The purpose of Form Instructions 1023-EZ is to provide guidance and information to organizations that wish to apply for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Here are some relevant content points explaining its purpose:
1. Streamlining the Application Process: The Form 1023-EZ was created by the Internal Revenue Service (IRS) to simplify the application process for smaller, less complex organizations seeking tax-exempt status. The purpose is to make it easier for eligible organizations to apply, reducing the administrative burden and processing time compared to the longer and more complex Form 1023.
2. Eligibility Criteria: The instructions outline the specific criteria that an organization must meet to use Form 1023-EZ. This includes requirements such as having projected annual gross receipts below a certain threshold, total assets below a specified limit, and meeting other specific qualification criteria.
3. Required Information: The instructions provide guidance on the information and documentation that organizations need to provide in the Form 1023-EZ application. This includes details about the organization's purpose, activities, governance structure, compensation, financial records, and more. The instructions aim to ensure that the necessary information is collected to evaluate the organization's eligibility for tax-exempt status.
4. Fee Waiver Eligibility: The instructions explain the possibility of a reduced user fee or fee waiver for eligible organizations. This information helps smaller organizations facing financial constraints to apply for tax-exempt status without excessive financial burden.
5. Compliance Responsibilities: The instructions emphasize the ongoing compliance responsibilities of tax-exempt organizations, even after they receive a determination letter granting tax-exempt status. They outline the reporting requirements, such as annual filings on Form 990 or 990-EZ, maintaining records, potential audits, and consequences of non-compliance.
6. Additional Resources: The Form 1023-EZ instructions also provide references and links to other IRS resources, such as publications, forms, and online guidance. These resources offer further assistance and clarify any uncertainties related to the tax-exempt application process and ongoing compliance obligations.
By providing clear instructions, eligibility criteria, and supporting resources, Form Instructions 1023-EZ aims to facilitate the process of obtaining tax-exempt status for eligible organizations, particularly smaller ones, while ensuring compliance with relevant regulations.