IRS Told to Speed Up Applications for Nonprofit Status

July 09, 2008

IRS Told to Speed Up Applications for Nonprofit Status

The Internal Revenue Service has made progress in improving the speed at which it processes applications by groups seeking tax-exempt status.

But Nina E. Olson, the national taxpayer advocate, says the agency still is not moving fast enough.

Ms. Olson, who operates independently of other IRS offices and reports to Congress, said in a new report that she plans to work with the IRS’s tax-exempt and government-entities division to change the way the agency processes applications for nonprofit status.

To qualify as a tax-exempt organization, groups must file Form 1023, which includes information about a group’s proposed activities and operations.

Because of the number of applications it receives, the IRS has been slow to keep up with processing the Form 1023 — leading to lengthy delays for groups that are awaiting a ruling on their nonprofit status.

Ms. Olson said in her report to Congress that the IRS reduced its applications backlog by 55 percent as part of an effort to reduce these delays.

But the IRS must take additional steps to reduce processing time, she said.

The Chronicle wants to hear from organizations that have faced a lengthy delay when applying for nonprofit status with the IRS. How long did the process take and what effect, if any, did a delay have on your operations?

Click on the comments link below this post to share your experience.

— Peter Panepento

Comments

To the Chronicle:
I serve as a board member for the Kasese Wildlife Conservation Awareness Organization (KWCAO) that supports conservation education programs in western Uganda. We had submitted our Form 1023 back in October 2007 and have yet to hear from the I.R.S.. In February of 2008, their website (http://www.irs.gov/charities/article/0,,id=156733,00.html)indicated that they were reviewing applications received through October 2007.

Not hearing from the I.R.S. as of April 2008, I followed their website instructions and placed a call to their offices to check on the status of our application.

After more than an hour on hold, I spoke with an I.R.S. representative who was unable to find our submitted application. After another extended period on hold, she informed me that I would be receiving a follow-up call “within a month.” It has now been nearly three months since my call. Our KWCAO board secretary has recently requested assistance from her congressional representative.

As an organization, KWCAO has suffered from an inability to receive and acknowledge charitable contributions during 2008. Our ability to provide funding to our Uganda-based partners has been restricted. In particular, we have been frustrated by the inability to pay for the shipment of wildlife trading cards to Ugandan school children and their families.

With any luck, the Chronicle can shed some light on the situation and hold the I.R.S. accountable.

Sincerely,
Rick Horton
Trustee
Kasese Wildlife Conservation Awareness Organization
Portland, Oregon
503-220-5744

— Rick Horton Jul 11, 01:29 PM #

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