How much does it cost to file for 501c3 tax exemption? That depends on which IRS form you use to file, and you have two options: IRS Form 1023-EZ or IRS Form 1023. Let’s take a look at both options in more detail: Option One: IRS Form 1023-EZ – If you are NOT a church, a school, a hospital, a foreign organization, or a medical research organization/hospital, and if your total projected revenue (gross receipts) is less than $50,000 per year, then there’s a good chance you will qualify for 501c3 tax exemption using IRS Form 1023-EZ. IRS Form 1023-EZ is a shorter and less expensive option for startup nonprofit organizations, and the IRS User Fee is only $275 (as of March, 2018). The IRS estimates less than 20 hours of total preparation time for completing this application, as opposed to 100+ hours for completing the traditional IRS Form 1023. Also, the turn around time for IRS [...]
Is Your IRS Form 990 Due May 15th? We Can Help! Most nonprofit organizations are required to file IRS Form 990 each year to stay compliant with the IRS (churches are an exception). Form 990 is due five months and fifteen days after the end of your fiscal year. For those with a January-December accounting year, this means May 15 is your due date! Which Form 990 you file is determined by whether or not your organization is a Public Charity or Private Foundation and by your organization’s revenue during your previous year. Most small public charities (less than $50,000 per year in revenue) will file IRS Form 990-N. Larger organizations must file IRS Form 990EZ or IRS Form 990. Private Foundations are required to file IRS Form 990-PF. File IRS Form 990-N with Nonprofit Elite Nonprofit Elite can assist you with preparation of IRS Form 990-N only. Give us a call today: 800.268.4388. [...]
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 be more involved in checking in with applicants during the Form 1023-EZ review process. To date, we have noticed more instances where the IRS requests copies of the applying organization's formation documents, narrative description of activities, and three years of projected financial budgets. If you are beginning the 501c3 application process yourself, or have questions about which form (and user [...]
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 applicants, and the IRS is promising a significantly faster review process and response rate than the traditional 6-12 months. If your new nonprofit organization is eligible to file this new IRS Form 1023-EZ then it is almost certainly in your best interest to do so. Otherwise, filing the traditional IRS Form 1023 could cost you significantly more time and money - up to $1500 [...]
Congratulations to Nonprofit Elite client (CT) Phoebe's Phriends who recently received their approved IRS Letter of Determination. This is a wonderful organization that raises money for Pediatric Cancer Research, and they are doing a great job! And for anyone curious, the IRS review process took approximately eight months for this application, which is unfortunately pretty normal during these past few months.
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.
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.
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.