IRS revises Form 1023 for applying for tax-exempt status; New electronic filing available to help charities
WASHINGTON – As part of an ongoing effort to improve service for the tax-exempt community, the Internal Revenue Service has revised Form 1023 to allow electronic filing for the first time starting later this month.
To help charities apply for Section 501(c)(3) tax-exempt status, the IRS has revised Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions.
“Filing electronically reduces errors, and we believe this will help provide a smoother application process for those seeking tax exemption,” said Tammy Ripperda, Commissioner of the IRS Tax Exempt and Government Entities division. “As we’ve seen with the 1023-EZ, we believe this change will help with application processing time and help with our wider efforts to improve our work with the tax-exempt community.”
The IRS expects the electronic Form 1023 benefits to mirror those realized when Form 1023-EZ went online in 2014. IRS statistics show the 1023-EZ improved application processing time for both the Form 1023 and 1023-EZ while maintaining similar approval and rejection rates between the two forms.
Beginning Jan. 31, 2020, applications for recognition of exemption on Form 1023 must be submitted electronically online at www.pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 1023 (Rev. 12-2017).
The required user fee for Form 1023 will remain $600 for 2020. Applicants must pay the fee through www.pay.gov when submitting the form. Payment can be made directly from a bank account or by credit or debit card.
Updates about Form 1023 can be obtained by subscribing to Exempt Organizations Update, a free e-Newsletter from the IRS Exempt Organizations’ office. EO Update provides information on tax policy, services and information that’s important to tax-exempt organizations including:
- News releases from the IRS related to exempt organizations
- New forms, guidance and other publications
- Changes and additions to the IRS Charities and Nonprofits website
- Upcoming IRS training and outreach events
Additional information on how to apply for IRS recognition of tax-exempt status is available:
- Applying for Tax-Exempt Status on IRS.gov
- Form 1023 Electronic Filing Overview presentation on StayExempt.irs.gov
- Applying for 501(c)(3) Status course on StayExempt.irs.gov