Many organizations with a non-profit status face huge roadblocks on the path to tax-exempt status. Some organizations complain that during the exemption process, their applications seem to get lost in Internal Revenue Service (IRS) purgatory.
This may not have to be the norm any longer. The IRS has attempted to simplify the process with a new application that makes it much easier for certain organizations to gain tax-exempt status.
“This month, the IRS introduced a new application that makes getting tax-exempt status not much more complicated than ordering a pizza online. What was once a 26-page form has been cut down to three, and groups will now only have to pay a $400 fee rather than $850 to apply. Not all would-be nonprofits will be eligible for the streamlined process: The new form is only open to groups with annual income of less than $50,000 and assets of less than $250,000.” wrote Justin Ellis of the Neiman Journalism Lab.
While this may seem like low income and operating costs for a non-profit organization, the IRS projects that about 70 percent of the groups that apply for 501(c)(3) status will qualify. “And with the greater ease of use will come less government oversight: Some groups, such as the National Council of Nonprofits and the National Association of State Charity Officers, say the streamlined process is an invitation for groups to abuse tax-exempt status,” writes Ellis.
As it stands, the IRS has said they have 60,000 pending applications, with most of those pending for at least nine months. Due to the amount of criticism, the IRS received because of the 501(c)(3) pending applications, they decided to develop a new process for approval.
“The idea behind the new application is to help small nonprofits avoid that tax-exempt purgatory and to help an IRS with less resources. According to IRS Commissioner John Koshinen in an interview with Time, the change will mean the division that reviews tax-exemption requests will see 40,000 to 50,000 fewer applications,” writes Ellis.
If you or someone you know is seeking tax-exempt status, it is best to contact a tax specialist. If you have had tax debts in the past, you will need to meet with a tax resolution lawyer. The attorneys at U.S. Tax Shield can help you get your tax financial reputation and records back on track in no time. Our A+ Better Business Bureau (BBB) rating is just one example of U.S. Tax Shield’s reputation.