LIHTC Alert: Simplified Accounting for Investments in Qualified Affordable Housing Projects

LIHTC Alert headerThe Internal Revenue Service has recently issued a draft version of Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.  The new form is a simplified version of Form 1023, and is intended to reduce the information reporting burden on both the IRS as well as taxpayers applying for tax-exempt status.  By reducing reporting requirements, the IRS hopes to get charities up and running more quickly than the current ten-twelve month delay in processing these applications.

The abridged three-page form allows taxpayers to attest to the fact that they meet organizational and operational tests for tax-exempt status, and is to be used by organizations with projected annual gross receipts of less than $200,000 and total assets not exceeding $500,000.  For larger organizations that do not qualify to use the simplified form, the twenty-five page Form 1023 is still required to be filed in order to apply for tax-exempt status.

Public comments on draft Form 1023-EZ were accepted through April 30, 2014, and the IRS expects that the finalized form and instructions will be available for use by mid to late summer.

Please contact your Wilkin & Guttenplan advisor if you have any questions or would like additional information.

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