IRS Finalizes Electronic Form 1023 to Apply for Exempt Status and Publishes 2020 Year User Fees

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By: Matthew Rak, Esq.

Electronic Form 1023 Open, Paper Filing to End April 30, 2020

On January 31, 2020 the IRS issued Revenue Procedure 2020-8 updating the procedure for Exempt Organizations applying for recognition of tax-exempt status using Form 1023. This new procedure requires that exempt organizations file Form 1023 electronically and eliminates paper filing of Form 1023 beginning January 31, 2020. The IRS concurrently updated Form 1023 Instructions which are coordinated with the new electronic application. The new instructions are available here: https://www.irs.gov/pub/irs-pdf/i1023.pdf.

Previously, the IRS had opened an electronic system for filing Form 1023-EZ for small exempt organizations. This program has been expanded to include all Form 1023 filings and eliminated the earlier eligibility limits for electronic filing. Electronic applications for both forms must be submitted through www.pay.gov.

While the procedure is immediately effective, there is a transition period allowing paper filing or electronic filing for 90 days following the effective date. Therefore, the final date to paper file Form 1023 is April 30, 2020. Because the new electronic application requires different information than paper filing, applicants in the process of preparing Form 1023 should strive to apply by paper prior to the April 30, 2020 deadline to streamline preparation.

2020 User Fees

For 2020, the User Fees remain unchanged at $600 for Form 1023, and $275 for Form 1023-EZ.

If you have any tax compliance questions for your exempt organization, please contact Matthew Rak or another member of our Nonprofit Organizations team.

Matthew Rak is a Partner with Leech Tishman and a member of the Estates & Trusts, Taxation, and Energy Practice Groups, as well as the Nonprofit Organizations Team. Matt is based in the firm’s Pittsburgh office and can be reached at 412.261.1600 or via email at mrak@leechtishman.com.

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