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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I formed a 401c charity son who passed away last year. I am

Customer Question

I formed a 401c charity for my son who passed away last year. I am told that the cost of filing taxes on this would cost $750.00. Is this cost correct?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

I assume you meant 501c3 charitable organization - correct?

You woudl need to apply for recognition by the IRS of exempt status under section 501(c)(3) of the Code - and will need to use form 1023 for that.

http://www.irs.gov/pub/irs-pdf/f1023.pdf

here are instructions

http://www.irs.gov/pub/irs-pdf/i1023.pdf

on the page 24 the IRS provided the estimated time needed to complete and file these forms. While that will vary depending on individual circumstances - we may use that information to estimated required time.

So specifically to prepare forms - see corresponding column - it takes about 15 hours.

Thus if the specialist charges $50 per hour - that turns to $750 total charge.

HOWEVER if your charitable organization is simple - you might be able to use form 1023EZ instead

See here

http://www.irs.gov/uac/About-Form-1023EZ

See instructions page 10

http://www.irs.gov/pub/irs-pdf/i1023ez.pdf

So preparation might take 5 hours and will cost only 1/3 of the original stated fees.

Also that form is much more simpler and you might be able to do by yourself and only have someone to verify your filing.

Customer: replied 1 year ago.
It is a charity. Basically we collected monies and had a Memorial golf outing for him. Net proceeds going to Angel Flight, a non profit organization
Expert:  Lev replied 1 year ago.

I assumed that you did not apply for recognition by the IRS of exempt status yes - and are discussing that application - correct?
If yes - and if that is a simple charitable organization - you definitely will be able to use form 1023EZ instead of form 1023 - and that might cost you much less.

Expert:  Lev replied 1 year ago.

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