Trying to Become Tax-Exempt? A New Interactive Tax Form Attempts to Streamline the Process

If you have tax-exempt status, or are currently wondering if you can qualify, a new interactive i1023 Tax Exemption form (Form 1023) is now being offered by the IRS. This form is expected to provide additional information to applicants via links and pop-up boxes so as to facilitate the application process and provide greater details regarding the exemption.

But the IRS Exempt Organizations division (“EO”) hasn’t quite entered the digital age, as the new i1023 interactive form will still require a final print-out version to be submitted in hard copy. So, you’re asking, what’s the point of an online form that you still need to print? The EO expects the new interactive form to have the following benefits:

  • Applicants will have the ability to submit a more complete form with more detailed information at their fingertips.
  • Processing time for the applications at the IRS will be reduced due to a decrease in the amount of follow-up requests for missing or incomplete information.
  • Applicants can expect to receive a tax-exemption determination letter in a more timely fashion.

On a related note, remember that tax-exemption applies at the federal level, while Not-For-Profit applies to individual state law in which you are filing. Not all Not-For-Profit companies are tax-exempt. To learn more about Not-For-Profit status, be sure to speak with the team at Katz Abosch about the details, especially since one of our specialties is Not-For-Profit tax services. Furthermore, if you think you might be able to qualify for Tax Exempt status, make yourself familiar with IRS Publication 557 (2011).

Prepared by, Michael J. Agetstein, CPA, PFS, Shareholder and Chair of the Tax Department.

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