IRS Streamlines Tax-Exempt Application Process for Most Charities

The Internal Revenue Service has recently released a new tax form to help small charitable organizations apply for tax-exempt status. Form 1023-EZ, introduced in July 2014, provides an alternative to the longer Form 1023 and will allow the IRS to more efficiently process applications for 501(c)(3) tax-exempt status.

From the IRS news release:

The new Form 1023-EZ, available today on IRS.gov, is three pages long, compared with the standard 26-page Form 1023. Most small organizations, including as many as 70 percent of all applicants, qualify to use the new streamlined form. Most organizations with gross receipts of $50,000 or less and assets of $250,000 or less are eligible.

"Previously, all of these groups went through the same lengthy application process -- regardless of size," [IRS Commissioner John] Koskinen said. "It didn't matter if you were a small soccer or gardening club or a major research organization. This process created needlessly long delays for groups, which didn’t help the groups, the taxpaying public or the IRS.”

The change will allow the IRS to speed the approval process for smaller groups and free up resources to review applications from larger, more complex organizations while reducing the application backlog. Currently, the IRS has more than 60,000 501(c)(3) applications in its backlog, with many of them pending for nine months.

To determine if your organization qualifies to file the new form, review the Form 1023-EZ Instructions and Revenue Procedure 2014-40, as well as consult an attorney. Form 1023-EZ must be filed online and requires a user fee of $400.

Nonresident Commercial Real Estate Brokers

Ohio law requires a real estate broker’s license before an individual or entity can sell, rent, lease, or manage property in return for a fee. However, an important exception does exist for commercial real estate brokers who are located outside the state.

Ohio Revised Code 4735.022 permits an out of state broker who is actively licensed in another state to act as a broker in Ohio without obtaining a license if certain conditions are met. The out of state broker may act as a broker in Ohio if it works in cooperation with a licensed Ohio broker.

The two parties must sign a written agreement detailing the terms of cooperation, and the out of state broker must agree to follow Ohio law, submit to the jurisdiction of Ohio courts, and provide an out of state certificate of good standing. Documents and trust funds must be held by the Ohio broker, and importantly, the name of the Ohio broker must be included on all advertising.

The Ohio Association of Realtors has more information on the topic, as well as a sample agreement.