Going Paperless: IRS Requires Online Submission of Form 1023

The IRS announced last week that all Form 1023 applications for tax-exempt status under Section 501(c)(3) must be filed electronically beginning January 31, 2020—though there is a grace period of 90 days in which it will continue to accept paper applications. While the short-form 1023-EZ has required electronic submission for several years, this is a major change regarding the full Form 1023.

The Form 1023 must be filled out electronically on www.pay.gov, and applicants will need to create a separate pdf to upload that contains their organizing documents (e.g., articles of incorporation), bylaws, power of attorney form, supplemental materials, and a request to expedite (if applicable). The pdf file cannot exceed 15 MB. The $600 application fee that must be paid when submitting the form will also need to be paid through www.pay.gov—acceptable payment methods include bank account and credit or debit card.

In a statement that accompanied Revenue Procedure 2020-8, Tammy Ripperda, Commissioner of the IRS Tax Exempt and Government Entities Division, said that filing electronically “reduces errors, and we believe this will help provide a smoother application process for those seeking tax exemption.” Ms. Ripperda also stated that the new requirement is in an effort to process applications more quickly. Commentators suggest that the change is in response to the fact that the IRS has come under heavy criticism in recent years for the length of time it takes to process applications, sometimes taking as long as nine months to a year.

For more information see: https://www.irs.gov/forms-pubs/about-form-1023

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