The IRS announced Friday that, effective Jan. 31, 2020, applications for tax-exempt status under Sec. 501(c)(3) must only be submitted electronically (Rev. Proc. 2020-8). Taxpayers will no longer be able to file Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, on paper, but must complete and submit the form through Pay.gov. However, under a transition rule, the IRS will accept for processing a completed paper Form 1023 accompanied by the correct user fee, if the submission of the paper form is postmarked on or before 90 days after Jan. 31.
To submit Form 1023, a taxpayer will need to:
1. Register for an account on Pay.gov;
2. Enter "1023" in the search box and select Form 1023; and
3. Complete the form.
An electronic submission requirement has applied to Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, since 2014. The Form 1023-EZ streamlined application process is available for U.S. organizations with assets of $250,000 or less and annual gross receipts of $50,000 or less.
— Dave Strausfeld, J.D., (David.Strausfeld@aicpa-cima.com) is a JofA senior editor.