Question

All of the following are domestic organizations with gross receipts that have not exceeded $50,000 in the last three years and are not expected to exceed $50,000 in the next three years. In addition, all have total assets valued at $250,000 or less. Which may be eligible to use Form 1023-EZ to apply for exempt status?

a. Youth in Action, LLC, a recreational baseball league.
b. The Edgar Tinsdale Trust, a private nonoperating foundation.
c. Mercy Hospital.

Answer 1

Youth in Action, LLC, a recreational baseball league, is likely the most eligible organization to use Form 1023-EZ, given it is a civic or community non-profit, unlike the private nonoperating foundation or the hospital, which typically need to file the full Form 1023.

option a is the correct

Step-by-step explanation:

The question asks which of the listed organizations may be eligible to use Form 1023-EZ to apply for exempt status under the conditions that they are domestic organizations with gross receipts not exceeding $50,000 in the last three years and not expected to exceed $50,000 in the next three years, and with total assets valued at $250,000 or less. From the provided options and the standard eligibility criteria for Form 1023-EZ, Youth in Action, LLC, a recreational baseball league, would likely be the most eligible to apply using Form 1023-EZ.

This is because it is likely a civic or community non-profit organization that provides services such as recreational sports which fit into the category of organizations that can use the streamlined application process intended for smaller nonprofits.

The Edgar Tinsdale Trust, being a private nonoperating foundation, and Mercy Hospital, categorized as a nonprofit health organization or private hospital, may not be eligible due to other specific restrictions that apply to certain types of organizations, such as private foundations and hospitals, which are often required to file the full Form 1023.