In an effort to make applying for tax exemption easier, the IRS Exempt Organizations (EO) office is developing an Interactive Form 1023, Application for Recognition of Exemption (“i1023”). We have been playing around with it and its a huge improvement over the current static form that requires preparers to constantly flip back through the instructions or resort to google for definitions and answers to common questions.
The i1023 was developed from recommendations by the IRS’ Advisory Committee on Tax-Exempt and Government Entities (ACT). When final testing is completed later this year, applicants will be able to print and mail the form and its attachments just like the standard Form 1023.
The beta version features pop-up information boxes for most lines of the form. These boxes contain explanations and links to related information on IRS.gov and StayExempt.irs.gov, EO’s educational website. Anticipated i1023 benefits include the following:
- Self-prepares will be able to submit a more complete form
- Self-preparers will have an easier time locating explanations and definitions which should reduce IRS processing time
- The IRS says applicants should be able to receive a tax-exempt determination more quickly
While we are hopeful that the new 1023i will reduce wait times; however, it is unclear to us how the 1023i will impact the current extraordinary wait times which we understand are caused by a combination of reduced work days due to the sequester and increased workload due to the automatic revocations. The new i1023 will most certainly be a benefit to self-preparers who wish to invest the time and effort to prepare their own application for exemption.
Although viewers are unable to print or submit this “review” version of i1023, EO encourages the public to click through its new features and promote the i1023 to colleagues and business associates. After reviewing the i1023, please send your comments to firstname.lastname@example.org.
Ellis Carter is a nonprofit lawyer licensed to practice in Washington and Arizona. Ellis advises tax-exempt clients on federal tax matters nationwide.