June 23, 2015 in News, Non-Profit Commentary

Accelerated IRS Review of Tax Exempt Applications

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IRS efforts to accelerate review of tax exempt applications appear to be paying off. One recent report suggests the backlog, which once exceeded 60,000 pending applications, is now current. At one time, it was not unusual for an organization to wait nearly a year before receiving any inquiries about its application.  This is no longer the norm. I have noted, with much pleasure, that the tax exempt applications we’ve worked on recently are receiving much prompter initial reviews and final determinations.

Most recently, an application this office submitted on behalf of a small nonprofit committed to bringing musical entertainment to hospitalized children set new internal record for regular application reviews. (By regular, we mean it was not accompanied by a special request for expedited review which has always been available for rapid tax exempt confirmation in exigent circumstances.) In this case, the organization’s 501c3 status was confirmed within 5 weeks of filing the application. Previously, at 5 weeks in, most applications would not even have received confirmation that they had begun to be reviewed by IRS examiners.

Contributing to the accelerated review periods are increased applications options available for smaller organizations, including the new online 1023-EZ application for the smallest organizations.

If your organization is considering applying for its 501c3 tax exempt status, contact Zak Shusterman to discuss the options available to you.