In a TAS study of a representative sample of organizations whose Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, was approved, 37% do not meet the legal requirements for exempt status under section 501(c)(3). To the extent these organizations’ receipts should be treated as taxable, or contributions to them are deducted by the donor, they are improperly subsidized by other taxpayers. The skeletal Form 1023-EZ, the brevity of the annual report required of these organizations, and the probability that the organizations will not have a website all result in a disturbing lack of information about them.
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