Join The NonProfit Times: or Become a member

Subscribe: Print Publication or Newsletter

Stay connected.
Stay informed.

Live From AICPA: IRS Readying Shorter Application Form

By Mark Hrywna - June 13, 2014

The Internal Revenue Service (IRS) plans to release a shorter version of its application for tax-exemption (Form 1023 EZ) within the next month and reduce the backlog of the longest applications by the end of the fiscal year.

Tamera L. Ripperda, director, exempt organizations, in the Tax Exempt Organizations Division of the IRS, provided the update during a session at the AICPA Not-For-Profit Industry Conference yesterday in Washington, D.C. (The conference hashtag is #AICPAnfp)

Based in the agency’s Cincinnati, Ohio offices, Ripperda oversees some 900 employees in the Exempt Organizations division. She was appointed earlier this year, replacing interim director Ken Corbin, who succeeded Lois Lerner.

The division consistently received more than 60,000 applications annually and that number has been edging toward 70,000 in the last two to three years, Ripperda said. “Clearly, we’re getting lot of incoming work coming in. For quite some time, we’ve been receiving more incoming applications than we’ve been able to close outgoing. That’s what’s led to the buildup of applications,” she said. About 80 percent of applications are for 501(c)(3) organizations.

There has been a continuing rise in applications received since 2010 while at the same time staffing continued to drop, though it has leveled off, Ripperda said. Staffing within the division approached 1,000 in 2009, but today is closer to 800.

A significant cause of the increase is likely from the auto-revocation provision within the Pension Protection Act (PPA) of 2006. Ripperda said about 550,000 organizations were auto-revoked and of those about 50,000 have come back for reinstatement.

“The provision did accomplish what it set out to do: Clear out those organizations that were on records but no longer in existence,” she said.

The agency is concentrating on the oldest cases and the goal is to have little or no “application inventory” older than 270 days at the end of the fiscal year, Ripperda said.

A shorter version of Form 1023, the application for tax-exemption, was released earlier this year, with a public comment period during the spring.

In comments submitted to the Office of Management and Budget (OMB), the National Council of Nonprofits raised concerns about the new Form 1023-EZ and the streamlined approval process of tax-exemption. Specifically, the organization believes the proposal would “decrease rather than improve the quality of information the IRS needs to make informed decisions, reduce public trust and inappropriately shift the IRS’ obligations onto others – foisting burdens on the public, existing charitable nonprofits, the funding community, and state charity regulators.”

You can see the full comments here.

“The thinking behind that was to get the minimal information that’s absolutely needed to determine whether to qualify for exempt status. That’s what the form is geared toward,” she said. “I believe we’ve structured something without increasing the risk level of an inappropriate determination being made.”

“We continue to look at the form and consider whether it’s ready for primetime,” Ripperda said, taking into account comments from the community and risk levels. The shorter 1023 EZ is about two-plus pages compared with the existing 26-page application.

“We recognize that this is the first shot at it, it may not be perfect the first time,” Ripperda said.

Podcast_forHub_500x500

Sponsored Podcasts

Welcome to the Raise & Engage podcast, a filters-off series for nonprofit professionals hosted by Blackbaud's straight-shooting expert Danielle Johnson Vermenton. During this open-mic session, you’ll hear honest advice to help YOU do more for your cause.

Episode 6: The Power of ‘No’ at Work|| daniellejohnson-76

You have a job description, but on any given day, you're probably doing dozens of things outside the scope of that description. Combine that with the challenge of a fast-paced environment and the shifting priorities of funders, colleagues, and board members and it’s easy to fall short of doing your best. By being mindful of your limitations and capacity—and saying “no” when your plate is full—you can actually do more for your cause. In the sixth installment of the Raise and Engage podcast Danielle Johnson and Robin Anderson discuss the power of saying “no” at work.

Episode 5: Professional Development: Getting Un-Stuck|| daniellejohnson-76

In the most recent episode of Raise + Engage, Danielle is back with Brian Reich from little m media to discuss how nonprofit professionals can stay motivated and energized in their day-to-day roles. Brian shares his experience working with nonprofits and the lessons and tips he's learn from and shared with them over the years, including tips for avoiding a professional rut, creating forward momentum in your career and pushing yourself outside of your comfort zone. If you're considering making a career move or want to ensure you're on the right path, you won't want to miss this inspo-packed episode!

Episode 4: Apps and Hacks to Stay (Mostly) Sane || daniellejohnson-76

Episode 4: Apps and Hacks to Stay (Mostly) Sane, is all about tips, tricks and tools for sanity. Blackbaud’s own interactive product marketer, Julia Lenz, joins host Danielle Johnson to share some high tech. (and no tech.) productivity tips to help nonprofit professionals stay sane in the crazy world of philanthropy.

Tune in to hear:

  • Tips for how to spend the first 30 minutes of your day
  • The benefits of 15 minute meetings
  • Why notebooks are still relevant to a successful organization
  • Ideas for better managing your inbox
  • Why you should take lunch outside the box
  • ...and much more!
Don’t forget to visit the #NoFilterNonprofit Hub afterwards to download our newest tip sheet10 Productivity Hacks for Nonprofits.

Episode 3: Tech. Connection: Solutions, Strategy, and Staff || daniellejohnson-76

Episode 3: Tech. Connection: Solutions, Strategy, and Staff In episode 3 of the Raise + Engage podcast, Danielle Johnson is joined by Chris Geady and William DaSilva, two IT experts in the nonprofit space, to talk technology integration for NPOs: when you need it, when you don’t, and how to do it successfully.


Tune in to hear:

  • When to say NO to integration
  • How to set your strategic plan before even looking at technologies
  • Ways to get your entire team on board
  • The importance of identifying a project lead
  • The RFP process - how it should and should not go
And William shares a story about a nonprofit that may or may not have still been using a typewriter. You don't want to miss this one!

Episode 2: From Socially Awkward to Socially Awesome! || daniellejohnson-76

According to Danielle Johnson, straight-shooting host of the Raise + Engage podcast series, if your staff members aren’t the number one advocates for your cause on social media, you’re failing. In the most recent episode, Danielle is joined by Blackbaud’s own social media guru Madeline Turner to discuss overcoming social struggles and creating a social ambassador program at your organization. This entertaining and insightful duo dishes on the importance of making your social media presence human, making the case for a formal social program to leadership, how University of Michigan turned a one time social media campaign into a long term social program, and how Madeline's mom unknowingly became a social ambassador on #GivingTuesday.

Episode 1: Corporate Culture & Development: Shake It Up! || daniellejohnson-76

In the premiere episode of Raise & Engage, Danielle is joined by three straight-shooting nonprofit rock-stars: Jodi Smith of Sanford Health Systems, Veronica Brown of Chicago Public Library Foundation and Ali Burke of Southlake Regional Health Centre Foundation. The group talks organizational culture, problem employees, why its important to celebrate and how to shake things up this year and build a better more authentic team that gets stuff done!

Newsletters

Stay informed, catch latest trends in the nonprofit space.

Subscribe to Our Free Newsletter

No obligation, unsubscribe at anytime.

Success! Check your email inbox.

Follow Us On Twitter

NPT 2016 Buyers' Guide

Newsletter Sign-up



click here to return to the previous page