In December 2017, the IRS released the new 1023 Application for Recognition of Exemption (often referred to as the “1023”): the form by which nonprofits can apply for 501(c)3 tax-exempt status. The new 1023 application is substantially similar to the old December 2013 version, but there are still changes worth paying attention to—the update is good news for people applying because it reduces the filing price and cuts unnecessary sections. Below is a helpful chart with the sections of the application that were changed, the nature of the change, and the impact that each change has. Find the new application here.
|Notice 1382||Taken out||No real impact.|
|Part 1, Section 12||Adds line for foreign country||Makes it easier to write in.|
|Part IX Section A||The instructions are better formatted||Makes it easier to distinguish what new non-profits (<5 years) are required to input versus what 5+ year old non-profits input.|
|Part IX Section B||Rearranged formatting||Makes it easier to see which items line up with the text blocks.|
|Moved Part X, Section (g) to Section (h)||Formatting and lettering changed for new category and added new agricultural research organization option||Included Section 5(g) for “509(a)(1) and 170(b)(1)(A)(ix) – an agricultural research organization directly engaged in the continuous active conduct of agricultural research in conjunction with a college or university.”
No major impact, but it does add a new category for applicants.
|Part IX, Section 6||Cut out the old version where it requested the IRS make a determination and added a simpler format for 5+ year old nonprofits to enter and confirm the organization’s public support status||This is a departure from the previous version, as before it did not allow you to enter your own information in Section 6.
The new form now makes it easier for those required to confirm their public support status to do so, as they can enter the organization’s answer on the form themselves.
|User Fee Information||Changed the fee from $850 to $600||Saves applicants money! However, you do have to look up the fee amount. This could signal that it makes it easier for the IRS to update the fee online without notice.|
The article provided above is for general information purposes only and should not be relied on as specific legal advice. This article does not form an attorney-client relationship. If you have any questions or would like to hear more about how Apex can help you with the 1023 form, please contact Tara Vitale at firstname.lastname@example.org.