The Ritter & Randolph, LLC Blog

1023-EZ Tax-exempt Application: Too simple?

Joseph Zoimen, Esq.The I.R.S. has been charged with going too easy on some charities said Patricia Cohen of The New York Times, and is facing criticism from a host of groups, including the National Council of Nonprofits and The National Association of State Charity Officials. The new 2-1/2 page 1023-EZ replacement to the 26-page 1023 form, allows smaller non-profits to complete the application quickly and without the cumbersome amount of documents that must be attached to the ordinary 1023 form. Critics have said the new form oversimplifies the exemption process and could lead to an increase in charity fraud and abuse.

Since the inception of the 1023-EZ last July, 28,000 groups have used it and processing time for the new EZ application is averaging 16 days, compared with an average of 110 days for the long form. The IRS recently reported that about half of the Section 501(c)(3) applications it now receives are on Form 1023-EZ. So if you were thinking of finally starting that small charity and were afraid of the time and cost, now would be the time to apply using Form 1023-EZ.