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status before issuing permits or exemptions. Each agency has its own
rules, which may not provide exceptions for churches and small
organizations. Such organizations might have to apply for 501(c)(3)
recognition to satisfy other governmental agencies.

y Failing to apply for tax-exempt status can sometimes undermine an
organization’s credibility with the press or the public. Obtaining
501(c)(3) recognition may be an important part of the image it wants to
convey.

y An organization that expects to have employees can save a small
amount of payroll taxes by applying for 501(c)(3) recognition, because
it is exempt from federal unemployment tax.

CHAPTER 23. Applying with the Form 1023EZ

a. General Information about the Form 1023EZ

The IRS has provided a new Form 1023 for small organizations, called the
Form 1023EZ. It is a simplified form for organizations that meet the certain
eligibility requirements. The application is made online through the IRS website.
You must register for a Pay.gov account and pay the application fee of $275 by
credit or debit card or bank account payment. The form must be filed within 27
months of the organization’s incorporation date.

b. Eligibility to use Form 1023EZ:

To meet the threshold eligibility requirements, the organization must:

y Have annual gross revenue of $50,000 or less; and

y Have assets of $250,000 or less.

The Instructions for Form 1023EZ contain an eligibility worksheet, located at
the back of the instructions. The worksheet should be completed by hand before
completing the Form 1023EZ. The responses to the worksheet questions will
determine whether the organization will qualify to apply for tax-exemption using
the Form 1023EZ.

The following organizations do not qualify:

y Foreign organizations

WASHINGTON NONPROFIT HANDBOOK -70- 2018