21.7.7  Exempt Organizations and Tax Exempt Bonds

Manual Transmittal

December 9, 2013

Purpose

(1) This transmits a complete revision to Section 7, Exempt Organizations and Tax Exempt Bonds, in IRM 21.7 Business Tax Returns and Non-Master File Accounts.

Material Changes

(1) All dates changed to reflect January 01, 2014.

(2) Various grammatical and editorial changes made throughout the IRM.

(3) Incorporated all IPU's issued in 2013.

(4) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.2 - Form 8940 added.

(5) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.3(6) - Gross receipts corrected.

(6) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.3 (2) - Form 8940 added.

(7) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.3.6 (2) - Grammatical correction.

(8) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.4.1.5 - Gross receipt calculation corrected.

(9) IRM 21.7.7.4.3.3(1) - Tax rate table added.

(10) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.4.16.7 (5) - If and Then table - manual refund procedures for Form 8941.

(11) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.4.19.3 - Adjust gross receipt calculation corrected.

(12) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.4.19 (5) - Instructions added for incomplete amended returns.

(13) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.4.23 - Correction to AMS.

(14) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.5.2.8(5) - IRM reference corrected.

(15) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.5.4.1.1.1(4) - Mail stop corrected.

(16) Incorporated IPU 13U0030 issued 01-02-2013 IRM 21.7.7.5.4.7.1(6) - Address corrected.

(17) Incorporated IPU 13U0913 issued 05-13-2013 IRM 21.7.7.4.11.3 - 4720-A instructions added.

(18) Incorporated IPU 13U0913 issued 05-13-2013 IRM 21.7.7.4.16.8 - Sequestered 990-T with 45R and tax instructions added.

(19) Incorporated IPU 13U0913 issued 05-13-2013 IRM 21.7.7.4.19.8.5.1(1) - Instructions to pend to post added.

(20) Incorporated IPU 13U0913 issued 05-13-2013 IRM 21.7.7.4.19.8.5.1(7) - Instructions added for authorized manager to sign Form 2859.

(21) Incorporated IPU 13U0913 issued 05-13-2013 IRM 21.7.7.5.4.1.1.3(3) - Exception added.

(22) Incorporated IPU 13U0913 issued 05-13-2013 IRM 21.7.7.5.4.4.3.1 - Room number added to address.

(23) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.3.3 - Tax rates updated

(24) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.11.3 - 4720-A information added/corrected.

(25) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.16 - F8038-CP sequestration procedures added.

(26) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.16.1(1) - 4720-A information added/corrected.

(27) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.16.2(1) - 4720-A information added/corrected.

(28) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.16.6(6) - 4720-A information added/corrected.

(29) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.19.8.5.1 - Added additional information for rocessing instructions for Form 4720.

(30) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.23.1.3.1 - IRI 59 information added.

(31) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.4.24.1(2) Table - corrected received to issuance of determination letter.

(32) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.5.4.1.1.2(1) - Correction to accounting mail stop.

(33) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.5.4.1.1.3(2) - EFTPS DLN procedures added.

(34) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.5.4.4(4) - Form 8038-CP added.

(35) Incorporated IPU 13U0539 issued 03-14-2013 IRM 21.7.7.5.4.5.3 - New sequestration procedures for Form 8038-CP added.

Effect on Other Documents

MT. IRM 21.7.7 dated January 01, 2013 is obsolete.

Audience

Wage and Investment (W&I) and Small Business/Self-Employed (SB/SE) located in the Ogden Accounts Management Campus, Customer Account Service, EO Accounts units.

Effective Date

(01-01-2014)

Maria D. Hooke
Director, Business System Planning
SE:T:BSP

21.7.7.1  (01-01-2014)
Section Overview

  1. This section provides guidelines for resolving Exempt Organization (EO) and Tax Exempt Bond (TEB) inquiries received in the Ogden Accounts Management Campus (OAMC), EO Accounts units.

  2. All EO and TEB account related issues and correspondence are worked in the EO Accounts units or by TE/GE Customer Service Representatives (CSR) located in the OAMC. Other than stated in the " Exception " below, CSR and Tax Examiners (TE) located in other call sites or campuses are not authorized to resolve EO or TEB account related issues. Refer to IRM 21.7.7.4.23 for guidelines relating to EO penalty abatements.

    Exception:

    Penalty abatement requests assigned to the Exempt Organization Compliance Area (EOCA).

  3. Areas that are not authorized to work EO penalties or account related issues must follow case referral procedures as outlined in IRM 21.3.5, Taxpayers Inquiry Referrals Form 4442.

  4. In addition to the following procedures, EO tax examiners must refer to various chapters throughout IRM 21 (e.g., IRM 21.1, Accounts Management and Compliance; IRM 21.3, Taxpayer Contact; IRM 21.5, Account Resolution;IRM 21.7.9, BMF Duplicate Filed Returns; etc.) as needed for case resolution.

  5. This section contains information on the following subjects:

    • EO correspondence inquiries

    • EO tax adjustments

    • EO penalty abatements

    • Routing of EO related correspondence

    • Tax Exempt Bonds (TEB) correspondence inquiries

    • EO, EP (Form 990-T) and TEB claims

    • Allowable credits

    • Extension reconsiderations

    • EO and TEB amended return processing

21.7.7.1.1  (01-01-2014)
Taxpayer Advocate Service (TAS)
General Information

  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage & Investment (W&I) Division, Small Business & Self-Employed (SB/SE) Division, tax Exempt Government Entities (TE/GE) Division, Criminal Investigation (CI), Appeals and Large Business and International (LB&I) Division. Each Service Level Agreement (SLA) outlines the procedures and responsibilities for the processing of TAS cases when either the statutory or delegated authority to complete case transactions rests outside of TAS. The SLA includes specific action to take on TAS referrals and specific time frames for completing those actions.

  2. The SLAs can be found at http://tas.web.irs.gov under the heading "Policy/Procedures/Guidance."

21.7.7.1.1.1  (01-01-2014)
Operations Assistance Requests (OARs)

  1. The Taxpayer Advocate Service utilizes Form 12412, Operations Assistance Request (OAR) to refer cases to an operating division, when TAS lacks either the statutory or delegated authority to resolve a taxpayer's problem.

  2. In preparation for a case being referred to the TE/GE Division, the TAS employee is responsible for:

    1. Preparing Form 12412, Operations Assistance Request.

    2. Securing all necessary supporting documentation.

    3. Identifying cases that require expedite processing. No case will automatically receive expedite processing. Requests for expedite processing will be made on a case-by-case basis.

    4. Forwarding Form 12412 and documentation to the TEGE Business Unit Liaison.

  3. The TEGE Division is responsible for:

    1. Assigning a liaison in each office or Campus where a Taxpayer Advocate is located.

    2. Acknowledging receipt of the case within one (1) workday for cases requiring expedite processing or within three (3) workdays for all other cases.

    3. Responding to TAS within three (3) workdays in writing, via faxsimile, secure messaging e-mail, or hand delivery of resolution.

    4. Providing TAS with the name and telephone number of the TE/GE group manager or employee assigned the case.

    5. Determining a reasonable time frame for case resolution.

    6. Upon closing of the OAR, the TE/GE employee assigned the OAR will complete Section VI of Form 12412, Operations Assistance Request and return it to the TAS employee assigned the case. The Form 12412 must be returned within three (3) workdays from the date that all actions have been completed and transactions input.

  4. For more detailed information about the OAR process, please refer to the TEGE SLA.

21.7.7.2  (01-01-2014)
Exempt Organizations Overview

  1. Certain non-profit organizations or trusts that meet specific standards set by the Internal Revenue Code (IRC) under IRC 501 do not have to pay federal income tax and may be exempt from other types of tax as well. These organizations are classified and referred to as " Exempt Organizations . "

  2. The range of exempt organizations is extensive and includes charitable, religious, scientific and educational groups.

  3. Only organizations claiming exemption under IRC 501(c)(3),IRC 501(c)(9),IRC 501(c)(17) or 501(c)(29) are required to make written application to the TE/GE Determinations. Certain organizations such as churches, their integrated auxiliaries, conventions of churches, and small organizations are excepted from this requirement under IRC 508(c).

  4. Exempt organizations are groups, societies, unions, libraries, museums, corporations, etc., which are granted an exemption from some type of Federal tax by the Internal Revenue Service. Examples of exempt organizations are:

    • Knights of Columbus

    • Daughters of the American Revolution

    • Lions Club

    • Trade groups

    • Organizations operating and organized for charitable, religious, scientific, and educational purposes.

  5. The various forms filed by Exempt Organizations and Government Entities are:

    • Form 990, Return of Organization Exempt From Income Tax

    • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax

    • Form 990-T, Exempt Organization Business Income Tax Return

    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation

    • Form 990-BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts & Certain Related Person

    • Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required To File Form 990 or 990-EZ

    • Form 1041-A, U.S. Information Return Trust Accumulation of Charitable Amounts

    • Form 1041, U.S, Income Tax Return for Estates and Trusts (For Nonexempt Charitable Trusts Under Section 4947(a)(1) with Taxable Income)

    • Form 1065, U.S. Return of Partnership Income

    • Form 1098-C, Contributions of Motor Vehicles, Boats and Airplanes

    • Form 1098-E, Student Loan Interest Statement

    • Form 1098-T, Tuition Statement

    • Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations

    • Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the IRC

    • Form 5227, Split-Interest Trust Information Return

    • Form 5578, Annual Certificate of Racial Nondiscrimination for a Private School Exempt from Federal Income Tax

    • Form 5768, Election/Revocation of Election by an Eligible Sec. 501(c)(3) Organization to Make Expenditures to Influence Legislation

    • Form 6069, Return of Excise Tax on Excessive Contributions of Black Lung Benefit Trust

    • Form 7004, Application for Automatic 6 month Extension of Time to File Certain Business Income Tax, Information and Other Returns (for extending Form 1120-POL and Form 1065 in the case of 501(d) organizations)

    • Form 8282, Donee Information Return

    • Form 8453-X, Political Organization Declaration for Electronic Filing of Notice 527 Status

    • Form 8453-EO, Exempt Organization Declaration and Signature for Electronic Filing

    • Form 8871, Political Organization Notice of Section 527 Status

    • Form 8872, Political Organization Report of Contributions and Expenditures

    • Form 8868, Application for Extension of Time To File an Exempt Organization Return

    • Form 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction

    • Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts

    • Form 8879-EO, IRS e-file Signature Authorization for an Exempt Organization

    • Form 8899, Notice of Income from Donated Intellectual Property

    • Form 8921, Applicable Insurance Contract Information Return

    • Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues

    • Form 8038-B, Information Return for Qualified Build America Bonds and Qualified Recovery Zone Economic Development Bonds

    • Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds

    • Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues

    • Form 8038-GC, Consolidated Information Return for Small Tax-Exempt Government Bond Issues

    • Form 8038-TC, Information Return for Tax Credit Bonds

    • Form 8038-T, Arbitrage Rebate and Penalty in Lieu of Arbitrage Rebate

    • Form 8038-R, Request for Recovery of Overpayment Under Arbitrage Rebate Provisions

    • Form 8703, Annual Certification of a Residential Rental Project

    • Form 8328, Carry forward Election of Unused Private Activity Bond Volume Cap

    • Form 8940, Request for Miscellaneous Determination

21.7.7.3  (01-01-2014)
Exempt Application Process

  1. An EO must be organized and operated for one or more of the purposes specifically designated in the IRC. The type of exemption granted is determined by the information submitted on the application. Refer to the table located in IRM 21.7.7.3.1 for the IRC section, subsection (SS), and description of the organization.

  2. An application for exempt status is generally filed on one of the three forms below:

    • Form 1023, Application for Recognition of Exemption Under IRC Section 501(c)(3)

    • Form 1024, Application for Recognition of Exemption Under IRC Section 501(a)

    • Form 1028, Application for Recognition of Exemption Under IRC Section 521

    If no form is prescribed, a letter application is filed. Rev. Proc. 2007–52 provides guidelines as to what must be included in a letter application. See also Form 8940 and instructions.

  3. Request for exempt status must be mailed with the appropriate user fee. See IRM 3.45.1, Processing Employee Plan and Exempt Organization Determination Applications and User Fees for additional information. User fee information can also be found on Notice 1382 The application is then sent to one of the addresses shown below:

    Regular Mail:
    Internal Revenue Service
    P.O. Box 12192
    Covington, KY 41012–0192

    Express Mail:
    Internal Revenue Service
    201 W. Rivercenter Blvd.
    Attn: Extracting MS: 312
    Covington, KY 41011

  4. TE/GE Determinations will review the application and either:

    • Issue a letter recognizing exemption

    • Deny the request

    • Close the application as a fail to establish

  5. Telephone inquiries from taxpayers regarding EO/EP determinations and foundation status issues can be referred to the TE/GE Customer Account Service (CAS) Telephone Operations toll free number 1-877-829-5500.

  6. Once an organization has been granted exemption, it must continue to conform to IRS regulations which govern the exemption. The organization must file an annual return if its annual gross receipts are normally over $50,000 unless it is exempt from filing an annual return. Supporting organizations must file an annual return regardless of its annual gross receipts. Organizations exempted from filing an annual return include churches, certain schools, government instrumentalities, and certain others. Refer to IRM 21.7.7.3.3 for the gross receipts test used to determine if annual gross receipts are normally over $50,000.

21.7.7.3.1  (01-01-2014)
Internal Revenue Code (IRC) Subsections

  1. The table below provides the Internal Revenue Code, the subsection code, a brief description of the organization, and the classification code. Refer to Document 6209 for the filing requirement codes.

    Internal Revenue Code Subsection Code Type of Exempt Organization Classification Code
    IRC 501(c)(1) 01 Governmental Instrumentality 1
    IRC 501(c)(2) 02 Title holding corporation 1
    IRC 501(c)(3) 03 Charitable organization 1
    IRC 501(c)(3) 03 Educational organization 2
    IRC 501(c)(3) 03 Literary organization 3
    IRC 501(c)(3) 03 Organization to prevent cruelty to animals 4
    IRC 501(c)(3) 03 Organization to prevent cruelty to children 5
    IRC 501(c)(3) 03 Organization for public safety testing 6
    IRC 501(c)(3) 03 Religious organization 7
    IRC 501(c)(3) 03 Scientific organization 8
    IRC 501(c)(4) 04 Civic league 1
    IRC 501(c)(4) 04 Local association of employees 2
    IRC 501(c)(4) 04 Social welfare organization 3
    IRC 501(c)(5) 05 Agricultural organization 1
    IRC 501(c)(5) 05 Horticultural organization 2
    IRC 501(c)(5) 05 Labor organization 3
    IRC 501(c)(6) 06 Board of trade 1
    IRC 501(c)(6) 06 Business league 2
    IRC 501(c)(6) 06 Chambers of Commerce 3
    IRC 501(c)(6) 06 Real estate board 4
    IRC 501(c)(7) 07 Pleasure, social and recreation club 1
    IRC 501(c)(8) 08 Fraternal beneficiary society or association 1
    IRC 501(c)(9) 09 Voluntary employees' beneficiary association Non Governmental 1
    IRC 501(c)(9) 09 Voluntary employees' beneficiary association Governmental 2
    IRC 501(c)(10) 10 Domestic fraternal society and association 1
    IRC 501(c)(11) 11 Teachers retirement fund association 1
    IRC 501(c)(12) 12 Benevolent life insurance association 1
    IRC 501(c)(12) 12 Mutual ditch or irrigation company 2
    IRC 501(c)(12) 12 Mutual or cooperative telephone company 3
    IRC 501(c)(12) 12 Organization like those on three preceding lines 4
    IRC 501(c)(13) 13 Burial association 1
    IRC 501(c)(13) 13 Cemetery company 2
    IRC 501(c)(14) 14 State chartered credit union 1
    IRC 501(c)(14) 14 Other mutual corporation or association 2
    IRC 501(c)(15) 15 Mutual insurance company or association other than life/marine 1
    IRC 501(c)(16) 16 Corporation financing operation 1
    IRC 501(c)(17) 17 Supplemental unemployment Compensation Trust 1
    IRC 501(c)(18) 18 Employee funded pension trust created before June 25, 1959. 1
    IRC 501(c)(19) 19 Post or organization of war veterans 1
    IRC 501(c)(20) 20 Legal service 1
    IRC 501(c)(21) 21 Black lung benefit trust 1
    IRC 501(c)(22) 22 Multi-employer pension plan 1
    IRC 501(c)(23) 23 Veterans association founded before 1880. 1
    IRC 501(c)(24) 24 Trust described in IRC 4049 of ERISA 1
    IRC 501(c)(25) 25 Title holding company for pensions, etc. 1
    IRC 501(c)(26) 26 State sponsored high risk health insurance organization 1
    IRC 501(c)(27) 27 State sponsored workers' compensation insurance 1
    IRC 501(c)(28) 28 National Railroad Retirement Investment Trust 1
    IRC 501(c)(29) 29 State Health Insurance (Health care) 1
    IRC 501(d) 40 Apostolic and religious organization 1
    IRC 501(e) 50 Cooperative hospital service organization 1
    IRC 501(f) 60 Cooperative service organization of operating education organization 1
    IRC 501(k) 70 Child care organization 1
    IRC 501(n) 71 Charitable risk pool 1
    IRC 521 80 Exempt farmer cooperative 1
    IRC 529 81 Qualified State Tuition Program 1
    IRC 527 82 Political Organizations 1
    IRC 4947(a)(2) 90 Nonexempt charitable trust 4947(a)(2) (split interest) 1
    IRC 4947(a)(1) 91 Nonexempt charitable trust (public charity) 1
    IRC 4947(a)(1) 92 Nonexempt charitable trust (private foundation) 1
    IRC 1381(a)(2) 93 Taxable farmers' cooperative 1

21.7.7.3.2  (01-01-2014)
EO Entity Section

  1. When an EO MFT (34, 36, 37, 44, 50, or 67) transaction attempts to create a tax module on BMF, the entity module must contain an EO section. The EO section provides information about the exempt organization. The codes in the subsection field (SUB) provide specific information about the organization when used in connection with the subsection chart provided above.

  2. The EO section is created by TE/GE Determinations or the Ogden EO Entity unit.

  3. If an EO section is not present on ENMOD, forward the case to EO Entity Control.

  4. Both BMF and EO codes are present on ENMOD (FR codes, employment codes, subsection codes, status codes, etc.)

  5. The organization files returns based on the type of exemption determined by the IRC section and is identified by subsection (SUB) on ENMOD.

  6. The following definitions apply to various codes relating to an exempt organization.

    EO Section Definitions
    1 EO STAT Exempt Organization Status Code (year & month) – Indicates the status of the organization. The code identifies whether or not the organization has been granted an exemption or if it has been applied for, revoked or terminated. The status code is normally established by TE/GE Determinations during the determination process.
    2 RUL Ruling Year and Month – The date TE/GE Determination issued a determination/ruling letter to the organization. This date is normally not changed except by TE/GE Determinations.
    3 CLASS Classification Code – This code identifies the type of organization. One to four different codes may be present. The classification code can be changed by TE/GE Determinations and EO Examinations.
    4 AFF Affiliation Code – This code indicates if the organization received an individual ruling or is part of a group ruling. It normally is not changed unless the entity is changing from a group to an individual ruling, or from an individual to a group ruling. Values are 1, 2, 3, 6, 7, 8, or 9.
    5 INC Income Code – Yearly receipts for EO/BMF return.
    6 FOUN Foundation Code – All organizations that are exempt under IRC 501(c)(3) must have a Foundation Code. This code identifies the organization's classification as a non-private foundation, or private foundation and if a private foundation, the type of foundation. Changes to the Foundation Code are normally approved by TE/GE Determinations and can only be updated by the service center from a determination.
    7 GEN NO Group Exemption Number – Issued to a central organization and its subordinate chapters under a blanket group ruling.
    8 ORG Organization Code – This code indicates whether the organization is a trust, a corporation, or an unincorporated association. The code is assigned by EO Determinations when the exemption is granted and is normally changed by them.
    9 ASSET Asset Code – Amount of assets shown on most recent return.
    10 SUB Subsection Code – Identifies the IRC section under which the organization is exempt. It also determines the type of return the organization will file. The Subsection code is assigned when the organization's request for exemption is approved or when an initial Form 990 is filed by a non 501(c)(3), 501(c)(9), 501(c)(17) or 501(c)(29). Changes to the subsection must be approved by EO Determinations and can only be updated by the service center from a determination letter. Occasionally the TE/GE Correspondence Unit will need to update/correct the subsection code based on research.
    11 FFN File Folder Number – Identifies the Administrative Case File folder number located in EO Determinations. The file folder number is assigned by the TE/GE Determinations when an application for exemption is received and will normally not be changed.
    12 FR Filing Requirements – This identifies the type of return an organization must file.
    13 PRIOR
    EO STAT
    Prior EO Status – Organization's status code immediately preceding the current status.
    14 ARED Advance Ruling Expiration Date – At this time a final ruling of an organization's public support test is computed after the TP completes Schedule A, Support Schedule. 999999 is a deletion of an advance ruling date.

21.7.7.3.2.1  (01-01-2014)
Status Codes

  1. When an organization is granted an exemption, EO Rulings and Agreements will input the information on Master File to create the EO account or add the exemption data to an already existing account. When status codes 01 or 02 are present on the EO account, they indicate that an exemption has been granted to the organization. Most IRC 501(c)(3) and all IRC 501(c)(9)IRC 501(c)(17) and 501(c)(29) organizations are required to notify the Service that they are seeking tax exempt status; therefore, they must file a Form 1023 or Form 1024 application.

  2. IRC 501(c) organizations other than IRC 501(c)(3),IRC 501(c)(9),IRC 501(c)(17) or 501(c)(29) organizations are not required to file an application for exemption, though they may do so. They may be considered exempt even though they do not apply for a formal exemption as long as they satisfy the requirements of the particular paragraph of IRC 501(c) they claim exemption under. Also, if they do not establish exempt status by application to Cincinnati, they are at risk of retroactive revocation and taxation if they are found not to be engaged in activities described by the subsection under which they filed.

  3. The EO status (EO-STAT) on ENMOD (see Document 6209 or Document 6379 for a complete list of EO Status Codes) identifies the account as:

    • Active

    • Inactive (revoked, out of business)

    • Has never received an exemption

  4. Refer to the table below for a list of EO statuses and their definitions:

    Note:

    Status code 32, Non-responder to CP 140/141 (applicable to tax periods 200612 & prior) was obsolete January 1, 2008.

    Status Codes and Definitions
    00 or Blank EO Section established without a status 01 Unconditional Exemption
    02 Conditional Exemption 06 State university filing Form 990-T
    07 Church Filing a Form 990-T 10 Pre-Examination of a church
    11 School Certification 12 A Formal Exemption Not Granted - Filing an EO Return Form 990 Under IRC 4947(a)(1);Form 990-PF
    Under IRC 4947(a)(1);Form 5227 Non-Exempt Charitable Trust;
    18 Temporary Revocation of Pvt. Fdn. (Trust) (Required to File Form 990-PF & Form 1041) 19 Revocation of Pvt. Fdn. (Corporation) Required to File Form 990-PF & Form 1120
    20 Termination - Inactive (Out of Business, etc.) 21 Unable to Locate
    22 Revocation 23 Organization terminated under IRC 507(a)
    24 IRC 507(b)(1)(A) termination 25 IRC 507(b)(1)(B)Termination
    26 Termination merger 28 No longer a member of a Group Ruling
    29 A Group Ruling has been dissolved 30 Churches voluntarily filing Form 990 though not required to file returns or to apply for exemption
    31 Small organizations, other than churches and PFs, with annual gross receipts less than $5,000 and which voluntarily file Form 990 though not required to file returns or apply for exemptions 33 Foreign PFs described in IRC 4948(b) that are not required to apply for exemption but are required to file Form 990-PF
    34 IRC 527 Political Organizations 35 Foreign entities exempt by treaty with the United States
    36 Non IRC 501(c)(3),IRC 501(c)(9),IRC 501(c)(17) or 501(c)(29) filers — No official exemption 40 Application Pending - No exemption
    41 No reply to solicitation - No exemption 42 Extension of time filed - No exemption
    - Payment posted prior to first return
    70 Denied - No exemption 71 Incomplete Form 1023 orForm 1024 - No exemption
    72 Refusal to Rule - No exemption 97 Revocation due to failure to file Form 990-N for three consecutive years.
    98 Terrorist Organization - No exemption 99 Dump code - No exemption (prior EO status codes 22, 41 or 70-72)

  5. If necessary, the EO Entity unit at the Ogden Campus should be contacted to update the status prior to any adjustment action taken on the account.

  6. A review of ENMOD, INOLES, or BMFOLO must be made prior to inputting a return or extension to an EO account to ensure the account is not in one of the following statuses:

    • Status 18

    • Status 19

    • Status 20

    • Status 21

    • Status 22

    • Status 26

    • Status 28

    • Status 29

    • Status 41

    • Status 42

    • Status 70

    • Status 71

    • Status 72

    • Status 97

    • Status 98

    • Status 99

    Note:

    EO filing requirements must be established prior to processing an EO return or inputting a TC 460 on an EO MFT. Refer to IRM 3.13.12 to establish filing requirements or send to EO Entity M/S 6273.

21.7.7.3.2.1.1  (01-01-2014)
Status Code 40 Procedures

  1. Exempt Organizations are placed in status 40 when the organization has filed a return (Status 42 if an extension was filed), but has not been granted an exemption at the time the return was filed. Each month (except January) "Status 40" information is downloaded from the Master File to the EO Entity system in Ogden. A CP 120 is sent to each organization whose account is in Status 40.

  2. When cases in Status 40 are received in the EO Accounts units, the following procedures should be followed:

    1. Using CC BMFOLI, review the organization's past filing record (e.g., have Form 990, Form 990-PF or Form 1120 been filed in the past).

    2. If the account shows no change or update on ENMOD or BMFOLO, give the case to the lead, with instructions to check the EDS system.

    3. If EDS shows action has been taken on the account, address all EO Accounts related issues. Do not correspond with the organization unless it specifically requests a reply. If a taxpayer requests information regarding its determination status, refer them to the TE/GE CAS Telephone Operations toll free number 1-877-829-5500.

    4. If EO Entity has an open control on ENMOD or taxpayer is responding to an EO Entity letter, route case to Entity.

    5. Address all EO related issues.

    6. Close control base.

    Note:

    All EO Account related issues must be addressed before forwarding case to Entity (i.e., remove penalties, release A-freeze, credit transfers, etc.).

21.7.7.3.2.1.2  (01-01-2014)
Status Code 41, 70 – 72 Procedures

  1. When processing Status 40 cases, EO Entity contacts the organization and solicits an application for exemption. An organization has up to 9 months to reply. At the end of the 9 months, if the organization does not respond, the account is updated to status 41 if the Sub Section (SS) is 03/09/17/20 or status 36 if the SS is other than 03/09/17/20. When inputting status 41, a filing requirement for either a Form 1120, Form 1041 or Form 1065 is established and all EO filing requirement codes (FRC) are deleted. When Status 36 is entered, Form 990 filing requirements are established. If the filing requirement is missing, but can be determined, the appropriate FR should be added to the account by Entity. Status Code 70-72 is updated by Cincinnati Rulings and Agreements only.

  2. The following is a list of status codes and their definitions that are used in EO Entity.

    • Status 36 - Non IRC 501(c)(3), IRC 501(c)(9), IRC 501(c)(17) or 501(c)(29) Filers is used by EO Entity when it is determined that the organization does not have to request a formal exemption.

    • Status 41 - Failed to Reply to Solicitation for Application is used by Entity. When processing the " Status 40" listing, a CP 120 is sent to the organization and solicits an application for exemption. If the organization does not respond, the account will be systemically updated to Status Code 41. When inputting this status, a filing requirement for Form 1041,Form 1065, or Form 1120 must be input. At the same time, all the EO FRCs are deleted.

    • Status 70 - Exemption Denied is input by Cincinnati when, on the merits of the application, an exemption cannot be granted. This status will generate a Form 1120 filing requirement of 01.

    • Status 71 - Failed to Establish/Incomplete Form 1023 or Form 1024 is input by Cincinnati when the application is incomplete and no response to request for information was received. This status will generate a Form 1120 filing requirement of 01.

    • Status 72 - Refusal to Rule is input by Cincinnati when the applicant fails to furnish a detailed description of its planned activities. This status will generate a Form 1120 filing requirement of 01.

  3. When a Status 41, 70-72 case is received in EO Accounts, the following action must be taken by the tax examiner in order to resolve the case:

    1. Check ENMOD for current filing requirements and EO status.

    2. Give the case to the lead requesting EDS/TEDS research in order to check for possible determination follow-up.

    3. If no change, take the necessary action required to resolve all account related issues (e.g., abate penalty, credit transfer, tax decrease, etc.).

    4. Correspond with the organization explaining that IRS records show it does not have exempt status because it failed to reply to a solicitation for application (41), the exemption was denied (70), the application was incomplete (71), or the organization failed to provide a sufficient description of its activities (72).

    5. Inform the organization of its specific filing requirements (Form 1120).

    6. If an original unprocessed return is received with the correspondence, send the return to R&C to be processed.

    7. If the return has been processed, but has a cancelled DLN, forward return to EO Entity to be associated with the other Status 41, 70 - 72 documents.

    8. If Form 1120 filing requirements are not shown on Master File, fax a request to EO Entity instructing them to establish Form 1120 filing requirements to the account.

21.7.7.3.2.1.3  (01-01-2014)
Status 97 Procedures

  1. Tax Exempt Organizations are required to file Form 990, 990-EZ, 990-N or 990-PF regardless of their gross receipts with few exceptions. If an organization fails to file a return for three consecutive years, they lose their tax exempt status and will be placed into Status 97.

  2. EO Accounts may receive correspondence from filers or referrals from the Call Site.

  3. When updating an account to a good status, refer to IRM 3.13.12. Instructions to update will vary depending on the entity. If unable to determine the correct procedure to update an account, send to EO Entity, M/S 6273.

  4. Before an organization is determined to have been erroneously revoked and updated to a good status, thorough research must be completed. The following should be considered:

    • Revocation is an ongoing process. The previous 3 years should be considered for review. For example in 2013, tax periods 2009, 2010 and 2011 are being reviewed for revocation. In addition, beginning May 2013 tax periods 2012 will be included in the revocation process.

    • When updating an account to a good status due to a consolidation or if a TC 590 is required, reference should be made to the Status 97 cycle chart below to ensure all input occurs before the next round of revocation. Failure to post all transactions will result in the account being updated to Status 97.

    • Proof of electronically filed returns should be carefully reviewed. TE's should not rely on printed acceptance notices from filers but should research through the EUP to verify acceptance and timely filing of electronically filed returns.

    • Accounts should not be considered erroneously revoked if the filer contributed to the error. For example filing under another EIN not belonging to the organization. Errors related to service errors should be considered erroneously revoked.

    • Extensions are not valid for Form 990-N (e-postcard).

    • Accounts cannot be updated until approved by TEGE SPP Analyst. A file will be set up within the unit per local management. TEGE SPP will review weekly and notate the correct actions on the return.

    Status 97 Chart
    Extract Cycle/Date Status 97 Date Tax Years 2008 2009 2010 FYMS Checked Status 97 Date 2009 2010 2011 Status 97 Date Tax Years 2010 2011 2012 FYMS Checked TC 016 Date to Prevent Revocation TC 590 Input Date to Prevent Revocation
    04
    01-20-2013
    201301
    08-11
    201301
    12,01-07
    NA 11/19/2012-1/7/2013 11/19/2012-1/7/2013
    08
    02-17-2013
    201302
    09-11
    201302
    12, 01-08
    NA 1/20/2013-2/4/2013 1/20/2013-2/8/2013
    13
    3-24-2013
    201303
    10-11
    201303
    12, 01-09
    NA 2/17/2013-3/11/2013 2/17/2013-3/11/2013
    17
    04-21-2013
    201304
    11
    201304
    12, 01-10
    NA 3/24/2013-4/8/2013 3/24/2013-4/12/2013
    21
    5-19-2013
    NA 201305
    12, 01-11
    NA 4/21/2013-5/6/2013 4/21/2013-5/10/2013
    26
    6-23-2013
    NA 201306
    01-11
    201306
    12
    5/19/2013-6/10/2013 5/19/2013-6/14/2013
    30
    7-21-2013
    NA 201307
    02-07
    201307
    12, 01
    6/23/2013-7/8/2013 6/23/2013-7/13/2013
    34
    8/18/2013
    NA 201308
    03-07
    201308
    12, 01-02
    7/21/2013-8/5/2013 7/21/2013-8/9/2013
    39
    09-22-2013
    NA 201309
    04-07
    201309
    12, 01-03
    8/18/2013 - 9/9/2013 8/18/2013 - 9/13/2013
    43
    10-20-2013
    NA 201310
    05-07
    201310
    12, 01-04
    9/22/2013 - 10/7/2013 9/22/2013 - 10/11/2013
    47
    11-17-2013
    NA 201311
    06-07
    201311
    12, 01-05
    10/20/2013 - 11/8/2013 10/20/2013 - 11/8/2013
    53 NA NA NA NA NA

  5. EO Accounts may receive correspondence from filers or referrals from the Call Site. The following actions should be taken when working Status 97 cases:

    If Then
    The organization is a subordinate in a group ruling and indicates they filed as part of a group return,
    1. Research for a group return.

    2. If a group return was filed, check the group code or list of subordinates to determine if the subordinate was included. (Group code 7 indicates all of the subordinates were included). Lists are attached to the return and can be viewed on SEIN.

    3. If the subordinate was included in the group return, update the account. To update the account it may be necessary to input a TC 022 to remove the subsection and then re-establish it in a good status to avoid unpostables. When the account is in a good status, input a TC 590/014 to indicate subordinate was included in the group return. Once account is in a good status, send a letter to the filer. Include the EIN and name on the weekly list to have the EIN removed from the Revocation list.

      Note:

      If the group return contains all zero, it is not a valid return. Send a letter stating the subordinate must re-apply for tax exempt status.

    If the organization states they filed the return but under a different EIN,
    1. Research for the correct EIN.

    2. If a different EIN is found, notify the organization of their correct EIN. Send the correspondence to M/S 1110 for elevation to EO Division.

      Note:

      Revocations are not considered erroneous if the filer submitted a return using an incorrect EIN. Cases will be reviewed by EO Division.

    3. If a different EIN is not found and there is no indication the returns were filed, research SEIN to determine if the returns were received.

    4. If SEIN research indicates the returns were received prior to the due date of the return but did not post to Master File, make a copy of the return. Input a TC 594/94 on the account and send the return through for processing. Update the status to 01.

      Note:

      The received date on the SEIN copy must be prior to the due date of the 3rd year return. If the received date is later than the due date, notify the filer their return was received after the due date of the third consecutive year and they must submit a Form 1023 or 1024 and apply for a new determination. Do not update the status.

    5. If unable to locate a copy of the return, request copies of the returns and proof of timely filing from the filer. (i.e. an IRS letter, postmark or notice referring to the return) Instruct the filer if they cannot supply proof of timely filing they must submit Form 1023 or 1024 and apply for a new determination. Do not update the status.

    If the filer submits copies of returns and proof of filing,
    Proof of filing is a copy of a postmark or receipt. Acceptance of electronic filing must be confirmed by checking the IRS EUP web site. Rejected returns do not constitute timely filings.
    1. Ensure the received date is prior to the due date. Edit the original due date if necessary.

    2. Update the account to status 01.

    3. Input a TC 590/020 on the 3rd year if no timely return has posted.

    4. Send a letter to the filer indicating tax-exempt status was corrected.

    If returns are received (either copies or originals) and proof of timely filing is not included,
    1. Update any entity information.

    2. Do not update status 97 or input a TC 599 or 594. Do not correspond with filer unless the filer requests specific information concerning their status.

    3. Return will post in status 97.

    If And Then
    The filer states the organization should not have been revoked because they have a letter stating they are not required to file an EO return EDS/TEDS research shows that the organization was given a 990-06, 990-13, or 990-14 filing requirement
    1. Update the account to status 01 and input the correct filing requirement.

    2. Send a letter to the filer.

    3. Include the EIN and name on the weekly list.

    The filer states the organization should not have been revoked because they have a letter stating they are not required to file an EO return EDS/TEDS research does not show that the organization was given a 990-06, 990-13, or 990-14 filing requirement Do not update the account. Instruct the filer they must send a copy of the letter to:
    .TEGE Correspondence Unit
    PO Box 2508 Room 4024
    Cincinnati, OH 45201
    The information may also be faxed to 513-263-4330.
    The filer states the organization should not have been revoked because they filed at least one return in the three year period which began after December 31, 2006 IDRS research shows at least one return was filed for the appropriate period and, if it was for the third year, that the return was timely filed
    1. Ensure the returns were timely filed.

    2. Update the account to status 01.

    3. Send a letter to the organization stating the account was updated.

    The filer states the organization should not have been revoked because they filed at least one return in the three year period that began after December 31, 2006 IDRS research does not show at least one return was filed for the appropriate period or, if it was for the third year, the return was not timely filed Refer to IRM 21.5.1.4.2.4(3) to determine timely filed returns. If research shows a return was filed for the appropriate period, correspond with the filer requesting proof of a timely filed return. If no proof is received, instruct the filer they must reapply.
    The correspondence indicates the recipient of CP 120A is not connected to the organization and does not have a new address   Input a TC 593/32 via FRM 49.
    The filer states they should not have been revoked because they were not established for three years IDRS research shows they were not established for at least three years

    Note:

    For example, organization established in June 2010 would be required to file a return for period ending 201006.

    1. Research BMFOLE for the TC 016 which updated the account to Status 97. Identifiers will be TC 016 with Definer Code B, date matching status update on INOLES. If the DLN of the TC 016 contains all 9s ending in 2, 3, 4 etc., update the account to status 01. If the DLN does not contain 9s as stated above, do not update. TC 016 to input Status 97 was input manually by CSC.

    2. If determined the account should be updated, send letter to the filer.

    3. Include EIN and name on weekly list.

    Note:

    In determining whether an organization is required to file, the established date should be used regardless of the ruling date or if the organization states they were not active.

    The account is in Status 97 the filer indicates the organization is no longer in business Zero out the Form 1120 filing requirements. Do not input a TC 591 or update the status.
    The organization indicates their FYM is other than what is indicated on Master File  
    1. Research EDS to determine the FYM used to establish the organizations determination.

    2. If FYM requested by organization matches EDS update status, send letter and include on weekly list.

    3. If EDS does not match FYM of organization, research Master File and SEIN to determine previous filings. Update FYM if necessary. If organization has filed at least one timely return within the 3 year period in question, update the account to status 01. Send a letter to the filer and include in the weekly list.

    4. If unable to determine correct FYM, notify the filer they must submit an application to obtain tax exempt status. Do not update account or change FYM.

    Organization states they attempted to file a 990-N prior to the October 15, 2010 deadline and were unable to do so  
    1. Research the EUP to determine date and cause of the rejection.

    2. Research BMFOLE to determine if a TC 016 was input prior to 10/15/2010.

    3. If a TC 016 prior to 10/15/2010 is present and the filer indicates the organization requested the Service submit the 990-N on their behalf, update the account to status 01, send the organization a letter and include EIN and name on the weekly list.

      Note:

      Check AMS history for any additional information which supports the organizations information.

    4. If necessary request a copy of the reject notice which was sent to the organization.

    The organization requests to change their ruling to a church   Route the case to TE/GE adjustment unit.
    If organization submits a $100 user fee and requests reinstatement per Notice 2011-43 but does not include the application  
    1. Send an 86C letter using the information in IRM 21.7.7.4.15.1.

    2. Print the CIS case and close the control.

    3. Give the prints to the Lead or Manager.

    4. The case will be forwarded to the TE/GE Adj Unit.

    The organization is a presumptive 990-PF filer (advance ruling period ended prior to June 2008 and the organization did not submit a Form 8734) foundation code is 04
    1. Check advance ruling date on INOLES. If all "0" research EDS.

    2. Research the second page in EDS to determine advance ruling ends date. If the date is prior to June 2008 the organization did not file a Form 8734.

    3. If the advance ruling date is all "9" then the organization was not required to file a Form 8734.

    4. This information should be used to determine what form the organization was liable for in the 3 year time frame prior to revocation.

      Note:

      All 990-PF returns were required to be filed by the due date of the third year to avoid revocation. No relief was offered for private foundations filing form 990-PF.

    Organization states they timely filed with the Virgin Islands  
    1. Check the received date on the return. If received date is prior to due date of third year and is a valid IRS received date (Virgin Island received date is not considered valid), update the status 01, send a letter to the filer and add the EIN and name to the weekly list.

    2. If a valid received date prior to the return due date is not present, instruct the filer they must reapply. Do not update the account.

    The organization is a Single Member LLC or Disregarded Entity   Route to EO Determinations in CSC at the address below.
    Internal Revenue Service
    550 Main St Room 4024
    Cincinnati, OH 45202
    The organization is a government entity   Print the correspondence and give to Lead or Manager who will fax to Cincinnati. Close your control base with "Fax2CSC " and Misc. The fax number is (513) 263-4330.
    The organization states it filed as part of a group return  
    1. Research to determine if a group return was filed. A group return can be identified by presence of a GEN (Group Exemption Number) and 990-03 filing requirements.

      Note:

      Parent organizations (identified by affiliation code 6 or 8) cannot file as part of the group but must file a separate return.

      Note:

      A group return is not considered valid if the group return is filed with all zeroes.

    2. If the subordinate does not have the same GEN as the group return, they cannot be included as part of the group return. Notify the organization they must reapply.

    3. If the subordinate was not included in the group return, notify the organization they must reapply for tax exempt status.

    4. The FYM of the subordinate must match the FYM of the group return. The FYM does not have to match if the organization files a separate return.

    5. If the subordinate was included on the group return, and the group return was filed timely, update the account to status 01. Input a TC 590/014 following update. Send a letter to the organization and include EIN and name on weekly list.

    The organization was a subordinate in a group ruling the parent is revoked but the subordinate is not in status 97
    1. Determine if the organization is a 501(c)(3), (9) or (17). If so the organization must apply for an individual ruling.

    2. Correspond with the organization and provide information on applying for tax exempt status. Route the case to Entity and instruct them to update the account to Status 40.

    3. If the organizations is other than a 501(c)(3), (09) (17) or (29) route the case to Entity and instruct them to update the account to Status 36.

    Organization states they are a homeowners association   Route the case to Entity and request they change the 1120–01 to 1120-10 filing requirements. Send a letter to the filer to disregard the notice.
    Organization states they are a state credit union The credit union is stating they were revoked in error, State chartered credit unions are required to file a return. If a return has not been filed for 3 consecutive years, send a letter stating they must re-apply. If they have filed and just the parent is revoked, route to Entity and request they remove the GEN and update the account to subsection 14, classification 1 and status 36.
    Organization states they are a federal credit union   Route the case to
    CSC Correspondence Unit
    PO Box 2508 Room 4010
    Cincinnati, OH, 45201
    Filer indicates they filed using a different EIN the EIN entity information matches the revoked EIN Route to Entity and request the EINs be consolidated.
    Filer indicates they filed using a different EIN the EIN belongs to another filer, Send a letter to the filer stating they must reapply. Do not move returns and reprocess to the correct EIN.

  6. If an organization is updated to Status 01, a letter must be sent to the filer notifying them of the correction.

  7. If an organization is not updated, send a letter providing information for re-application.

  8. The following should be considered before requesting an account be updated from status 97 to status 01.

    • The applicable years began after December 31, 2006. For example a calendar year filer key years are 200912, 201012, and 201112. If the organization is a fiscal filer with a period ending in March, then its key years are 201003, 201103, and 201203.

      Note:

      The revocation of tax exempt status is an ongoing process. The organization must file at least 1 return in any 3 year period. If an organization fails to file for three consecutive years their tax exempt status will be revoked.

    • If the organization did not file until the third year that began after December 31, 2006, then the third year’s return had to be complete and timely in order for the organization to avoid revocation. Calendar year Form 990 and Form 990-PF filers had to file their third year’s return on or before May 17, 2010 (no relief was granted to these larger organizations). Form 990-EZ filers had to be accepted into the VCP by October 15, 2010, and Form 990-N submitters had to submit their Form 990-N by October 15, 2010.

      Note:

      The information in the bullet above applies to 2009 tax period only.

    • If the DLN of the extension (TC 460) is exactly the same as the DLN of the TC 150 for a 2009 tax period only, then the extension was not one filed by the organization (i.e., it is not valid) and any return/notice filed after the normal due date is considered delinquent.

  9. If the taxpayer asks about the periods for which the organization is required to file a taxable return, correspond and explain the requirement begins with the effective date of revocation. Example: If an organization that is a calendar year filer is revoked effective May 17, 2010, then, unless it applies for and receives exemption retroactive to the date of revocation, it should file a taxable return for the period from May 17, 2010, through December 31, 2010, and continue filing taxable returns until it terminates or it applies for and receives exemption.

  10. An unauthorized individual submitted many 990-Ns for organizations which appeared on the "at risk list" . These are not considered valid submissions and the accounts were manually updated to Status 97. If an account is in status 97 with what appears to be a timely filed 990-N, check against the list retained in EO Accounts. If the EIN is on the list do not update. Correspond with the filer using the approved paragraph which states the 990-N was submitted by an unauthorized individual.

  11. If an account is updated but the TC 150 is past the due date a TC 590/20 must be input on the tax module for the third year return to stop revocation. For example, Master File indicates the return is past due but the organization provides proof of timely submission (certified mail receipt etc). Programming will only research for a timely filed return.

  12. If an account is revoked correctly, correspond with the organization and provide information necessary to reapply for tax exempt status.

  13. A list of organizations updated to status 01 from status 97 should be compiled and sent to the SPP Analyst weekly.

21.7.7.3.2.2  (01-01-2014)
Foundation, Affiliation and Organization Codes

  1. There are other fields in the EO section, such as the Foundation, Affiliation, and Organization codes, which are useful when researching and resolving EO account related issues. See tables below for specific codes and explanations.

    Foundation Codes (FOUN)
    (These codes are present with SS 03 accounts only)
    00 IRC 4947(a)(1)
    02 Exempt operating foundation described in IRC 4940(d)(2)
    03 Private operating foundation
    04 Private non-operating foundation
    09 Suspense (a specific type not identified)
    10 Church (IRC 170(b)(1)(A)(i))
    11 School (IRC 170(b)(1)(A)(ii))
    12 Hospital (IRC 170(b)(1)(A)(iii))
    13 Organizations operated for the benefit of a college or university ( IRC 170(b)(1)(A)(iv))
    14 Federal, state or local government unit (IRC 170(b)(1)(A)(v))
    15 Organization receiving support from governmental unit or general public ( IRC 170(b)(1)(A)(vi))
    16 General, public charity (IRC 509(a)(2))
    17 Public charity supporting (FC 09-15) (IRC 509(a)(3))
    18 Public safety (IRC 509(a)(4))
    21 509(a)(3) Type I
    22 509(a)(3) Type II
    23 509(a)(3) Type III functionally integrated
    24 509(a)(3) Type III not functionally integrated

    Affiliation Codes (AFF)
    1 Central organization (individual ruling)
    2 Intermediate organization (individual ruling)
    3 Independent organization (individual ruling)
    6 Central organization in a group ruling (not a church)
    7 Intermediate parent (subordinate by state)
    8 Central organization in a church group ruling
    9 Subordinate of a group ruling
    Type of Organization (ORG)
    1 Corporation
    2 Trust
    3 Cooperative
    4 Partnership
    5 Association
    6 Non-Exempt Charitable Trust (NECT)

21.7.7.3.3  (01-01-2014)
Gross Receipts Test

  1. To determine whether an organization's gross receipts are normally to be $50,000 or less, apply the following test. An organization's gross receipts are considered normally to be $50,000 or less if the organization is:

    • Up to a year old and has received, or donors have pledged to give, $37,500 or less during its first tax year.

    • Between one and three years old and averaged $30,000 or less in gross receipts during each of its first two tax years.

    • Three years old or more and averaged $50,000 or less in gross receipts for the immediately preceding three tax years (including the year for which the return would be filed).

21.7.7.3.4  (01-01-2014)
Extensions of Time to File (EO)

  1. Form 8868, Application for Extension of Time to File an Exempt Organization Return, is used to request an automatic three month extension of time to file Form 990, Form 990-EZ, Form 990-PF, Form 990-BL, Form 990-T, Form 1041-A, Form 1041 (for NECTs) , Form 1065 (for 501(d) organizations), Form 4720, Form 5227, Form 6069 and Form 8870. If necessary, an additional three month (not automatic) extension can also be requested.

  2. Form 7004 is used to request an automatic six month extension of time to file for Form 1120-POL .

  3. Refer to IRM 21.7.7.4.22 for additional information regarding extensions.

21.7.7.3.5  (01-01-2014)
EO Estimated Tax Payments

  1. Most EOs are required to make ES payments on their unrelated business income tax as if they were corporations.

    Note:

    Form 990-PF filers do not need to make their first payment until the fifteenth day of the fifth month of their tax year. This would be May 15 for calendar year filers.

  2. Tax exempt organizations use Form 990-W to compute their estimated tax. Estimated tax must be paid with EFTPS, if required.

  3. Refer to IRM 21.7.7.4.23.2 for additional information.

21.7.7.3.6  (01-01-2014)
Disclosure

  1. Returns and return information of a tax-exempt organization which are publicly available under IRC 6104 may be disclosed to any requester making a proper request. However, returns and return information which are not publicly available under IRC 6104 are protected by IRC 6103 and may not be disclosed unless authorized by a section of 6103 of the Internal Revenue Code.

  2. Most items on Form 990-PF are disclosable. Almost everything on Form 990 and Form 990-EZ except for the names and addresses of contributors and identifying contributions amounts and everything included on tax exempt Political Organization returns (Form 990 with IRC 527 box checked, Form 8871, Form 8872 and Form 8453-X) can be disclosed.

  3. The Tax Technical Corrections Act of 2007, Pub. L. 110-172, H.R. 4839, provides that the Internal Revenue Service is required to make Forms 990-T that are filed by a section 501(c)(3) organization publicly available for inspection and copying pursuant to section 6104(b). This provision is effective for returns filed after August 17, 2006, the date of enactment of the Pension Protection Act of 2006, Pub. L. 109-280 (PPA). It applies only to Forms 990-T filed to report UBIT. If the return was filed only to claim erroneous back-up withholding, for example, it is not open under IRC 6104.

  4. Form 5227, with the exception of Schedule A, is also open for public disclosure.

  5. Form 1120-POL is not open for public inspection as a result of legislation enacted on November 2, 2002. See IRM 11.3.9 for more information regarding disclosure. If there is a question as to whether information can be disclosed or not, contact the local Disclosure manager.

  6. Requests for approved applications and for returns or CD/DVDs must be made in writing on Form 4506-A. All inquiries or Forms 4506-A received in EO Accounts must be routed to the RAIVS Unit (MS: 6716). Refer to IRM 11.3.9, Exempt Organizations, for additional disclosure information.

21.7.7.3.7  (01-01-2014)
Public Inspection

  1. Internal Revenue Code (IRC) 6104(a)(1)(A) requires the Internal Revenue Service (IRS) to make available for public inspection:

    • The approved application for exemption of any organization or trust described in IRC 501(c) or IRC 501(d) determined by the IRS to be exempt from taxation under IRC 501(a) for any taxable year;

    • The approved notice of status of an organization under IRC 527(i);

    • Any documents filed in support of such application or notice; and

    • Any letter or other document issued by the IRS pertaining to the application or notice, if the application or notice was filed November 1, 1976 or thereafter.

    • Public Law 106-230 requires IRS to make Forms 8871, Political Organization Notice of Section 527 Status, and Forms 8872, Political Organization Report of Contributions and Expenditures, (forms created as a result of the Law) available for public inspection.

  2. In addition, the IRS must furnish, upon request, a statement indicating the subsection and paragraph of IRC 501 which describes the exempt organization or trust. However, the disclosure of certain information relating to trade secrets, patents, processes, style of work or apparatus of an organization, or national defense information may be restricted. Refer to IRM 11.3.9, for a description of the documents available for disclosure and further explanation of disclosure limitations.

  3. IRC 6104(d) requires that certain annual returns, reports, applications for exemption, and notices of status be available for public inspection. Generally, the exempt organization is responsible for making these documents available for public inspection at its principal office and local or field offices having three (3) or more employees.

  4. The organization need not disclose any portion of an application relating to trade secrets, national defense, etc., which also would not be disclosed by the IRS. Withholding of this information is made upon determination by the IRS based on request by the organization.

  5. The public disclosure rules apply both to information submitted that is required by the forms and to information submitted voluntarily.

  6. Correspondence from persons unable to obtain a copy of a return from the organization should be routed to the appropriate Exam Classification Site. Refer to IRM 21.7.7.4.15 for the address.

21.7.7.3.7.1  (01-01-2014)
Commonly Requested Documents

  1. The most commonly requested documents which are made available for public inspection in accordance with IRC 6104(a)(1)(A) and IRC 6104(b) are:

    • Form 990, Return of Organization Exempt from Income Tax and all related schedules

    • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, and attachments required to be filed with the Service. For organizations (other than a Section 527 with periods beginning after 6-30-2000).

    • Schedule A, Organization Exempt Under 501(c)(3)

    • Schedule B, Schedule of Contributors

      Note:

      Names and addresses of contributors must not be disclosed. Amounts of contributions may be disclosed but only if amount could not reasonably be expected to identify a contributor.

    • Form 990-PF, Return of Private Foundation

    • Form 990-T, Exempt Organizations Business Income Tax Return, (501(c) (3) organizations filed after August 17, 2006)

    • Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of IRC, and supporting documents.

    • Form 1024, Application for Recognition of Exemption Under Section 501(a) and supporting documents

      Note:

      Denied applications are available, in redacted form, pursuant to section 6110.

    • Form 1041-A, U.S. Information Return-Trust Accumulation of Charitable Amounts

    • Form 5227, Split Interest Trust (for tax years beginning on or after January 01, 2007)

    • Form 1065, if filed by an organization described in IRC Section 501(d) (EO submodule-Subsection 40)

      Note:

      If Schedule K-1 is attached to a Form 1065, redact everything except the title of the schedule.

    • Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of IRC, if filed by a private foundation. (Form 4720 filed by individuals are not subject to disclosure provisions of IRC 6104)

    • Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt from Federal Income Tax

    • Form 8871, Political Organization Notice of Section 527 Status

    • Form 8872, Political Organization Report of Contributions and Expenditures

    • Form 8453-X, Declaration of Electronic Filing of Notice of Section 527 Status

  2. Certain information in returns otherwise open to public inspection must be withheld by IRS from public inspection (and need not be disclosed by the exempt organization):

    • Names and addresses of contributors to the organization (generally set forth in Schedule B) in the annual information return, except for contributors to private foundations and 527 political organizations

    • Schedules K-1 filed by 501(d) organizations

    • Schedule A of Form 990-BL

    • For returns for tax years beginning on or after Jan. 1, 2007, information regarding non-charitable beneficiaries in Form 5227.

21.7.7.3.7.2  (01-01-2014)
Public Inspection of Form 990-PF

  1. Private Foundations must provide copies of the approved applications for exemption and their three (3) most recent Form 990-PF returns to anyone who requests them:

    • Immediately, if the request is made in person.

    • Within 30 days if the request is made in writing.

    • By making the document widely available via the Internet.

    Note:

    The organization must comply with requests for inspection made in person, even if the documents are made widely available.

  2. Organizations may apply to be excused from fulfilling the requirements if they can prove that requests for their materials are part of a harassment campaign.

21.7.7.3.7.3  (01-01-2014)
Penalty for Failure to Comply with the Public Inspection

  1. If an organization fails to comply with the public inspection requirement by the date and in the manner prescribed under IRC 6104(d) , a penalty of $20 a day may be imposed on any person with a duty to comply for each day the failure continues.

  2. The maximum penalty on all persons for any one return is $10,000.

21.7.7.3.7.4  (01-01-2014)
Requests for Copies of Returns and Exemption Applications

  1. To request a copy of an exempt or political organization return, report, notice or approved exemption application from the IRS, the requestor may submit a complete Form 4506-A, Request for Public Inspection or Copy of Exempt or Political Organization IRS Form.

  2. Use the following chart to determine where to submit the written request or Form 4506-A.

    If Taxpayer wants Then submit Form 4506-A with the
    to inspect a return, report, notice, or an exemption application at an IRS office,
    Internal Revenue Service
    Attn: Disclosure Scanning Operations Stop 93A
    PO Box 621506
    Atlanta, GA 30362-3006
    to inspect a return, report, notice, or exemption application at the IRS National Headquarters, Commissioner of Internal Revenue
    Attn: Freedom of Information Reading Room 1621
    1111 Constitution Ave., NW
    Washington, D.C. 20224
    a copy of an exemption application, Internal Revenue Service
    TE/GE Adjustments Unit
    P.O. Box 2508, Room 4024
    Cincinnati, OH 45201
    Fax: 513-263-3434
    a copy of a return, report or notice,
    Internal Revenue Service
    MS: 6716
    Ogden, UT 84201
    Fax: 801-620-7896

  3. The request should indicate the type of return and the year(s) involved, if applicable. Charges for copies can be found in IRM 3.20.13.

  4. If an exempt organization requests an " unredacted " copy of its own return under IRC 6103, then a Form 4506, Request for Copy of Tax Return, must be completed and submitted to the address shown below. The fee shown on Form 4506 must be pre-paid.

    Internal Revenue Service
    P.O. Box 9941
    RAIVS Team
    MS: 6734
    Ogden, UT 84409

  5. Route all Form 4506-A requests received in EO Accounts to OSPC, EO Photocopy Unit, MS: 6716.

  6. Requests for copies of exemption applications only are sent to the address shown below or faxed to 513-263-3434.

    TE/GE Adjustments Unit
    P.O. Box 2508 Room: 4024
    Cincinnati, OH 45201

21.7.7.3.7.5  (01-01-2014)
CD and DVD Requests

  1. Electronic copies (images) of certain exempt organization returns filed with the Internal Revenue Service are available. Depending on the type of return, the type of filer, and the year the return was filed, these images may be available in both CD and DVD formats.

  2. Currently, Form 5227 is not available on DVD.

  3. CD/DVDs are available at no cost to members of the media and other government agencies.

  4. Refer to IRM 3.20.13 for a complete listing of what returns are available, formats and the related charge for other customers.

  5. Requests for CDs or DVDs must be submitted on a Form 4506-A, Request for Public Inspection or Copy of Exempt Organization IRS Form, and pre-paid. The form can be faxed to the EO Photocopy unit at 1-801-620-7896 or mailed to the address shown below.

    Internal Revenue Service
    EO Photocopy MS: 6716
    Ogden, UT, 84201

  6. Additional information regarding CD/DVDs can be found at www.irs.gov/charities.

21.7.7.3.8  (01-01-2014)
Imaging Background

  1. The Ogden Submission Processing Campus (OSPC) began the Imaging process in July 1998. It replaced the aperture card (microfiche) process for Form 990-PF. The Imaging process scans returns and attachments on high-speed scanners to produce images on a DVD ROM. The Internal Revenue Service sells CD/DVDs with images of all Form 990-PF, Form 990 and Form 990-EZ returns to various watch dog groups including The Foundation Center, The Urban Institute and other entities throughout the country. These various groups provide comprehensive information on a foundation's grant making interests, limitations, application procedures and funding patterns. Additionally, many grant seekers use this information for research.

  2. The following is a list of forms that are currently imaged.

    • Form 990

    • Form 990-EZ

    • Form 990-PF

    • Form 990-T

    • Form 5227

    • Form 4720

  3. All EO returns received from the organization (original or amended) are imaged "as filed." The Imaging Unit scans the returns prior to being edited by Code and Edit. All returns processed through the imaging system will have a " filmed" or "scanned" stamp and date in the left-hand margin on the first page of the return. Additionally, all political organization returns, Form 8871 or Form 8872, should also have the scanned stamp. If not, the return will have to be identified for scanning by following the procedures shown below.

21.7.7.3.8.1  (01-01-2014)
Imaging Refilm Procedures

  1. When additional information is received from an organization (i.e., missing forms, schedules, missing signature.) the tax examiner must determine what information needs to be scanned. Refer to the following procedures when additional items need to be scanned.

    1. Photocopy the document(s) to be imaged. Do not write on the documents to be imaged.

    2. Attach a modified print of BRTVU to the front of the information to be scanned. The BRTVU print must be thoroughly edited and contain only the EIN, tax period, subsection code, form type (F990, 990-EZ, etc., not just the MFT) and entity information of the original filed return.

      Reminder:

      The subsection code is located in the EO section on BMFOLO, ENMOD or INOLES and must be manually entered on the print.

    3. Place the refilm items in a separate folder behind the brown gusset folder containing the current day's closures.

    Caution:

    Do not write on the documents to be imaged.

  2. The photocopied information is treated as classified waste and destroyed after the Imaging unit has scanned the photocopied item(s).

    Note:

    Re-scan documents must be routed to the Imaging unit on a daily basis regardless of the volume.

  3. The following is a list of items that may require scanning:

    • The entire original return if the lower left-hand margin of the first page of the return has not been stamped " SCANNED " by the Imaging Unit.

    • The entire amended return, if the left-hand margin of the first page on the return has not been stamped " SCANNED " by the Imaging Unit.

    • All forms/attachments submitted by the organization in response to IRS correspondence for FORM(S)/ATTACHMENT(S) LEFT OFF the return as it was originally filed.

  4. As stated above, amended returns are imaged prior to processing. Therefore,changes to the EIN, name or tax period (i.e., reprocessable/reinputs) do not require re-imaging.

    If Then Route to
    the original or amended return has not been processed (No DLN on return), attach Form 12634 (green routing slip) and annotate in the remarks area "Process as original return" Batching -
    MS: 6054
    the original or amended return has been processed (return has a DLN), but the return has not been stamped "scanned ," , 1) Take the appropriate adjustment action on the module and close the control base.
    2) Attach Form 12634 (green routing slip) and annotate in the remarks area "Original/amended return not scanned. Route to Files after imaged."
    Imaging Unit -
    MS: 6058
    a copy of an original or amended return is received with additional missing information (i.e., forms, schedules,signature, etc.), follow procedures outlined in 21.7.7.3.8.1 above. Imaging Unit
    MS: 6058
     

    Reminder:

    When additional information (missing schedules/forms, signature) is attached to a copy of the original or amended return, only the missing information is to be scanned. Returns that are "re-input" or "reprocessed" to a another EIN or tax period, are not reimaged.

  5. MeF returns are extracted and imaged by SOI and no longer require special handling. MeF returns are available for viewing on either the Employee User Portal (EUP) or the On Line Statistics of Income Exempt Organizations Return Image Net (OL-SEIN). OL-SEIN is a system that allows viewing of an unredacted image of an EO return.

21.7.7.3.9  (01-01-2014)
Section 527 Political Organizations

  1. A political organization subject to IRC 527 is a party, committee, association, fund (including a separate segregated fund described in IRC 527(f)(3)) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures (or both) for an exempt function.

  2. The exempt function of a political organization is influencing or attempting to influence the selection, nomination, election or appointment of an individual to any public office or office in a political organization, or the election of the Presidential or Vice Presidential electors.

  3. A political organization must be organized for the primary purpose of carrying on exempt function activities. A political organization does not need to be formally chartered or established as a corporation, trust, or association. A separate bank account in which political campaign funds are deposited and disbursed only for political campaign expenses can qualify as a political organization. When there are no formal organizational documents, consideration is given to statements of the members of the organization at the time of its formation that they intend to operate the organization primarily to carry on exempt function activities. A political organization may engage in activities that are not exempt function activities, but these may not be its primary activities.

  4. Political organizations include principal campaign committees, newsletter funds, and certain separate segregated funds maintained by tax-exempt organizations.

  5. A principal campaign committee is the political committee designated by a candidate for U.S. Congress as his or her principal campaign committee for purposes of IRC 302(e) of the Federal Election Campaign Act of 1971 and IRC 527(h).

  6. Political organizations that have tax-exempt status under IRC 527 of the Internal Revenue Code (unless exempted from filing) must file some or all of the forms listed as a condition of tax-exempt status:

    • Form 8871, Political Organization Notice of Section 527 Status,

    • Form 8872, Political Organization Report of Contributions and Expenditures,

    • Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status,

    • Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations,

    • Form 990, Return of Organization Exempt from Income Tax or

    • Form 990-EZ, Short Form Return of Organization Exempt from Income Tax.

  7. On December 2, 2002, Public Law 107-276 was enacted, amending IRC 527. The new law revised the reporting and disclosure requirements for tax exempt political organizations described in IRC 527 with respect to the following:

    • Notice of status;

    • Periodic reports of contributions and expenditures;

    • Annual returns.

  8. The new law substantially reduces the number of organizations required to file the various forms with the IRS and makes those changes retroactive to July 1, 2000. Organizations required to file Form 8871 and Form 8872 must report additional information starting December 2, 2002. Certain organizations filing Form 8872 due after June 30, 2003, must file electronically.

  9. The new provisions eliminated the need for many political organizations to file certain federal tax reports and returns. The law also created a new sub-category of political organization – Qualified State or Local Political Organization (QSLPO). A state or local organization may be a QSLPO, if it meets the following criteria:

    • All of its political activities relate solely to state or local public office (or office in a state or local political organization);

    • It is subject to state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS;

    • The state agency and the organization make the reports publicly available;

    • No federal candidate or office holder controls it or materially participates in its direction, solicits contributions for it, or directs any of its disbursements.

    For additional information, refer to IRC 527(e)(5) and Rev. Rul. 2003-49, 2003-20 I.R.B. 903.

  10. Federal tax law divides political organizations into several different categories, and provides different filing requirements for each category as shown in the table below:

    Filing Categories
    Federal Organizations
    • FEC political committee - A political organization (including federal candidate committees, political party committees and PACs) required to report as a political committee under the Federal Election Campaign Act.

    • Other federal political organizations - A political organization that attempts to influence federal elections and is not required to report as a political committee under the Federal Election Campaign Act.

    State and Local Organizations
    • Candidate Committee - A campaign committee of a state or local candidate.

    • Party Committee - A state or local committee of a political party.

    • Qualified State or Local Political Organization (QSLPO) – (See list of criteria above).

21.7.7.3.9.1  (01-01-2014)
Filing Requirements
General Information

  1. Legislation adopted in 2002 altered filing requirements for certain political organizations that seek tax-exempt status under IRC 527. The new law reduced or modified the tax filing requirements for certain state and local political organizations that already disclose information to state agencies. In addition, the law relieves some political organizations from filing an annual income tax return or an annual information return. Except where noted, the revised filing requirements are retroactive to July 1, 2000. The current filing requirements, as revised by the new legislation, are shown below. The new law:

    • Exempts state and local candidate and party committees from filing Form 8871 and Form 990 or Form 990-EZ.

    • Exempts QSLPOs from filing Form 8872.

    • Exempts political committees from filing Form 990 or Form 990-EZ with the Federal Election Commission (FEC).

    • Exempts political organizations that are a caucus or association of state or local officials from filing Form 990 or Form 990-EZ.

    • Requires additional information on Form 8871 and Form 8872.

    • Requires the filing of an amended Form 8871 within 30 days after material changes to maintain tax-exempt status.

    • Increases reporting thresholds for certain Form 990 filers.

    • Eliminates the requirement to file Form 1120-POL except where an organization has taxable income after the $100 specific deduction (returns to pre July 2000 requirements).

    • Reinstates the pre-July 2000 confidentiality requirement for any Form 1120-POL filed after November 2, 2002.

    • Changes the electronic filing requirements by:
      a) Requiring Form 8871 be filed electronically (as opposed to both in writing and electronically); and
      b) Requiring any Form 8872 due after June 30, 2003, be filed electronically if the filing organization has or expects to have contributions or expenditures of more than $50,000 during the calendar year.

  2. The political organization must have its own employer identification number (EIN), even if it does not have any employees. To get an EIN, an organization must file Form SS-4, Application for Employer Identification Number. See Form SS-4 instructions for more information.

  3. Additionally, many political organizations must electronically file their periodic reports. In order to electronically file these reports, an organization needs the user name and password issued to it after filing its initial notice. If the user name and password are forgotten or misplaced, the political organization can fax or send a letter requesting a new user name and password to:

    Internal Revenue Service
    Attn: Request for 8872 Password
    Mail Stop: 6273
    Ogden, UT 84201
    Fax: 801-620-3249

  4. The filing requirements in the table below apply to those political organizations that wish to be a tax-exempt political organization and that receive or expect to receive $25,000 or more in gross receipts in any taxable year.

    If the Organization
    is a
    It May Be Required
    to File
    FEC political committee,
    State or local candidate committee or
    State or local committee of a political party,
    Form 1120-POL
    Qualified state or local political organization (QSLPO)*, Form 8871;
    Form 1120-POL; and
    Form 990
    Caucus or association of state or local officials*, Form 8871;
    Form 8872; and
    Form 1120-POL
    Any other political organization, including other state or local political organizations, Form 8871;
    Form 8872;
    Form 1120-POL;
    Form 990 or
    Form 990-EZ


    * An organization may be both a QSLPO and a caucus or association of state or local officials. If so, it is not required to file Form 8872 and Form 990.

  5. If the organization is:

    • A political organization that is not tax-exempt, or

    • A tax-exempt political organization that does not have gross receipts of at least $25,000,

    Form 1120-POL must be filed if there is taxable income (after taking the $100 specific deduction) for any taxable year.

  6. The new law changed the electronic filing requirements for political organizations that file Form 8871 and/or Form 8872. To be tax-exempt, certain political organizations must file Form 8871 within 24 hours of establishment and within 30 days of any material change. Form 8871 must now be filed only electronically, which is a change from the previous provision that required an organization to file both in paper form and electronically. Under the new law, an organization must file Form 8872 electronically if it has, or expects to have, contributions or expenditures of more than $50,000 during the calendar year.

21.7.7.3.9.1.1  (01-01-2014)
Initial Notice, Periodic Reports, Annual Income Tax and
Information Returns

  1. Political parties, campaign committees for candidates for federal, state or local office, and political action committees (PACs) are all political organizations subject to tax under IRC 527. IRC 527 organizations, unless excepted, are generally required to file one or more of the following:

    • An Initial Notice

    • Periodic reports on contributions and expenditures

    • Annual income tax returns and

    • Annual information returns

21.7.7.3.9.1.1.1  (01-01-2014)
Initial Notice

  1. To be tax-exempt, a political organization is required to notify the IRS electronically that the organization is to be treated as a IRC 527 organization. It must also notify the IRS within 30 days of any material change, including termination, to maintain its tax-exempt status.

  2. To notify the IRS, the organization must file Form 8871. To complete the electronic filing, the political organization must print the electronically submitted Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status, sign it, and mail the "Declaration of Electronic Filing" to:

    Internal Revenue Service Center
    Ogden, UT 84201

  3. The following political organizations are not required to report Form 8871:

    • Any person required to report to the FEC;

    • Any political committees of a state or local candidate;

    • Any state or local committee of a political party;

    • Any organization reasonably anticipating that its gross receipts will always be less than $25,000 for any taxable year; and

    • Any organization described in IRC 501(c) that is subject to IRC 527(f)(1) because it has made an "exempt function" expenditure.

21.7.7.3.9.1.1.2  (01-01-2014)
Periodic Reports

  1. Unless excepted, tax-exempt political organizations are required to file periodic reports with the IRS. Political organizations are excepted from filing these periodic reports (Form 8872) if they are not required to file Form 8871 (including organizations required to report as political committees with the FEC) or are qualified state and local political organizations.

  2. All other political organizations are required to file Form 8872 to report the names, addresses, and (if an individual) the occupation and employer of any person to whom expenditures are made that aggregate $500 or more in a calendar year and the amount, date and purpose of each expenditure. The report must also include the name, address, and (if an individual) the occupation and employer of any person who contributes a total of $200 or more in a calendar year, and the amount and date of each contribution. Expenditures made or contributions received after July 1, 2000, must be reported, except for those made or received pursuant to binding contracts entered into before July 2, 2000.

  3. An organization must file the Form 8872 electronically if it has contributions or expenditures of over $50,000.

21.7.7.3.9.1.1.3  (01-01-2014)
Annual Income Tax Returns

  1. Political organizations with taxable income after taking the $100 specific deduction must file Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.

21.7.7.3.9.1.1.4  (01-01-2014)
Annual Information Returns

  1. Tax-exempt political organizations with gross receipts of $25,000 or more for taxable years beginning after June 30, 2000, are required to file Form 990. Certain small political organizations may file Form 990-EZ instead. Political organizations that receive contributions of $5,000 or more from any one contributor will be required to include Form 990, Schedule B with their return.

  2. Qualified state and local political organizations are only required to file Form 990 if they have gross receipts of $100,000 or more for taxable years beginning after June 30, 2000.

  3. A tax-exempt political organization is not required to file Form 990 if it is:

    • Not required to file Form 8871 (including an organization required to file as a political committee with the FEC) or

    • A caucus or association of state or local officials.

  4. All of these notices, reports, and returns (except for Form 1120-POL) are to be made publicly available by the IRS and by the organization. Penalties are provided for failure to comply with these requirements.

  5. The filing requirements in the table below apply to those political organizations that:

    • Wish to be exempt from federal income tax provisions, and

    • Receive or expect to receive $25,000 or more in gross receipts in any taxable year.

    Form When Filed Exceptions to Filing Requirement
    Form 8871 Within 24 hours of establishment or within 30 days of any material change, including termination
    • Organization that does not seek tax-exempt status;

    • IRC 527 Political committee required to report to the FEC;

    • Campaign committee of state and local candidates;

    • State or local committee of political parties; and

    • Organization that reasonably expects annual gross receipts to always be less than $25,000.

    Form 8872 At organization's option, quarterly/semiannually or monthly, on same basis for entire calendar year (see form instructions for detailed information)
    • Any organization excepted from Form 8871 filing requirement (see above); and

    • Qualified state or local political organization (QSLPO).

    Form 1120-POL Due the 15th day of the 3rd month after the close of the taxable year
    • Organization with no political organization taxable income after taking the $100 specific deduction.

    Form 990 or Form 990-EZ Due the 15th day of the 5th month after the close of the taxable year
    • Any organization excepted from Form 8871 (see above); and

    • Caucus or association of state or local officials

21.7.7.3.9.1.2  (01-01-2014)
Section 527 Disclosure Requirements

  1. Tax exempt IRC 527 organizations must make their forms (other than Form 1120-POL) publicly available for inspection and copying at their principal place of business. The IRS also posts Form 8871 and Form 8872 on its web site at: http://forms.irs.gov/politicalOrgsSearch/

21.7.7.3.10  (01-01-2014)
EO Command Codes

  1. CC BMFOL with definer "O" displays the Exempt Organization data for a specific EIN. Available information includes Group Exemption Number (GEN), Area Office (AO), current and prior status, and filing requirements.

  2. Use CC EOGEN to locate the EIN of a central, group, or subordinate organization. EOGEN does not provide full entity information for subordinates. CC EOGEN requests group ruling information for an exempt organization - both central organizations and subordinates. The GEN is a four digit number located in the EO Entity section of an account which can be accessed by using CC ENMOD, INOLES, or BMFOLO. CC EOGEN with definers "P " and "S" are explained below:

    • Definer "P" provides the central organization information.

    • Definer "S" provides the subordinates listing. This is limited to 30 pages, with 20 subordinates per page. To narrow the search for subordinates, enter the two character state abbreviation code.

    • IRM 2.3.47 contains the format for input of CC EOGEN.

21.7.7.3.11  (01-01-2014)
Undeliverable CP 120A, 152 or 299

  1. If undeliverable CP 120A, 152 or 299 are received in Accounts Management, destroy the notices per local procedures without conducting any research for another address.

21.7.7.3.12  (01-01-2014)
List of EO and GE Forms

  1. The following is a list of EO and GE forms:

    • Form 990, Return of Organization Exempt From Income Tax Under Section 501(c) of the Internal Revenue Code (except black lung benefit trust or private foundation) or Section 4947(a)(1) Nonexempt Charitable Trust

    • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax Under Section 501(c) of the Internal Revenue Code (except black lung benefit trust) or Section 4947(a)(1) Nonexempt Charitable Trust

    • Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under Section 6033(e))

    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation

    • Form 990-BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons

    • Form 990-N,Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required To File Form 990 or 990-EZ

    • Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations (and on Investment Income for Private Foundations)

    • Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations

    • Form 1041-A, U.S. Information Return Trust Accumulation of Charitable Amounts

    • Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal Revenue Code

    • Form 5227, Split-Interest Trust Information Return

    • Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax

    • Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation (Under Section 501(h) of the Internal Revenue Code)

    • Form 6069, Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction

    • Form 7004, Application for Automatic 6 month Extension of Time to File Certain Business Income Tax, Information and Other Returns (for extending Form 1120-POL and Form 1065 in the case of 501(d) organizations)

    • Form 8282, Donee Information Return ( Sale, Exchange, or Other Disposition of Donated Property)

    • Form 8453-EO, Exempt Organization Declaration and Signature for Electronic Filing

    • Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status

    • Form 8868, Application for Extension of Time To File an Exempt Organization Return

    • Form 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction

    • Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts (Under section 170(f)(10))

    • Form 8871, Political Organization Notice of Section 527 Status

    • Form 8872, Political Organization Report of Contributions and Expenditures

    • Form 8879-EO, IRS e-file Signature Authorization for an Exempt Organization

    • Form 8899, Notice of Income from Donated Intellectual Property

    • Form 8038 series, Tax Exempt Bonds (Refer to IRM 21.7.7.5 for detailed information regarding TEBs.)

    • Form 8328, Carryforward Election of Unused Private Activity Bond Volume Cap

    Note:

    All references to Form 990 (unless otherwise noted) also apply to Form 990-EZ. Form 990-EZ is designed for use by smaller tax exempt organizations and nonexempt charitable trusts having gross receipts of less than $200,000 during the year and total assets at the end of the year less than $500,000. See IRM 21.7.7.4.1.1.1 for additional information.

21.7.7.3.12.1  (01-01-2014)
Form 990 and Form 990-EZ Revision

  1. Both Form 990 and Form 990-EZ were redesigned for Tax Year (TY) 2008. The redesign of Form 990 resulted in a core form consisting of 12 pages and includes numerous schedules. Schedules that are open for public inspection are clearly identified in the upper right hand corner by the following statement, Open to Public Inspection.

  2. The redesigned Form 990-EZ includes a new Part VI and is now four pages long. The Form 990-EZ was modified to allow the use of the same schedules that are valid for Form 990 (Schedules A, B, C, E, G, L, N and O). T

  3. In addition, certain information that is no longer required to be reported on Form 990 (as a result of its redesign) has also been eliminated from the Form 990-EZ. Refer to IRM 21.7.7.4.1.1 for additional information on the redesigned Form 990 and Form 990-EZ.

21.7.7.3.13  (01-01-2014)
Due Dates

  1. The table below shows the form type, MFT, taxability, and due dates for various EO returns.

    Form, MFT, Taxability and
    Due Date
    Form MFT Taxable or Non-taxable Due Date
    Form 990 or Form 990-EZ 67 NON 15th day of 5th month.
    Form 990-PF 44 TAX 15th day of 5th month.
    Form 990-T 34 TAX * See note below
    Form 5227 37 NON 15th day of 4th month.
    Form 4720 50 TAX *See note below
    Form 1041-A 36 NON 15th day of 4th month.
    Form 1120-POL 02 TAX 15th day of 3rd month.
    Form 8453-X 00 NON *See note below
    Form 8871 47 NON Due within 24 hours of the date on which the organization was established
    Form 8872 49 NON * See Note below

    Note:

    Form 990-T – Type of Org. Code 3: Due 15th day of 4th month. (IRC 401(a), IRC 408(a), and IRC 220(d) Trusts)
    Type of Org. Codes 1, 2, 4 and 5: Due 15th day of the 5th month (Corporations & Exempt Trusts).

    The computer uses the type of organization code shown on BRTVU to determine the return due date. Do not use the organization code shown on ENMOD or BMFOLO when determining the return due date for Form 990-T.

    Note:

    Form 4720 , if filed with a Form 990, Form 990-EZ, Form 990-PF or Form 5227 filer, has the same due date as the related Form 990, Form 990-EZ, Form 990-PF or Form 5227.

    Note:

    Form 8872 , the due dates vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election was held or any other calendar year. During an election year, the reports may be filed on either a quarterly or a monthly basis. They are also due shortly before and after the primary and general elections. During a non election year, the reports may be filed on either a semiannual or monthly basis; but in either case, they must be filed on the same basis for the entire calendar year.

    Note:

    Form 8453-X

    automatically appears on the filer's computer screen once Form 8871 is submitted electronically for the new political organization to complete. The organization must print the form, sign it, and mail it to the Ogden Campus. In doing so, the electronic filing of Form 8871 is authenticated.

  2. The table below shows the due dates for both fiscal and calendar year filers:

    EO Fiscal and Calendar Year
    Due Dates
    FY Form 4720 & Form 990-T
    DUE DATE
    Form 990-T, Form 990-PF, Form 4720, Form 990, Form 990-EZ or Form 990–N DUE DATE Form 1041-A & Form 5227
    DUE DATE

    (See "Note" below)
    Form 1120-POL DUE DATE
    01 05/15 06/15 * 04/15
    02 06/15 07/15 * 05/15
    03 07/15 08/15 * 06/15
    04 08/15 09/15 * 07/15
    05 09/15 10/15 * 08/15
    06 10/15 11/15 * 09/15
    07 11/15 12/15 * 10/15
    08 12/15 01/15 * 11/15
    09 01/15 02/15 * 12/15
    10 02/15 03/15 * 01/15
    11 03/15 04/15 * 02/15
    12 04/15 05/15 04/15 03/15

    Note:

    Form 5227 and Form 1041-A are due on or before April 15 following the close of the calendar year.

21.7.7.3.14  (01-01-2014)
Modernized Electronic Filing

  1. Modernized e-File (MeF) provides electronic filing and payment options for businesses that include corporations, exempt organizations, partnerships and filers of excise tax returns. The following form types can be e-filed through the MeF platform:

    • Form 990

    • Form 990-EZ

    • Form 990-PF

    • Form 990-N

    • Form 1120-POL

    • Form 8868

    • Form 7004

  2. A list of approved IRS e-file software providers can be found at www.irs.gov. The listings contain addresses, phone numbers and links to their web sites. They are updated as new providers are added.

  3. Information regarding which forms, tax years, and schedules are acceptable for (and those excluded from) e-filing can be found in Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters.

  4. Certain exempt organizations are required to file their return electronically. For tax years ending on or after December 31, 2006, exempt organizations that met the following criteria must file electronically.

    • $10 million or more in total assets

    • File at least 250 returns in a calendar year. This includes income, excise, employment tax, and information returns (e.g. Forms 941, Forms W-2, Forms 1098).

  5. Private foundations and non-exempt charitable trusts that are treated as private foundations are required to file Forms 990-PF electronically regardless of their assets if they file at least 250 returns annually.

  6. MeF returns can be identified on IDRS by DLNs with a file location code (first two digits of the DLN) of " 93 " or " 92 " (overflow).

  7. The return in its entirety can be viewed and/or printed by accessing the MeF Employee User Portal (EUP). Refer to IRM 3.42.4 , IRS e-file for Business Tax Returns, for procedures to access and use the EUP.

21.7.7.3.14.1  (01-01-2014)
MeF Waivers

  1. Notice 2005-88 establishes criteria under which exempt organizations can request a waiver from the electronic filing requirement:

    • Where the exempt organization cannot meet electronic filing requirements due to technology constraints; or

    • Where compliance with the requirements would result in undue financial burden on the filer.

  2. Waiver requests are processed by the Ogden Campus. Organizations that request a waiver of the requirement to file their returns electronically will receive Letter 4069C from the e-Help Desk informing them whether their request was granted or not. If the request is denied, the letter will explain why. If the request is granted, the approval applies only to the tax period requested in the waiver. TC 971 AC 322 indicates the waiver request was approved and TC 971 AC 323 indicates it was denied. These codes are displayed on ENMOD and BMFOLE.

21.7.7.3.14.2  (01-01-2014)
MeF Rejected Returns

  1. If an organization attempts to file a return electronically and is unable to do so, the electronic return originator (ERO) will receive notification from the Service that the return was not accepted for processing. The ERO is required to inform the filer of the reject within 24 hours, provide the filer with an explanation of why the return was not accepted through the electronic system, and inform him/her a paper return must be filed.

  2. A paper return received after the return due date will be considered timely filed if the filer indicates on the return or an attachment that an unsuccessful attempt was made to file timely electronically and received date is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of being notified of rejection.

  3. Notice 2012-4 was issued providing an extension to organizations attempting to file their exempt organization return electronically from January 1, 2012 through March 1. 2012. If an organization is assessed a penalty and requests reasonable cause stating they were unable to file electronically and filed their return by March 30. 2012, abate the penalty if the return due date or extended due date fell between January 1, 2012 through March 1, 2012. Reason code 045 should be used. Send a 168C letter to the filer. A signature is not required on the request; however the penalty should only be removed upon request from the organization or a representative.

21.7.7.4  (01-01-2014)
Exempt Organization Procedures

  1. Refer to the following procedures for resolving exempt organization account related inquiries, claims, amended returns or correspondence issues.

21.7.7.4.1  (01-01-2014)
Form 990, Return of Organization Exempt From Income Tax and
Form 990-EZ, Short Form Return of Organization Exempt From Income Tax
(TY 2007 & Prior)

  1. Form 990 and Form 990-EZ are used by tax-exempt organizations, nonexempt charitable trusts, and IRC 527 political organizations to provide the IRS with the information required by IRC 6033.

  2. The MFT for Form 990 and Form 990-EZ is 67, tax class "4" and the return is due the 15th day of the 5th month after the tax year end. Form 990 Doc Code is 90 and Form 990-EZ Doc Code is 09.

  3. All Forms 990 and Forms 990-EZ, are imaged or scanned.

  4. An organization's gross receipts are considered normally to be less than $50,000, and the organization is not required to file Form 990 or Form 990-EZ if:

    • The organization is up to a year old and has received $75,000 or less in donations or pledges during its first tax year.

    • The organization is between 1 and 3 years old and has received $60,000 or less in average gross receipts during each of the first 2 tax years.

    • The organization is 3 or more years old and has received $50,000 or less in average gross receipts during each of the immediately preceding 3 tax years (including the year for which the return would be filed). Form 990, Schedule A can be used to determine the gross receipts for the first and second years.

  5. Unless excepted (see table in IRM 21.7.7.3.9.1.1.4(5) ), a tax-exempt political organization must file an exempt organization annual information return if it has gross receipts of $25,000 or more for the taxable year ($100,000 for QSLPOs). A tax-exempt political organization with gross receipts of less than $100,000 and assets of less than $250,000 at the end of the year may file a Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. Otherwise, it files a Form 990, Return of Organization Exempt from Income Tax.

21.7.7.4.1.1  (01-01-2014)
Form 990 and Form 990-EZ Revision
(TY 2008 & Subsequent)

  1. Form 990 was redesigned for TY 2008. Since some organizations may continue to use previous version of Form 990 and Form 990-EZ, new Doc Codes were established for the redesigned forms. The Doc Code for Form 990 (2008) is "93 " and Form 990-EZ (2008) Doc Code is "92" .

  2. The Form 990-EZ was modified to allow the use of new Schedules A, B, C, E, G, L, N and O of the 2008 Form 990. These schedules are used to report information currently required by the Form 990-EZ. In addition, certain information no longer required to be reported on the 2008 Form 990 as a result of its redesign has also been eliminated from the Form 990-EZ.

  3. The new schedules include the following:

    New Schedules Purpose Applicable Form
    Schedule A, Public Charity Status and Public Support Schedule A is used by an organization that files Form 990 or Form 990-EZ to provide the required information regarding public charity status and public support. Form 990 or
    Form 990-EZ
    Schedule B, Schedule of Contributors Schedule B is used to provide information on contributions the organization reported on –
    • Form 990-PF, Return of Private Foundation, line 1,

    • Form 990, Return of Organization Exempt From Income Tax, Part VIII, line 1, or

    • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, line 1.

    Form 990,
    Form 990-EZ or
    Form 990-PF
    Schedule C, Political Campaign and Lobbying Activities Schedule C is used by section 501(c) organizations and section 527 organizations to furnish additional information on political campaign or lobbying activities. Form 990 or
    Form 990-EZ
    Schedule D, Supplemental Financial Statements Schedule D is used by an organization that files Form 990 to provide the required reporting for donor advised funds, conservation easements, certain art and museum collections, escrow accounts and custodial arrangements, endowment funds, and supplemental financial information. Form 990
    Schedule E, Schools Schedule E is used by an organization that files Form 990 or 990-EZ to report information on private schools. Form 990 or
    Form 990-EZ
    Schedule F, Statement of Activities Outside the United States Schedule F is used by an organization that files Form 990 to provide information on its activities conducted outside the United States by the organization at any time during the tax year. Form 990
    Schedule G, Supplemental Information Regarding Fundraising or gaming Activities Schedule G is used by an organization that files Form 990 or Form 990-EZ to report professional fundraising services, fundraising events, and gaming. Form 990 or
    Form 990-EZ
    Schedule H, Hospitals Schedule H must be completed by an organization that operates at least one facility that is, or is required to be, licensed, registered, or similarly recognized by a state as a hospital. Form 990
    Schedule I, Grants and Other Assistance to Organizations, governments and Individuals in the U.S. Schedule I is used by an organization that files Form 990 to provide information on grants or other assistance made by the filing organization during the tax year to organizations, governments, and individuals in the United States. Report activities conducted by the organization directly or indirectly through a disregarded entity, or through a joint venture taxed as a partnership. Form 990
    Schedule J, Compensation Information Schedule J is used by an organization that files Form 990 to report compensation information for certain officers, directors, individual trustees, key employees and highest compensated employees, and to provide certain information about the organization's compensation practices. Form 990
    Schedule K, Supplemental Information on Tax Exempt Bonds Schedule K is used by an organization that files Form 990 to provide certain information on their outstanding liabilities associated with tax exempt bond issues. Form 990
    Schedule L, Transactions with Interested Persons Schedule L is used by an organization that files Form 990 or Form 990-EZ to provide information on certain financial transactions or arrangements between the organization and disqualified persons under section 4958 or other interested persons. Schedule L is also used to determine whether a member of the organization’s governing body is an independent member for purposes of Form 990, Part VI, line 1b. Form 990 or
    Form 990-EZ
    Schedule M, Non-Cash Contributions Schedule M is used by an organization that files Form 990 to report the types of non-cash contributions received during the year by the organization and provide reporting of certain information regarding such contributions. Form 990
    Schedule N, Liquidation, Termination, Dissolution or Significant Disposition of Assets Schedule N is used by an organization that files Form 990 or Form 990-EZ to provide information relating to going out of existence or disposing of more than 25 percent of its net assets through a contraction, sale, exchange, or other disposition. Form 990 or
    Form 990-EZ
    Schedule O, Supplemental Information to Form 990 Schedule O is used by an organization that files Form 990 to provide the IRS with narrative information required for responses to specific questions on Form 990, or to explain the organization’s operations or responses to various questions. It allows organizations to supplement information reported on Form 990. Form 990 of Form 990-EZ
    Schedule R, Related Organizations and Unrelated Partnerships Schedule R is used by an organization that files Form 990 to provide information on related organizations, on certain transactions with related organizations, and on certain unrelated partnerships through which the organization conducts significant activities. Form 990

  4. New Incomplete Return Item (IRI) Codes have also been added. For additional information, refer to IRM 21.7.7.4.23.1.3.1.

21.7.7.4.1.1.1  (01-01-2014)
Form 990-EZ Changes

  1. Unlike Form 990, which has been extensively redesigned for 2008, the 2008 Form 990-EZ has limited changes. The dollar thresholds for Form 990-EZ filers have been raised to allow many more organizations to file Form 990-EZ. Several new lines have been added, owing largely to a revision of Schedule A. Several unstructured attachments were replaced by Schedules or eliminated. Some instructions have been changed in coordination with new Form 990 instructions.

  2. For 2008, many parts of the 2007 Schedule A were moved to new Schedules or to the Form 990 core form, which required that corresponding changes be made to Form 990-EZ. For 2008, Part VI of Form 990-EZ was added to maintain reporting of information previously required of organizations that filed a Form 990-EZ and completed Schedule A.

    • Line 47 – for determining which 501(c)(3) organizations are required to complete Schedule C Part II regarding lobbying activities (2007 Schedule A, Part VI-A and VI-B)

    • Line 48 – for determining which 501(c)(3) schools are required to complete Schedule E regarding private schools (2007 Schedule A, Part V)

    • Lines 49a and 49b – added to identify transactions between 501(c)(3) organizations and tax-exempt organizations other than 501(c)(3) organizations (current Schedule A, Part VII)

    • Line 50 – added to report compensation of the five highest compensated employees other than officers, directors, trustees, and key employees (current Schedule A, Part I); threshold raised from $50,000 to $100,000

    • Line 51 – added to report compensation of five highest compensated independent contractors (2007 Schedule A, Parts II-A and II-B); threshold raised from $50,000 to $100,000

  3. Certain unstructured attachments required in the 2007 Form 990-EZ were replaced with schedules or eliminated.

    • Part I Revenue, Expenses, and Changes in Net Assets or Fund Balances
      — Line 5c – eliminated the attached schedule for sales of non-inventory assets
      — Line 6a – replaced attached schedule with Parts II and III of Schedule G when gross revenue from special events and gaming activities exceeds $15,000

    • Part V Other Information
      — Line 36 – replaced attached schedule with Schedule N
      — Line 38a – replaced attached schedule with Schedule L, Part II
      — Line 40b – replaced attached schedule with Schedule L, Part I

21.7.7.4.1.1.2  (01-01-2014)
Form 990-EZ Filing Tests for Tax Years
2008, 2009, and 2010

  1. With the redesign of these returns, the gross receipts and total assets amounts were raised. In order to provide organizations time to transition to the new form, the redesigned 2008 Form 990 will be phased-in over three years for smaller organizations. This will be accomplished through increases in the filing thresholds for the Form 990-EZ. For tax years 2008 and later, an organization may file a Form 990-EZ (rather than a Form 990) if it satisfies both the gross receipts and total assets tests set forth in the table below.

    May file Form 990–EZ for If gross receipts are And total assets are
    2008 tax year (filed in 2009) < $1 million < $2.5 million
    2009 tax year (filed in 2010) < $500,000 < $1.25 million
    2010 and later tax years < $200,000 < $500,000

21.7.7.4.1.2  (01-01-2014)
Form 990 with a Group Exemption Number (GEN)

  1. Some organizations that file Form 990 receive a group ruling. This type of ruling is identified by a Group Exemption Number (GEN). The central organization of the group ruling is identified by an Affiliation Code (AC) "6" or "8" on CC ENMOD.

  2. A group return entity has its own EIN, which is a dummy entity used to file the group return. The group return entity is identified by a Form 990 filing requirement of "3" and words "Group Return " added to the organization's name.

  3. The central organization of the group receives the ruling and members or subordinates of the group are added as the central organization determines their eligibility. Normally subordinate entities and the central organization have the same name, identified by the presence of a chapter name or local number. The subordinate is identified by an Affiliation Code of "7" or "9" on CC ENMOD.

21.7.7.4.1.3  (01-01-2014)
Central Organization

  1. An organization that has one or more subordinates under its general supervision or control is referred to as a central organization.

  2. The central organization has a separate EIN and is identified by an Affiliation Code "6" (central organization of a group ruling - not a church) or "8" (central organization of a church).

  3. A central organization files one Form 990 for itself based on the income and expenses of only the central organization. It may also file a group return that includes all of the income and expenses for its affiliates who elect to be included on a group return.

21.7.7.4.1.4  (01-01-2014)
Subordinate (Affiliate) Organization

  1. A chapter, local, post, or unit of a central organization is referred to as a subordinate organization.

  2. A subordinate is identified by an Affiliation Code "7" (intermediate parent - subordinate by state) or "9" (subordinate of a group ruling or group return).

  3. A subordinate may choose to file as part of a group return or may file a separate return.

  4. Every year, each subordinate must authorize the central organization in writing to include it in the group return. The group return is filed under the group return's EIN. Any subordinate not filing as part of the group must file a separate return using its own EIN. A group code 8 (entered on the edit sheet) means that only some of the affiliates are included in the group return. A group code 7 means that all of the affiliates are included.

  5. A TC 590 CC14 is input on each of the affiliate's EIN that is included on the group return to prevent a delinquency notice from being issued.

21.7.7.4.1.5  (01-01-2014)
Gross Receipt Calculation

  1. The organization's gross receipts are the total amounts it received from all sources during its annual accounting period, without subtracting any costs or expenses.

  2. For TY 2007 and prior, gross receipts are figure as outlined below.

    • Form 990, Part I — Gross receipts are the total of lines 1e, 2, 3, 4, 5, 6a, 7, 8a (both columns) 9a, 10a, and 11.

    • Form 990-EZ, Part I — Gross receipts are the total of lines 1, 2, 3, 4, 5a, 6a, 7a, and 8.

  3. For TY 2008 , gross receipts are figured as outlined below.

    • Form 990, Part VIII, Column A — Gross receipts are the total of lines 6b (both columns), 7b (both columns), 8b, 9b, 10b, and 12.

    • Form 990-EZ, Part I — Gross receipts are the total of lines 5b, 6b, 7b, and 9.

  4. For TY 2009 , gross receipts are figured as outlined below.

    • Form 990, Part VIII, Column A - Gross receipts are the total of lines 6b (both columns, 7b (both columns), 8b, 9b, 10b and 12.

    • Form 990-EZ, Part I, - Gross receipts are the total of lines 5b, 6b, 7b and 9.

  5. For TY 2010 ad subsequent, gross receipts are figured as outline below

    • Form 990, Part VIII, Column A - Gross receipts are the total of lines 6b (both columns, 7b (both columns), 8b, 9b, 10b and 12.

    • Form 990-EZ, Part I, lines 5b, 6c, 7b and 9.

21.7.7.4.1.6  (01-01-2014)
U.S. Virgin Islands Exempt Organization Penalty Abatement and Form 990 Processing Procedures

  1. Virgin Islands exempt organizations are required to file a timely Form 990 with the Bureau of Internal Revenue (BIR) in the Virgin Islands and the U.S. Internal Revenue Service. In the past, some organizations have sent copies of their return to the Ogden Submission Processing Campus for information purposes only. If the Form 990 was received after the return due date, the organization was assessed a Daily Delinquency Penalty for late filing and a balance due notice was generated to the organization.

  2. In response to the notice, the OAMC EO Accounts units receive correspondence from the organizations requesting abatement of the penalty. Their request is based on the fact that the organization filed their return timely with the VIBIR and, therefore, are not required to file a return with the United States IRS.

  3. A Memorandum of Understanding (MOU) was implemented between the VIBIR and IRS establishing procedures regarding the processing of applications for recognition of exemption from Federal income tax under IRC 501. It also provides guidance regarding the filing of returns by tax-exempt organizations chartered in the US Virgin Islands (USVI). Under this agreement, organizations will have a choice:

    • If an organization wants actual exemption recognition by the IRS, it can either file its exemption application directly with the IRS or with the BIR. For applications filed directly with the IRS, all written correspondence will be sent to the organization. If exempted, a copy of the exemption determination will be sent to the BIR for information. When applications are filed with the BIR, the BIR will forward the exemption application to the IRS for processing as a request for recognition by the IRS together with the Form 8821, Tax Information Authorization, completed by the organization authorizing the BIR to receive tax return information related to the exemption application. The appropriate user fee will accompany the exemption application. If exempted, the organization is responsible for filing the Form 990 with the OSPC and for following all other tax laws applicable to organizations that have been recognized as exempt under IRC 501 of the Internal Revenue Code. For applications filed by the BIR with the IRS, the IRS will contact both the organization and the BIR. In addition, all written correspondence will be sent to both the organization and the BIR.

    • For any organization that only needs BIR exemption, not IRS exemption, the BIR will forward the appropriate exemption application to the IRS for processing as a request for an information letter about whether the organization is described under a particular tax-exemption section of the IRC. IRS will correspond with the BIR if additional information is needed. If the organization is described as a tax-exempt organization, it will not receive an exemption determination or be listed as an exempt organization in any IRS publication or record, nor will it have any IRS filing requirements. An information letter will be issued to the BIR, not the organization, that the organization is described in the applicable Code section.

  4. Prior to abatement of the delinquency penalty, EO Accounts must adhere to the following procedures:

    1. Research command code BMFOLO and ENMOD to determine the current exempt status of the organization. If the account is in Status 97 refer to IRM 21.7.7.4.24(11).

    2. If the current status is favorable and the organization states in response to the penalty notice that it is chartered in the USVI and files its 990 returns with the BIR, request the organization to provide certification from the BIR of the organization's Form 990 filings. The certification provides a record of the filing history and should include the tax year, type of form filed and date it was filed. The certification must be stamped and signed by a representative of the VIBIR. In addition, the organization is required to submit copies of the Forms 990 filed for the three (3) most recent tax years.

    3. Suspend the case for 45 days pending reply from the organization. Contact may be done by either telephone or in writing.

    4. If the organization provides the certification and copies of the prior year returns, process the returns as normal. Edit the returns in red and restrict penalty assessment on the prior years by using computer condition codes " R " and " V " .

    5. Abate the DDP on the current account.

      Note:

      If statute periods are involved, follow statute guidelines.

    6. If the organization does not submit the information, correspond with the organization and explain that the penalty will not be adjusted at this time because the information requested was not provided.

    7. Give a current balance due and release the STAUP.

    8. If the BMFOLO research in step a) above shows that the organization does not have favorable exempt status, contact the Cincinnati TE/GE office at 1-513-263-3758. They will secure a copy of the record and forward it to a determination specialist for review. The specialist will research the account and determine if the exemption is still valid. If the organization is determined to be exempt, the specialist will update the EO section of the account to reflect a good status and notify the EO Accounts tax examiner.

    9. The EO Accounts tax examiner will proceed as described in steps b) & c) above.

    10. If a record is not available, Cincinnati TE/GE will contact the EO Accounts tax examiner by phone.

    11. The EO Accounts tax examiner will then refer the case to the Field.

  5. If it's determined that the organization meets any of the criteria below, forward the case to the Field for review.

    • Does not qualify for tax exempt status.

    • Exempt, but fails to provide the certification or file the prior year returns with the US IRS.

    • Uncooperative in any way in resolving the delinquency penalty issue.

  6. The above procedures are applicable to all forms required to be filed by the organization.

21.7.7.4.1.7  (01-01-2014)
American Samoa

  1. A foreign organization that has U.S. exemption is required to file an annual information return, unless there is a treaty, MOU or a Revenue Procedure (e.g., Rev. Proc. 94-17 or Rev. Proc. 2003-21) that applies. Since there is no such treaty with the American Samoa, the case must be referred to the Field for resolution.

21.7.7.4.2  (01-01-2014)
Form 990-PF, Return of Private Foundation or
IRC 4947(a)(1) Nonexempt Charitable Trust Treated as A Private Foundation

  1. Form 990-PF is an annual information return that must be filed by:

    • Exempt private foundations (IRC 6033(a) and(c))

    • Taxable private foundations (IRC 6033(d))

    • Organizations that agree to private foundation status and whose application for exempt status are pending on the due date for filing Form 990-PF

    • Organizations that made an election under IRC 41(e)(6)

    • Organizations that are making an IRC 507 termination prior to the end of the 60 month termination period

    • IRC 4947(a)(1) nonexempt charitable trusts that are treated as private foundations (IRC 6033(d) )

  2. The MFT is 44 and the tax class is "4" . The return is due the 15th day of the 5th month after the tax year end. Form 990-PF filers should have a SS 03 with Foundation Code (FC) 02 - 04, or Status Code (SC) 92.

  3. Form 990-PF is used to:

    • Figure the tax based on investment income;

    • Report charitable distributions and activities;

    • Serve as a substitute for the IRC 4947(a)(1) nonexempt charitable trust's income tax return, Form 1041, U.S. Income Tax Return for Estates and Trusts, when the trust has no taxable income.

  4. Private foundations are required to file Form 990-PF regardless of their amount of gross receipts.

  5. A private foundation that has disposed of all of its assets and does not terminate its private foundation status must file a Form 990-PF for the taxable year of the disposition. They must comply with any expenditure responsibility reporting obligations on such return, but do not have to file returns in the following taxable years if it has no assets and does not engage in any activities. If, in later taxable years, it receives additional assets or resumes activities, it must resume filing a Form 990-PF for those taxable years in which it has assets or activities. See Rev. Rul. 2002-28.

  6. All Forms 990-PF are imaged or scanned prior to initial processing of the return.


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