June 29, 2006 | Read Time: 1 minute
TAX WATCHBy Elizabeth Schwinn
Beginning July 1, the IRS will raise the fees it charges charities to apply for tax-exempt status, the revenue service has announced.
Organizations seeking first-time rulings that they qualify as charities generally will pay $750, up from the previous rate of $500. A reduced fee of $300 — double the previous rate of $150 — will apply to organizations with annual gross receipts of $10,000 or less during the previous four years, and to new groups that expect revenues of that size during their first four years.
The IRS says it raised its rates because the Office of Management and Budget has directed federal agencies to charge fees that reflect the full cost of providing goods or services to members of the public.
In February, tax-exempt organizations seeking written private-letter rulings from the government on how to handle complex legal issues, or to get official approval of other steps they have taken or plan to take, saw the rates for such advice increase to $8,700 for each request, up from $2,570.
At the same time, the IRS ceased charging small organizations a lower fee for the rulings. In previous years, the tax agency provided private-letter rulings at reduced rates to groups with annual revenue of less than $250,000 (Revenue Procedure 2006-8, in Internal Revenue Bulletin 2006-1).
A copy of the IRS notice is online at http://www.irs.gov/charities/article/0,,id=151893,00.html.
