Form 1023-EZ Application Fee Will Be Lowered

By Alistair M. Nevius, J.D.

Editor: Sally P. Schreiber, J.D.

Small organizations that want the IRS to recognize their tax-exempt status are getting a break. The IRS announced that it is cutting the application fee they must pay when applying for tax-exempt status (Rev. Proc. 2016-32). The announcement, in the May 31 Internal Revenue Bulletin, reduces the fee from $400 to $275 for Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. The change was effective July 1.

Form 1023-EZ is available for use by U.S. organizations with assets of $250,000 or less and annual gross receipts of $50,000 or less. The IRS recently reported that, in its first year of availability, 52% of applications for exempt status were made on Form 1023-EZ.

The IRS also announced, in its "Form 1023-EZ First Year Report," that it expects to make other changes to the form although, at this writing, no draft amendments have been posted on the IRS website.

This revenue procedure modifies Rev. Proc. 2016-8, which was issued in January, and which sets the user fees for applications for recognition of exempt status, as well as a fee schedule for requests for determination letters.

Tax Insider Articles

TECHNOLOGY

2020 tax software survey

COVID-19 upended tax season. Did CPAs’ tax software help them cope? Read the results of our annual tax software survey

TAX RELIEF

Quirks spurred by COVID-19 tax relief

This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.