Hunton Law

Legal Counsel for Nonprofit & Tax-Exempt Organizations

Legal Counsel for Nonprofits, Foundations & Social Enterprises

IRS Form 1023-EZ

Since July 2014, applicants seeking Section 501(c)(3) status have had the option of using a short-form e-version of the federal tax exemption application, or IRS Form 1023-EZ.  Form 1023-EZ is intended to streamline the application process for very small organizations.  At first glance, the form appears to be an exciting way to obtain expedited approval of tax-exempt status; however, applicants need to know that the form is only available to those organizations whose actual and projected gross annual revenues will not exceed $50,000.  In addition to meeting the revenue threshold requirement, applicants must meet all other eligibility requirements, as listed in the Form 1023-EZ Instructions.  Many applicants who have used Form 1023-EZ have experienced shorter wait times between submitting the electronic filing and receiving a favorable determination letter.  That said, applicants need to know that streamlined, expedited processing is not guaranteed, and the IRS may contact applicants for additional information, resulting in longer processing times.  The IRS has also stated that it will select a statistically valid random sample of applications for pre-determination reviews, which may also result in longer processing times.