Changes to Form 1023-EZ

The IRS has revised Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions which went into effect January 10, 2018. The $275 1023-EZ user fee remains the same. The changes are designed to reduce filing errors and increase compliance with respect to those eligible to file Form 1023-EZ. Form 1023-EZ filers must now complete the following:

  • Filers must describe their mission or most significant activities in Part III. This will provide the IRS insight into the corporation’s plans. Statements with activities that do not indicate compliance with exemption requirements will be referred to a Determinations Specialist. Incomplete narratives may be rejected or referred to a Determinations Specialist.
  • Filers must now check a box indicating their income and asset levels. If the corporation’s annual gross receipts have exceeded $50,000 in any fiscal period in the last 3 years, or if the corporation projects that its annual gross receipts will exceed $50,000 in any fiscal period in the next 3 fiscal years, it cannot file Form 1023-EZ and must file the full Form 1023.
  • Filers must now check a box regarding whether they are applying for classification as a church, school, or hospital. If the applicant responds yes to filing as a church, school or hospital, then the corporation cannot file Form 1023-EZ and must file the full Form 1023.

These revisions to the Form 1023-EZ are intended to make it easier for organizations to select the correct application form when applying for tax-exempt status and assist the IRS in making accurate determinations on tax-exempt status.

For more information on the revised Form 1023-EZ or to determine eligibility, review the Instructions for Form 1023-EZ or the Eligibility Worksheet found on pages 13-20 of the instructions.

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