IRS Lowers Fees for Tax-Exempt Charity Application

Now there’s a headline you don’t see too often: “IRS Lowers Fees…” It’s true. Effective July 1, 2016, the IRS has taken steps to continue to ease the application process for tax-exempt charities.

The application fee for Form 1023-EZ will be reduced from $400 to $275. This random act of kindness from the IRS comes after the 2014 roll-out of Form 1023-EZ. This form was designed to reduce the backlog and turnaround time for 501(c)(3) registration, as it could originally take up to 6-12 months for status approval. Currently, the processing time takes less than a month.

Smaller organizations with annual gross receipts of $50,000 or less and assets of $250,000 or less are eligible to register using Form 1023-EZ, a considerably shorter form comprised of three pages versus the original Form 1023 comprised of over 30 pages.

The IRS did not make any fee adjustments to the original Form 1023 and will remain at either $400 or $850, hinging upon projected or actual gross revenue.

Please contact me at (805) 963-7811 or sgumley@bpw.com should you have any questions regarding your tax-exempt charity registration, fee changes or form eligibility.