A short and simple IRS form used by groups seeking tax-exempt status as charitable organizations should be replaced by a new version to prevent ineligible organizations from obtaining exemption, according to a national network of nonprofits.

Almost all organizations that submit Form 1023-EZ, “Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,” are granted exemption by the IRS, regardless of eligibility, David L. Thompson of the National Council of Nonprofits said in a January 11 letter to the IRS.

As a result, the erroneous approval rate for 2019 was 46 percent, wrote Thompson, citing a Taxpayer Advocate Service report. He was responding to an IRS request for comments on exempt organization forms and schedules.

“Quite frankly, the form fails to provide adequate information to ensure that only eligible organizations attain tax-exempt status and the privilege of receiving tax-deductible donations,” Thompson said.