On June 30, 2017, the IRS issued final regulations regarding the streamlined process of applying for recognition of Internal Revenue Code Section 501(c)(3) status. The final regulations replace proposed regulations that have been in place since 2014. The streamlined application process allows smaller organizations to apply for tax-exempt status more quickly by filing Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Form 1023-EZ has been available since July 2014.
In general, the streamlined application process allows eligible small organizations to request tax-exempt status more quickly and cost effectively by using Form 1023-EZ as opposed to the more detailed Form 1023 application. In turn, the IRS response time for issuing a determination letter recognizing exempt status is much quicker for Form 1023-EZ filers, and the user fee to file the form is lower. In addition, the EZ form relies on attestation by the organization that it meets §501(c)(3) requirements as opposed to the lengthy Form 1023 documentation requirements.
The final regulations were issued with no substantive changes to the proposed regulations issued in July 2014. Because there were no substantive changes to the proposed regulations, the final regulations apply on or after July 1, 2014, the applicability date of the proposed regulations.
For questions regarding the final regulations or related issues, contact your BKD advisor.