IRS Filing Costs to Form an Nonprofit to Decrease

Currently if you wish to form a nonprofit you are looking at a filing fee of $850 from the IRS, not to mention incorporation fees, legal fees, and accounting fees to assist you with completing the many questions on the Form 1023. If all goes well, you receive your approval. If not, you may receive correspondence from the IRS asking for more details and information. It appears this process will improve in 2010.

Later in 2010, the IRS will be coming out with Cyber Assistant. Applicants who use this online system will only have to pay an application fee of $200. The online application process will probably insure that the form is completed properly and increase the likelihood of approval the first time around. It should also reduce the need for accounting or legal assistance in completing the application.

Direct from the IRS site....

Cyber Assistant, a web-based software program designed to help organizations prepare a complete and accurate Form 1023 application, will become available during 2010. Once the IRS announces the availability of Cyber Assistant, the user fees will change again. 1. $200 for organizations using Cyber Assistant (regardless of size) to prepare their Form 1023, or 2. $850 for all other organizations not using Cyber Assistant (regardless of size) to prepare their Form 1023. IRS will announce when Cyber Assistant is available and the effective date of the user fee change. Sign up for the Exempt Organization (EO) Update, EO’s subscription newsletter, at www.irs.gov/charities, to automatically receive an alert that Cyber Assistant is available.