Ok, just got off the phone with the IRS and they said that a user fee must always apply, regardless of exempt or income status. A new user fee (and form) will not be required if you move up in income level. The only time another fee may be involved is if you receive nonrelated income, Publication 598.
Filing requirements may change depending on gross receipts, necessitating a filing of form 990 or 990ec.
And finally, if your organization meets the gross receipts test, and you meet all requirements (filing at state level, approval, EIN, etc), donors MAY write off their donations as tax deductible to your organization. HOWEVER, without an approved form 1023 (determination letter) if a donor asks the IRS if you are IRS TAX EXEMPT (which you ARE NOT) they will say no because you have not applied.
NOTE. This does not mean the donations are not deductible. It just means you have not finalized (payed the user fee and filed the form) with the IRS.
NOTE: This is only for organizations that meet the gross receipts test.
NOTE: I would encourage every organization who takes this route to fully disclose it's status at the state and federal level to encourage donor trust.
Does anyone know if you can file an IRS form 1023 as an exempt organization (our PTO brings in less than $5k/year) and receive a determination letter without paying the $300 fee?
