In continuing its efforts to better serve the needs of small non-profits (previously discussed here), the IRS has decreased application filing fees for the smallest organizations.  In the past, many small non-profits that might otherwise have qualified for an exemption under 501(c)3 chose not to apply for the exemption, determining that the filing fees, legal fees and time commitment required to prepare the application (Form 1023) were not worth the effort.  Just last year, a new online application (Form 1023-EZ) was made available to small non-profits meeting several criteria.

As of July 1, 2016, organizations that meet the conditions for applying using Form 1023-EZ will now also pay a lower filing fee of $275. Previously, the filing fee for Form 1023-EZ was $400, which matched the fee for small organizations using the standard paper application.  The fees for filing the standard paper Form 1023 application remain the same: $400 for small organizations meeting certain financial limits; $850 for all other organizations.

Don’t forget that all small organizations, whether or not they applied using the Form 1023-EZ, are eligible to make their annual filing using the Form 990-N.

If you are unsure which version of Form 1023 your organization is eligible for, or wish to discuss other annual reporting and compliance requirements, feel free to contact Zak Shusterman directly.