Giving Back: It’s Never Been Easier

Gretchen Ross-1By Gretchen Ross, CRTP

Getting tax exempt status has been a real stumbling block for many small charities.  This past July, the IRS made it easier to become a 501(c)(3) charity.  In the past, the IRS required all charities to fill out a confusing 26 page form to apply for tax exempt status and then wait for months to hear back if the status has been granted.  There is now a new form, the 1023-EZ, which is only two and a half pages long.
To qualify to use the new form, the organization must have less than $50,000 in gross receipts and assets of less than $250,000.  The form can only be filed electronically at the website www.pay.gov.  The idea behind this streamlined application to speed up the process.  The cumbersome forms that larger organizations must fill out are very time-consuming for the IRS to review and in the past have created great backlogs.
Just because it is easier to become a non-profit does not mean that the organization does not need to pay attention to record keeping.  Watch that you do not mix prohibited transactions.  Also make sure your organization meets all the exemption requirements which are outline on the IRS.gov website.
There are annual tax filing requirements as well.  Those too have been streamlined in the recent past for small organizations with gross revenues of less than $50,000–a simple form can be filed on line for both the IRS and the California Franchise Tax Bureau at no cost to the organization.
So, if you have been wanting to start up a soccer club or get tax exempt status for your gardening club, it is now easier than ever.

Gretchen Ross has been preparing taxes since the 1993 tax season.  She and her husband, Mike Foster, CPA, run Central Coast Tax Professionals in Morro Bay.  Together, they provide personalized attention to their clients.  They have over 50 years of combined experience in helping people prosper.  Gretchen has her BA in International Studies, has run various businesses and has been involved in many aspects of real estate from development to management.  You can read past articles on her blog at www.cctaxpros.wordpress.com