Applying for 501(c)(3) tax-exempt cachet aloof got a accomplished lot easier for baby charities—perhaps too easy, some in the nonprofit association say.
On July 1, the Internal Revenue Service alien Anatomy 1023-EZ, accessible for best organizations with gross receipts of $50,000 or beneath and assets of $250,000 or less. The IRS says it cuts the paperwork appropriate to administer for nonprofit cachet about tenfold, from 26 pages bottomward to aloof three.
“This is a astute access that will advice abate diffuse processing delays for baby tax-exempt groups and ultimately beyond organizations as well,” IRS Commissioner John Koskinen said in a statement. “The change cuts paperwork for these accommodating groups and speeds appliance processing so they can focus on their important work. … This action created needlessly continued delays for groups, which didn’t advice the groups, the taxpaying public, or the IRS.”
By streamlining the action for abate organizations, the IRS believes it will be able to chargeless up assets to analysis applications for beyond groups and abate the accepted excess of 60,000 501(c)(3) applications.
The new EZ anatomy charge be filed online, and groups are appropriate to complete an accommodation account afore application it.
Despite IRS promises of beneath red tape, abounding in the nonprofit association are anxious that the new anatomy will account its own headaches.
The National Association of Accompaniment Alms Officials said the anatomy could accountability accompaniment and federal alms regulators that are already continued thin.
“While we acknowledge that the IRS will be committing added assets to back-end acquiescence examinations to abode the abeyant for malfeasance, our affair is that the accepted 17 percent of all applicants for which the Anatomy 1023-EZ would administer could abound exponentially if the action for accepting tax-exempt cachet was decidedly simplified,” NASCO President Alissa Hecht Gardenswartz said in a account in May advising adjoin acceptance of the abbreviate form.
Critics told The Chronicle of Philanthropythat the best Anatomy 1023 educates applicants on all of the planning complex with ambience up a nonprofit and helps abash abeyant cheats from applying for nonprofit status.
In a blog column aftermost April, nonprofit advocate Ellis Carter was alloyed on the new form.
“I acclaim the IRS’s adroitness in attractive for added able means to action applications for exemption,” she wrote. However, “the accepted Anatomy 1023 forces applicants to articulate their affairs in a abode that mimics creating a business plan. In contrast, the automated 1023-EZ is acceptable to aggravate the admeasurement of nonprofits and aftereffect in a apparent access in the cardinal of applicants who are not able to run a nonprofit.”
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