The IRS made life a bit easier last year for new nonprofit organizations by requiring that all Form 1023 filings be made electronically through the online platform Pay.gov.

The online Form 1203 application is substantially similar to the old paper version with the following changes:

  • The online form is 40 pages including the schedules and requires several attachments to be submitted as one pdf file.
  • Applicants must now include a National Taxonomy of Exempt Entities (“NTEE”) code that best describes the organization. The list of NTEE codes is provided in Appendix D to the newly revised Instructions for Form 1023.
  • Additional information is requested related to compliance with the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury.
  • 501(h) Election: Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures to Influence Legislation, is no longer submitted with Form 1023 and instead must be separately mailed to the IRS.
  • The user fee is $600 and gets paid through Pay.gov when submitting the form.
  • To satisfy the electronic signature requirement, the applicant may include a copy of the handwritten signature of the officer, director, or authorized representative whose name is typed into Part X of the Form 1023 in the pdf file it uploads as part of its application.

The online Form 1023 will not permit applicants to move to the next page until they have completed all of the questions on the current page, including entering required descriptions and explanations, or completing schedules. One goal for the online Form 1023 is that the new system will reduce errors and incomplete filings while also reducing processing times in the same way that Form 1023-EZ did for smaller nonprofits.

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