IRS Catches Up on Exemption Application Processing

October 29, 2014 Posted by Jessica Shofler in IRS, News, Nonprofits

exemptionHas your organization been waiting a long time for its IRS exemption? If so, you may be hearing back soon. Last week Matthew Weir, director for the IRS Tax-Exempt and Government Entities Division, reported that this year the unit has closed 117,000 exemption applications, a 121% increase from last year. Weir pointed out that everyone should be especially impressed given that the IRS’s budget for 2014 was $1 billion less than it was in fiscal year 2012.

Weir also stated that the IRS believes that the new streamlined exemption application (Form 1023-EZ) has been a success. He reported that the IRS has closed most of the streamlined applications in about 11 days with 95% of the applications being approved.

It’s unclear though whether or not this should actually be considered a success. There are ongoing concerns in the exempt organizations sector that the streamlined application may be allowing undeserving organizations to obtain recognition of exemption. Acknowledging these concerns, Weir said that the IRS is planning to use a “pre- and post-determination process” involving correspondence exams to more closely review a sample of applications.

Did your organization file a Form 1023-EZ? What do you think of the new form?

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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