program have left many would be nonprofit founders struggling with the question of whether CyberAssistant and its promise of improved applications and significantly lower filing fees is worth the wait. Due to the ongoing problems and delays and lack of information regarding an expected launch date, we think not.