July 2014

IRS Announces Simplified Application for Small Charities Applying for 501(c)(3)

Starting July 1, 2014, small charities may be eligible to apply for tax exempt status by filing the
Internal Revenue Service’s new Form 1023-EZ.

Until recently, all non-profit organizations seeking tax-exempt status under 501(c)(3) were required to: pay the $850 filing fee; complete the 26 page IRS Form 1023; and provide the IRS with a detail summary of charitable activities, governing documents and financials.

Now the Internal Revenue Service has simplified the application for small charities. Most organizations that have assets valued less than $250,000 and annual gross receipts of $50,000 or less will qualify to use the new Form 1023-EZ. That form is only 3 pages and the application fee is $400. The new Form 1023-EZ must be filed online.

If you are planning formation a non-profit charity, you may want to consider filing the new Form 1023-EZ. The eligibility requirement are contained in the new Form1023-EZ’s instructions.

INSTRUCTIONS
http://www.irs.gov/pub/irs-pdf/i1023ez.pdf

NEW APPLICATION FORM
http://www.irs.gov/pub/irs-pdf/f1023ez.pdf

This is good news for tax planning for family foundations, athletic clubs, and charitable groups. Call Greg Steed, Chair of the Trusts and Estates Practice Group at RBMN, at 801.531.2000 if you have any questions.