How Much Does it Cost to File for 501c3 Tax Exemption

Cost of 501c3

How much does it cost to file for 501c3 tax exemption?  Let me answer this question in two parts:

First, there is the required IRS Form 1023 application fee, which is either $400 or $850 depending on your organization’s projected income over the next three years.  If your organization’s projected annual revenue averages $10,000 or more during the next three years, then your application fee is $850.  If your organization’s projected annual revenue averages less than $10,000 during the next three years, then your application fee is $400. 

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New $275 Form 1023-EZ User Fee (July 1, 2016)

Beginning July 1, 2016, the IRS has changed the User Fee for IRS Form 1023-EZ from $400 to $275 for all applicants.  This new fee applies only to those Form 1023-EZ applications prepared and submitted after July 1, 2016. In addition to lowering the application fee, we also expect the IRS to add several new safeguards to the Form 1023-EZ application process to continue discouraging non-qualified applications.  These new safeguards could include revisions to the actual Form 1023-EZ and increased follow-up correspondence with the IRS to verify appropriate formation documents and tax exempt provisions contained within those formation documents (Articles of Incorporation and Bylaws).  Overall, we expect the IRS to […]

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IRS Form 1023-EZ Help and Services

IRS Form 1023-EZ Help, Cost and Services Searching for IRS Form 1023-EZ help, cost or filing services?  Nonprofit Elite can help! We are excited to offer a more affordable and faster 501c3 application process to small and mid-size nonprofit organizations seeking to obtain tax exempt status from the IRS. The newly-released 501c3 application is called IRS Form 1023-EZ and is appropriate for most nonprofit organizations with projected annual receipts of $50,000 or less and total assets of $250,000 or less (excluding churches, schools, hospitals, medical research organizations, and a few other types).  The IRS User Fee for this new Form 1023-EZ is $400 for all […]

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501c3 Filing Fee

Nonprofit organizations filing IRS Form 1023 – Application for Recognition of Exemption must include a Form 1023 User Fee payment as part of their application for either $400 or $850, made payable by check to the United States Treasury.

 

The Form 1023 filing fee amount is determined by your organization’s annual revenue over the next four years, and the IRS uses $10,000 per year as its benchmark.  For example, if your organization’s projected annual revenue averages $10,000 or more during the next four years, then your application fee is $850.  If your organization’s projected annual revenue averages less than $10,000 during the next four years, then your application fee is $400.

501c3 Filing Fee

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Can I Speed Up the 501c3 Application Review Process?

The IRS allows for expedited requests of Form 1023 under two specific circumstances: First, if your organization is applying in direct response to a national disaster that demands urgent action, such as a major hurricane or other natural disaster.  And second, if your organization has a significant (very large) grant that is pending IRS approval and will be lost if your approval is not awarded quickly.  Even in these situations, however, expedited applications are rare.

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IRS Taking Longer to Review 501c3 Applications / Form 1023

The last few months we’ve noticed a significant increase in the amount of time that the IRS is taking to review and approve applications for 501c tax exemption. During the first six months of 2012, our clients were receiving their Letters of Determination on average within 3-5 months.  More recently, a number of our clients are well into their fifth and sixth month of waiting.  Since there is no effective way to expedite the process, we encourage you to plan accordingly and to contact us if you have questions.

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