Changes to Form 1023-EZ

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

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations.  Ellis is licensed to practice in Washington and Arizona and advises nonprofits on federal tax and fundraising regulations nationwide. Ellis also advises donors with regard to major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.

Share this post

Scroll to Top
FREE DOWNLOAD

How to Start a Non-Profit Organization

Download our free guide to learn about the many elements needed to run a successful nonprofit organization, as well as how to avoid common pitfalls and mistakes.