Starting a 501(c)(3) Just Became Easier

By Anjali Govani and Brian Groff, CPA, Partner

On July 1^st, the IRS released an abridged form to obtain tax exemption under Section 501(c) (3) of the Internal Revenue Code. If an organization has less than $50,000 in gross receipts and less than $250,000 in assets, these organizations may be eligible to file Form 1023-EZ when applying for tax-exempt status.  

Form 1023-EZ  takes the voluminous Form 1023 and cuts it down to a mere 3 pages. But before everyone gets too excited, the IRS has a 7-page Eligibility Checklist that must be completed to see if you qualify to use Form 1023-EZ. Here is a sample of some of the questions:

1. Do you project that your annual gross receipts will exceed $50,000 in any of the next 3 years?
2. Have your annual gross receipts exceeded $50,000 in any of the past 3 years?
3. Do you have total assets in excess of $250,000?
4. Were you formed under the laws of a foreign country?

If an organization can answer “NO” to all of the above, they could be one step closer to filing their Form 1023-EZ, but there are other additional eligibility requirements to qualify. We possess the professional skills necessary to provide the valuable services and guidance for completing Form 1023-EZ or Form 1023 if an organization doesn’t qualify for the short form. 

For more information or assistance with obtaining a tax-exempt status, please complete the form below.