Understanding the User Fee for Form 1023

As a non-profit organization, applying for tax-exempt status under section 501(c)(3) of the Internal Revenue Code, you will need to file Form 1023. Along with completing the necessary paperwork, you will also need to include the user fee for Form 1023.

What Form 1023?

Form 1023 is the official application for recognition of exemption under section 501(c)(3) of the Internal Revenue Code. It is used by organizations seeking tax-exempt status to prove that they operate exclusively for one or more exempt purposes, such as charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.

User Fee Form 1023

The user fee for Form 1023 varies depending on the organization`s annual gross receipts. As 2021, user fees as follows:

Annual Gross Receipts	User Fee
$10,000	$600
exceeding $10,000	$275

Importance User Fee

The user fee for Form 1023 is crucial for processing the application and determining the organization`s eligibility for tax-exempt status. The fee helps fund the necessary resources and personnel to review and analyze each application, ensuring that only qualified organizations receive tax-exempt status.

Case Study: The Impact of User Fees

Non-profit organization XYZ, with annual gross receipts exceeding $10,000, submitted Form 1023 along with the required user fee of $600. After thorough review, the organization was granted tax-exempt status, allowing them to receive donations and operate without paying federal income tax.

Understanding the User Fee for Form 1023 essential non-profit organizations seeking tax-exempt status. By providing the necessary fee and completing the application accurately, organizations can increase their chances of receiving tax-exempt status and further their mission to make a positive impact on society.

 

Everything Need Know User Fee Form 1023

Question	Answer
1. What is the user fee for Form 1023?	The user fee for Form 1023 is the amount an organization must pay to have the IRS process its application for tax-exempt status. As of 2021, the user fee for Form 1023 is $600 for most organizations. However, certain organizations may qualify for a reduced fee of $275 if their annual gross receipts are $50,000 or less. Fee nonrefundable must paid online Pay.gov website.
2. Are exemptions user fee Form 1023?	Yes, exemptions user fee Form 1023. Organizations that are applying for recognition of exemption under section 501(c)(3) and are requesting a determination letter are exempt from the user fee if they meet certain criteria. These criteria include having annual gross receipts that are normally not more than $5,000 and having assets that are normally not more than $50,000.
3. Can the user fee for Form 1023 be waived?	No, user fee Form 1023 waived. The IRS requires all organizations to pay the applicable user fee in order to process their application for tax-exempt status.
4. How pay user fee Form 1023?	The user fee Form 1023 paid online Pay.gov website. Payment can be made using a credit or debit card, electronic funds withdrawal, or through the Electronic Federal Tax Payment System (EFTPS).
5. Can the user fee for Form 1023 be deducted as a business expense?	No, the user fee for Form 1023 cannot be deducted as a business expense. The IRS considers the user fee to be a non-deductible personal expense.
6. What happens if I can`t afford to pay the user fee for Form 1023?	If an organization is unable to afford the user fee for Form 1023, it may qualify for a reduced fee of $275 if its annual gross receipts are $50,000 or less. If the organization still cannot afford the reduced fee, it may consider reaching out to a legal or financial professional for assistance.
7. Is the user fee for Form 1023 refundable if my application is denied?	No, the user fee for Form 1023 is nonrefundable, regardless of the outcome of the application. This fee covers the IRS`s processing costs and is not returned to the organization if its application for tax-exempt status is denied.
8. Can the user fee for Form 1023 be paid in installments?	No, user fee Form 1023 paid full time application submitted. The IRS requires full payment of the user fee in order to begin processing the organization`s application for tax-exempt status.
9. How often does the user fee for Form 1023 change?	The IRS periodically updates the user fee for Form 1023 to account for changes in processing costs and inflation. Organizations should consult the most recent version of the IRS instructions for Form 1023 to determine the current user fee amount.
10. Is the user fee for Form 1023 tax-deductible?	No, the user fee for Form 1023 is not tax-deductible. The IRS considers the user fee to be a non-deductible personal expense, cannot included business expense organization`s tax return.

 

Form 1023 User Fee Agreement

This agreement (the “Agreement”) is entered into by and between the Internal Revenue Service (the “IRS”) and the user of Form 1023 (the “User”). This Agreement shall govern the user fee for Form 1023 and the terms and conditions related thereto.

Section 1 – User Fee	The User agrees to pay a user fee for Form 1023 as set forth in the IRS Rev. Proc. 2019-5. The current user fee for Form 1023 is $600 for organizations with gross receipts that do not exceed $10,000 annually in the prior four years, or $275 for organizations with gross receipts that exceed $10,000 annually in the prior four years. The user fee is non-refundable and must be submitted with the Form 1023 application.
Section 2 – Payment Terms	The User shall submit the user fee payment using the methods prescribed by the IRS, including but not limited to check, money order, or electronic payment. User fee payment must made payable “United States Treasury” include User`s name, address, EIN (if assigned).
Section 3 – Amendments	The IRS reserves the right to amend the user fee for Form 1023 at any time. Any changes to the user fee will be communicated through official IRS channels, and the User agrees to comply with any amended user fee requirements.
Section 4 – Governing Law	This Agreement shall be governed by and construed in accordance with the laws of the United States and the regulations set forth by the IRS pertaining to user fees for Form 1023.
Section 5 – Acceptance	The User acknowledges and agrees to the user fee requirements set forth in this Agreement by submitting Form 1023 and the required user fee payment to the IRS. By doing so, User bound terms Agreement.