The EO Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them, from Exempt Organizations (Tax-Exempt and Government Entities Division) at the IRS.
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December 16, 2019
The Taxpayer First Act, enacted July 1, 2019, requires tax-exempt organizations to electronically file information returns and related forms. The new law affects tax-exempt organizations in tax years beginning after July 1, 2019.
The following IRS forms are included in the mandate:
- Form 990, Return of Organization Exempt from Income Tax.
- Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation.
- Form 8872, Political Organization Report of Contributions and Expenditures.
- Form 1065, U.S. Return of Partnership Income (if filed by a Section 501(d) apostolic organization).
Those who previously filed paper forms will receive a letter from the IRS informing them of the change. Filing deadlines vary by form type. The IRS will postpone the required e-filing of Form 990-EZ for one year, while optional e-filing continues to be available. Although Forms 990-T and 4720 will come under the e-filing requirement next year, the IRS will continue to accept these forms on paper pending conversion to electronic format.
The IRS will no longer accept paper Forms 8872 reporting on periods after 2019. Forms 8872 reporting information for periods starting on or after Jan. 2020, will be due electronically by Section 527 organizations. These include political parties, political action committees and campaign committees of candidates for federal, state or local office.
Among other requirements, most tax-exempt political organizations have a requirement to file semiannual, quarterly or monthly reports on Form 8872. To file electronically, the organization must have the username and password it received from the IRS after electronically filing its initial notice (Form 8871). Organizations can file electronically using the IRS website at IRS.gov/polorgs. To replace a username or password, please contact:
Attn: Request for 8872 Password
Mail Stop 6273,
Ogden, UT 84201 Fax (855) 214-7520
Form 990 & 990-PF E-filing
Under the legislation, most e-filings won’t be due before Dec. 15, 2020, from charities and other exempt organizations that generally file Form 990 or 990-PF by the 15th day of the 5th month after the tax year-end. In other words, Forms 990 and 990-PF with tax years ending July 31, 2020, and later MUST be filed electronically. Forms 990 and 990-PF filings for tax years ended on or before June 30, 2020, may still be on paper. In the case of a short tax year or certain other circumstances detailed in the 990 or 990-PF Instructions, the IRS will continue to accept paper filing as its systems are yet unable to receive these forms electronically. More information on software providers is available at https://www.irs.gov/e-file-providers/exempt-organizations-mef-providers.
Form 990-EZ Transition Relief
For small exempt organizations, the legislation specifically allowed a postponement (“transitional relief”). For tax years ending before July 31, 2021, the IRS will accept either paper or electronic filing of Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. For tax years ending July 31, 2021, and later, Forms 990-EZ must be filed electronically. Generally, Form 990-EZ is for organizations with annual gross receipts less than $200,000 and total assets at tax year-end less than $500,000.
Paper Forms 990-T & 4720
In 2020, the IRS will continue to accept paper forms. These include Form 990-T, Exempt Organization Business Income Tax Return, and Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. The IRS plans to have these returns ready for e-filing in 2021 (reporting on tax year 2020).
Pre-existing E-file Rules
In effect, the legislation supersedes the pre-existing e-file regulation for large exempt organizations. Until tax years beginning after July 1, 2019, exempt organizations with total assets of $10 million or more at tax year-end that had filed 250 or more returns of any type during the calendar year were required to e-file Forms 990 and 990-PF. E-filing was also required of Form 8872 filers that had or expected more than $50,000 of contributions or expenditures in the calendar year. These prior rules will continue to apply to some e-filings made in 2020.
Form 1065 E-filing
For most Section 501(d) apostolic organizations which use Form 1065, the e-filing legislation won’t apply to returns due before Oct. 15, 2020. Generally, the Form 1065 deadline is the 15th day of the 3rd month after the tax year-end. Appropriate software is offered by the providers listed on the IRS 1065 MeF Providers web-site.
Taxpayer First Act
The Taxpayer First Act aims to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer friendly agency. The legislation requires the agency to develop a comprehensive customer service strategy, modernize its technology and enhance its cyber security. More information on the Taxpayer First Act is available at IRS.gov.
December 2, 2019
New Mailing Address for Exempt Organization Submissions
Effective immediately, please use the mailing addresses below for Forms 1023, 1024, 1024-A and 1028.
Regular U.S. Postal Service mail:
Internal Revenue Service
P.O. Box 12192
TE/GE Stop 31A Team 105
Covington, KY 41012-0192
Deliveries by private delivery service:
Internal Revenue Service
7940 Kentucky Drive
TE/GE Stop 31A Team 105
Florence, KY 41042
If you’ve had your submission returned to you undeliverable, please resubmit using one of the above addresses.
Check out EO submissions for more information on the forms affected by the address change.
November 21, 2019
IRS increases enforcement action on Syndicated Conservation Easements
The IRS announced a joint effort by TE/GE, SB/SE and LB&I to significantly increase enforcement actions for syndicated conservation easement transactions, a priority compliance area for the agency.
Charities and Taxable Unrelated Business Income
Your charitable organization may generate taxable income even though it is tax exempt. The Unrelated Business Income course explains your taxable income and how to report it. Charity officers and board members should review the Virtual Small to Mid-Sized Tax-Exempt Workshop.
New resources for Charities and Nonprofits
- Updated TE/GE FY 2020 Program Letter (PDF)
- Two new EO snapshots:
- Tax Cuts & Jobs Act (TCJA) Training Materials
- New video: How to complete Form W-9
All Current PTINs Expire December 31, 2019
The IRS is urging tax professionals to renew their Preparer Tax identification Numbers now to avoid a last-minute rush.
Application Period for Enrolled Agents
The 2020 Enrollment Renewal Application Period for EAs is open from now through January 31, 2020. Check if your current enrollment is set to expire on March 31, 2020.
October 21, 2019
The IRS as part of an international coalition will participate in the second annual International Charity Fraud Awareness Week (ICFAW) Oct. 21-25 to raise awareness and share best practices to detect, avoid and respond to fraud and financial crime. The IRS combats fraud by:
- Publishing the yearly "Dirty Dozen" list of tax scams, which includes fake charities masquerading as charitable organizations and soliciting donations from unsuspecting contributors.
- Training agents to work cases with potential fraud, both in Exempt Organizations and in the IRS Criminal Investigation division.
- Utilizing the IRS Lead Development Center to combat tax abuse by investigating abusive promoters and unscrupulous tax professionals.
- Accepting complaints about charities or other tax-exempt organizations whose activities or operations may be abusive or inconsistent with their tax-exempt status.
October 4, 2019
Proposed regulations on reporting requirements; Penalty relief for reliance on Rev. Proc. 2018-38
Additionally, Notice 2019-47 (PDF) provides penalty relief related to taxpayer reliance on Revenue Procedure 2018-38 set aside by the United States District Court for the District of Montana on July 30.
The IRS will issue a CP2100 or CP2100A Notice if the payee's name and Taxpayer Identification Number (TIN) on an information return doesn't match IRS records. Such mismatches trigger backup withholding responsibilities. Publication 1281, Backup Withholding on Missing and Incorrect Name/TIN(s) (PDF), contains all the information payers need to comply.
Review these IRS videos
- W-9 Saves Time and Money
Learn Form W-9 basics.
- TIN Matching Program
Learn how to avoid costly penalties and expenses from filing invalid Forms 1099.
- What You Need to Know About Backup Withholding
BUW refers to the tax withheld from a payment to a service vendor reportable on Form 1099-MISC.
Revenue Procedure 2019-39
This revenue procedure (PDF) extends the time periods for 403(b) plan sponsors to correct form defects that could disqualify their plan.
September 27, 2019
New private delivery/express mail address for Exempt Organizations submissions (Forms 1023, 1024, 1024A, 1028, 8940 and group exemption requests)
Use the following address for private delivery or express mail for the forms shown above:
Internal Revenue Service
Mail Stop 31A: Team 105
7940 Kentucky Drive
Florence, KY 41042
The P.O. Box address for regular mail remains the same:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192
If you recently submitted an item to another address, it will be forwarded. You do not have to resubmit.
Help for Victims of Hurricane Dorian
IRS is providing tax relief to those affected by Hurricane Dorian. Visit the Hurricane Dorian page for the latest updates, videos and resources for clients who are victims of Hurricane Dorian.
The IRS offers online training for charitable organizations that assist with disaster relief. Disaster Relief – Parts I and II discuss how charities may provide disaster relief, tax law, deductibility of contributions and tax treatment of relief recipients. Organizational leadership and volunteers should attend the Tax-Exempt Organization Workshop for important information on the benefits, limitations and expectations of tax-exempt organizations.
August 19, 2019
Redesigned Charities and Nonprofits landing and associated webpages launched
Various Charities and Nonprofits webpages have been redesigned to improve organization, design and navigation using data analytics and user testing.
Charitable hospitals under the Affordable Care Act – Section 501(r)
The IRS updated webpages detailing four additional requirements under Internal Revenue Code Section 501(r) that must be met by charitable hospitals tax-exempt under Section 501(c)(3). Watch this Overview of Requirements for Charitable Hospitals under Section 501(r) presentation.
TE/GE Issue Snapshots provide guidance to IRS employees working hospital cases:
- Hospital Definition: Sections 509(a)(1) and 170(b)(1)(A)(iii) versus 501(r)
- Financial Assistance Policy
- Section 4959 Excise Tax and Noncompliant Facilities Income Tax
New IRS Tax Withholding Estimator
Tell your employees about the new IRS Tax Withholding Estimator. The new taxpayer-friendly tool on IRS.gov helps workers tailor the amount of income tax their employer should withhold from their paychecks and avoid unexpected results at tax time. The Estimator allows filers to target a tax due amount close to zero or a refund around $500.
A Charity's Treatment of Volunteers Can Affect Tax Responsibilities
If your organization has employees or volunteers, it may have tax responsibilities. The Employment Issues course explains how charities classify employees, how to report employee wages, the rules regarding gifts to volunteers and filing requirements. Organizational leadership and volunteers should attend the Tax-Exempt Organization Workshop for important information on the benefits, limitations and expectations of tax-exempt organizations.
Beware of fake charities
IRS cautions taxpayers on scams involving disasters, charitable causes and encourages taxpayers to donate to recognized charities to help disaster victims. IRS' annual "Dirty Dozen" also lists a variety of common scams taxpayers may encounter.
Understanding Disaster Relief Tax Law and Contribution Deductibility
The IRS offers two courses – Disaster Relief – Parts 1 and II – for charitable organizations providing disaster relief. Topics include how charities may provide disaster relief, deductibility of contributions and tax treatment of relief recipients. Organization leadership and volunteers should review the Tax-Exempt Organization Workshop that includes important information on the benefits, limitations and expectations of tax-exempt organizations.
Revisions made to IRS Online Registration System for 501(c)(4) Certification
Organizations required to submit Form 8976, Notice of Intent to Operate Under Section 501(c)(4), will notice a new look and improved navigation at the Online Registration System for 501(c)(4) Certification webpage.
This revenue procedure modifies Revenue Procedure 75-50 (PDF) to allow a third method for private schools to satisfy the requirement contained in Section 4.03 of the revenue procedure by using its primary publicly accessible Internet homepage to publicize the school's racially nondiscriminatory policy.
The IRS reminds tax professionals to sign up for this summer's 2019 IRS Nationwide Tax Forums. Tax professionals attending can earn up to 19 continuing education credits.
June 5, 2019
Form 990-T Fiscal Year 2017 Corporate Filers Apply Blended Rate to Unrelated Business Taxable Income (UBTI) for Entire Taxable Year
The IRS reminds Form 990-T Corporate Filers of new tax law provisions that could affect the tax rate applicable to their UBTI. Specifically, fiscal 2017 corporate filers should apply a blended rate to their UBTI for the entire 2017 taxable year, including any UBTI from amounts paid or incurred after December 31, 2017 that increase UBTI under new Section 512(a)(7).
The Tax Cuts and Jobs Act (TCJA) introduced a flat 21 percent corporate tax rate for tax years beginning after December 31, 2017. However, corporations with fiscal tax years beginning in 2017 and ending in 2018 calculate their tax by blending the rates in effect before 2018 with the rate in effect after 2017. An exempt organization that's a corporation with a 2017 fiscal year calculates its tax liability by applying the pre-2018 rate and the post-2017 rate to the corporation's taxable income for the entire tax year. It prorates those amounts based on the number of days in each period relative to the total days in the tax year. The sum of those results yields a blended rate. The blended rate may be greater or less than the corporate tax rate of 21 percent.
The TCJA also added Internal Revenue Code Section 512(a)(7), which increases an exempt organization's UBTI by any amount paid or incurred after December 31, 2017, for any qualified transportation fringe, any parking facility used in connection with qualified parking, or any on-premises athletic facility for which a deduction is not allowable because of Section 274. Organizations with a fiscal tax year beginning in 2017 should enter any such increase in UBTI on line 12 of the 2017 Form 990-T.
In the example below, a corporation – not a controlled group member – filing a Form 990-T for its tax year beginning July 1, 2017, and ending June 30, 2018, is reporting UBTI of $2,000 on line 34 made up in part of UBTI from a disallowed qualified transportation fringe amount reported on line 12. The corporation calculates income tax on line 35c of 2017 Form 990-T as follows:
|1. UBTI from Page 1, Part II, line 34||$2,000|
|2. Tax on line 1 amount using pre-2018 tax rate schedule from Page 19 of 2017 Instructions for Form 990‑T (15%)||$300|
|3. Tax on line 1 amount using the 21% rate||$420|
|4. Multiply line 2 by the number of days in the corporation's tax year before Jan. 1, 2018 (184)||$55,200|
|5. Multiply line 3 by the number of days in the corporation's tax year after Dec. 31, 2017 (181)||$76,020|
|6. Divide line 4 by the total number of days in the corporation's tax year (365)||
|7. Divide line 5 by the total number of days in the corporation's tax year (365)||$208|
|8. Add lines 6 and 7. This is the corporation's total tax for the 2017 fiscal tax year (blended rate of 18%).||$359|
- Notice 2018-38 (PDF)
- 2017 Instructions for Form 990-T (PDF)
- Notice 2018-67 (PDF)
- Notice 2018-99 (PDF)
- Notice 2018‑100 (PDF)
- 2018 Instructions for Form 990-T (PDF)
May 7, 2019
Clarification to EO Update issued May 6, 2019
"Issue 1" in yesterday's EO Update stated that organizations should report their correct organization type. The IRS wishes to clarify that the intent of this tip was to remind filers to accurately and fully complete information about their public charity status on Schedule A. As indicated in the instructions to Schedule A, the public charity status an organization indicates on Schedule A can be the same as stated in the organization's tax-exempt determination letter from the IRS ("exemption letter") or subsequent IRS determination letter, or it can be different. See Instructions for Schedule A (PDF) for more information.
May 6, 2019
Three Tips to Help You File a More Complete Form 990-Series Return
A tax-exempt organization using the calendar-year as its tax year must file a Form 990-series return by May 15, unless it has filed Form 8868, Application for Automatic Extension of Time To File an Exempt Organization Return (PDF), Application for Automatic Extension of Time To File an Exempt Organization Return (PDF).
The IRS suggests organizations consider these three tips to help ensure a complete return and reduce the chances we'll send your return back or need to request additional information:
Issue 1: Report your organization's correct organization type. Many organizations report the incorrect organization type in Part I of Schedule A (PDF), Public Charity Status and Public Support, which all 501(c)(3) organizations must file with Form 990 or 990-EZ.
Solution: Look at the letter we sent your organization recognizing you as exempt (your "determination" letter) to verify your correct organizational type.
Issue 2: Employment taxes. Many organizations forget to file required employment tax returns, such as Forms W-2, 940, 941 or 945.
Solution: Learn about employment tax filing requirements for exempt organizations. The Employment Issues Course explains how to report employee wages, payments to independent contractors and other reportable payments.
Issue 3: Missing attachments and schedules. Organizations often forget to attach the schedules that may be required of Form 990 or Form 990-EZ filers.
Solution: Carefully review Form 990 – Part IV, Checklist of Required Schedules, or Form 990-EZ – Part V, Other Information, and Part VI, Section 501(c)(3) Organizations Only, to ensure that your organization has completed and attached all required schedules.
The Form 990 Overview Course discusses which forms to file, when they are due, public disclosure of your return and tips to help prepare your Form 990-series return.
Electronic filing can help you file a complete return
Electronic filing provides you with fast acknowledgement that the IRS has received your return. It also reduces normal processing time, making compliance with reporting and disclosure requirements easier. To ensure you are ready to file electronically, check your Electronic Filing Identification Number (EFIN) to ensure it is active.
In August 2018, EFINs were deactivated (dropped) if the system showed no usage for two years. For some filers, the system erroneously deactivated the account if the only returns filed using the EFIN were Form 990 series returns. Log into your existing IRS e-file application to check your EFIN status. If the status is not listed as "Active," you will need to reapply for a new EFIN by choosing the "Reapply" link on the "Application Details" page. If you encounter any problems when reapplying, you may contact the e-help Desk on 1-866-255-0654.
April 12, 2019
Many tax-exempt organizations must file information returns by May 15
Form 990-series returns are due on the 15th day of the fifth month after an organization's tax year ends. In 2019, May 15 is the deadline to file for organizations using a calendar year tax year. If you need an extension of time to file, use Form 8868, Application for Automatic Extension of Time to File an Exempt Organization Return.
IRS is sending back incomplete and incorrect returns
The IRS sends back Form 990 series returns filed on paper – and rejects electronically filed returns – when they are incomplete or the wrong return. What happens if my Form 990 is missing information or a schedule, or is the wrong return?
Electronic filing is good for everyone
The IRS encourages exempt organizations to file electronically, noting the error rate for electronically-filed returns is only 1 percent. To avoid errors, file electronically using one of the IRS e-file business providers.
Online training for small and mid-size 501(c)(3) organizations
The IRS provides interactive online training to help your organization maintain its exemption at StayExempt.irs.gov. The Virtual Small to Mid-Size Tax Exempt Organization Workshop is a great resource for old and new charities.
IRS Nationwide Tax Forums offer more than continuing education
Educational seminars are just one benefit you get from attending the 2019 IRS Nationwide Tax Forums. Others include the Case Resolution Program, opportunities to talk with IRS subject matter experts, workshops and networking opportunities with your colleagues. Register at IRStaxforum.com.
TE/GE job announcements
The IRS/Department of Treasury has positions available across the country. These announcements are open on USAJOBS until January 2020. Apply today to become part of our team.
- Internal Revenue Agent (Exempt Organizations)
- Internal Revenue Agent (Employee Plans)
- Shared Support Associate (OA)
March 20, 2019
Group Ruling Holders will no longer receive lists of parent and subsidiary accounts from IRS
As of January 1, 2019, the IRS stopped mailing lists of parent and subsidiary accounts to central organizations (group ruling holders) for verification and return. Central organizations with accounting periods ending June 30, 2019, must submit updates by April 1, 2019. See Group Exemption Rulings and Group Returns for details.
March 14, 2019
Revenue Procedure 2019-5 updated
Revenue Procedure 2019-5 updates the Exempt Organization determination letters procedures. Changes include:
- Adding references to "new" Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code
- Clarifying that the IRS won't rule on a request under IRC Section 501(c)(6) for an organization whose purpose relates to a controlled substance that is illegal under federal law
- Increasing user fees for certain miscellaneous determinations from $1,000 to $2,000
- Changing the name of the Office of Associate Chief Counsel, Tax Exempt and Government Entities, to the Office of Associate Chief Counsel, Employee Benefits, Exempt Organizations and Employment Taxes
Recent IRS notices affecting Exempt Organizations
- Notice 2018-99 (PDF) Interim guidance for tax-exempt organizations to determine the increased unrelated business taxable income under IRC Section 512(a)(7) due to nondeductible parking expenses
- Notice 2018-100 (PDF) Gives relief from additions to tax for underpayment of estimated income tax for tax-exempt organizations that provide certain qualified transportation fringes
- Notice 2019-9 (PDF) Interim guidance on the provisions of the new IRC Section 4960 excise taxes on excess compensation paid by tax-exempt organizations to covered employees
View this page for updates and resources on how the Tax Cuts and Jobs Act (TCJA) affects tax-exempt organizations.
- 2018 Forms 990 and schedules updated for TCJA changes
- Updates to the "Where To File" addresses for Form 8822-B, Change of Address or Responsible Party – Business
The letter lists the TE/GE functions' accomplishments under our compliance program.
This letter (referred to as a work plan or priority letter in prior fiscal years) outlines TE/GE's commitment to improving customer experience and reducing taxpayer burden, while cultivating a strong work force.
Taxpayers and tax professionals will be asked to verify their identities if they call the IRS; having the right information can save you time.
TE/GE needs your help filling job openings across the country
Apply today to become part of our team and help us oversee a vital part of the nation's tax system. You can find more information for these positions and apply at USAJOBS.
- Tax Compliance Officer
- Multiple Locations
- Starting at $33,394 (GS 05-09)
- This job is open 03/05/2019 to 03/25/2019
As a tax compliance officer, you'll plan, coordinate and conduct independent correspondence examinations and related investigations of individual or business taxpayers. You'll also provide tax law and tax-related accounting assistance to taxpayers..
- Internal Revenue Agent (Exempt Organizations) Multiple Locations
- Starting at $33,394 (GS 05-11)
- This job is open 01/30/2019 to 01/29/2020
TE/GE has many revenue agent positions available across the country for Exempt Organizations. In this position, you'll use your professional knowledge and skill in accounting and auditing techniques to examine tax returns and determine the correct tax liability.
December 11, 2018
IRS issues guidance for determining nondeductible amount of parking fringe expenses and unrelated business taxable income; provides penalty relief to tax-exempt organizations
WASHINGTON – The Internal Revenue Service today issued interim guidance (PDF) regarding the treatment of qualified transportation fringe benefit expenses paid or incurred after Dec. 31, 2017.
The new rules assist taxpayers in determining the amount of parking expenses that are no longer tax deductible. They also help tax-exempt organizations determine how these nondeductible parking expenses create or increase unrelated business taxable income (UBTI).
The IRS acknowledges that this guidance falls late in the year and taxpayers that own or lease parking facilities may have already adopted reasonable methods in 2018 to determine the amount of their nondeductible parking expenses. Taxpayers may rely on the guidance or, until further guidance is issued, use any reasonable method for determining nondeductible parking expenses related to employer-provided parking.
A key part of this guidance is a special rule, enabling many employers to retroactively reduce the amount of their nondeductible parking expenses. Under this rule, employers will have until March 31, 2019, to change their parking arrangements to reduce or eliminate the number of parking spots they reserve for their employees. By making this change, many churches, schools, hospitals and other tax-exempt organizations may be able to reduce their associated UBTI.
In some cases, the organization may avoid having to file a Form 990-T, Exempt Organization Business Income Tax Return, altogether. Such a change made in parking arrangements will apply retroactively to Jan. 1, 2018.
The Treasury Department and IRS seek comments for future guidance to clarify the treatment of these qualified transportation fringe expenses.
The IRS also announced today that it will provide estimated tax penalty relief (PDF) in 2018 to tax-exempt organizations that offer these benefits and were not required to file a Form 990-T last filing season. Additionally, some tax-exempt organizations will not exceed the $1,000 threshold below which an organization is not required to file a Form 990-T or pay the unrelated business income tax.
November 16, 2018
Latest webcasts for charities and nonprofits
Four new presentations are available for 501(c)(3) organizations. Additional charities and nonprofits topics are on IRSvideos.gov.
- Charities and Nonprofits: A Quick Resource Guide
- Did you lose your tax-exempt status? Why it happens and how to fix it
- Easy Form 1023-EZ
- File Error-Free Forms 990
Recent IRS notices affecting Exempt Organizations
- Notice 2018-55 Tax reform imposes a 1.4 percent excise tax on the investment income of certain educational institutions.
- Notice 2018-67 An exempt organization with more than one unrelated trade or business must calculate unrelated business taxable income separately for each trade or business.
Issue Snapshots are IRS employee job aids that provide analysis and resources along with audit tips and issue indicators for technical tax issues. Visit Issue Snapshots for a complete listing of issue snapshots for Exempt Organizations.
- IRC Section 4941(d)(2)(E) - Taxes on Self-Dealing, Special Rules
- Understanding How Income Affects Qualification for Exemption as a IRC Section 501(c)(2) Corporation
- Section 507(b) Termination of Private Foundation Status, Special Rules
New procedures for employment tax issues under IRC 7436
This memorandum (PDF) contains new procedures and guidance for Exempt Organization examination employees conducting audits involving employment tax issues, and the proper forms and letters to use when processing a Substitute for Return.
October 26, 2018
November 15 deadline coming up for calendar-year tax-exempt organizations that requested six-month form extensions
If your organization filed Form 8868 (PDF) for a six-month extension to file its calendar year 2017 Forms 990, 990-EZ, 990-PF, or 990-BL,the extended deadline is November 15. Filers of non-calendar year returns may see initial and extended due dates here. View File Error-Free Forms 990 before filing.
The IRS extended certain filing deadlines for taxpayers, including exempt organizations, in certain counties in North Carolina, South Carolina, Virginia, Florida and Georgia. Organizations in affected counties that had an original or extended due date on or after September 7, 2018 and before January 31, 2019 (North Carolina, South Carolina and Virginia), October 7, 2018 (Florida), or October 9, 2018 (Georgia), now have until February 28, 2019 to file affected returns, including Form 990-series annual information returns and Form 990-T, Exempt Organization Business Income Tax Return.
New IRS YouTube video for Tax Exempt Organization Search
The video explains features of the new, mobile friendly Tax Exempt Organization Search launched earlier this year.
This report highlights TE/GE's 2018 accomplishments and explains the compliance programs in fiscal year 2019.
May 24, 2018
EP and EO participating in 2018 IRS Nationwide Tax Forums
Employee Plans and Exempt Organizations will participate in the 2018 IRS Nationwide Tax Forums in five cities starting in July. The forums offer three days of seminars and workshops featuring speakers from both the IRS and tax practitioner organizations. In addition to getting the latest tax information, tax professionals can earn continuing education credits for their attendance.
Thousands of people have lost millions of dollars and their personal information to tax scammers using regular mail, phone, or email.
The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Recognize the telltale signs of a scam. See: How to know it's really the IRS calling or knocking on your door
Updated forms and publications:
- Publication 3386, Tax Guide - Veterans Organizations (PDF)
- Publication 4220, Applying for 501(c)(3) Tax-Exempt Status (PDF)
- Publication 5428, IRS Form 990-N Electronic Filing System (e-Postcard) (PDF)
New Issue Snapshots:
- Financial Assistance Policies
- Comparing Hospital Definitions
- Exempt Organization Gaming and Unrelated Business Taxable Income
- Fraternal Organizations: What Constitutes a Lodge System?
- What determines how an agricultural organization qualifies for exemption?
May 8, 2018
New IRS online tool offers expanded access to information on tax-exempt organizations; newly-filed data available to public for first time
The IRS introduced a new online tool designed to provide faster, easier access to publicly available information about exempt organizations.
The new Tax Exempt Organization Search (TEOS) replaces EO Select Check, a more limited tool available since 2012 that focused primarily on providing information on an organization's tax-exempt status. Among the enhancements, the new TEOS tool includes images of newly-filed 990 forms and it's mobile friendly so you can access it using smartphones or tablets.
"This new tool provides taxpayers an easy way to get information about charitable organizations," said Acting IRS Commissioner David Kautter. "Tax-exempt organizations play a critical role in our nation, and this will provide greater insight for people considering donations."
Many tax-exempt organizations must file information returns by May 15; do not include Social Security numbers or personal data
The IRS reminds certain tax-exempt organizations using the calendar year as their tax year of the Tuesday, May 15 filing deadline for Form 990-series information returns. Organizations must not include Social Security numbers or personal data in their filings. Additional information is in the IRS Fact Sheet.
Recently, we added the following functionality to the Form 8976 Electronic Notice Registration System:
- The registration system now links to Pay.gov to prompt organizations to pay the required Form 8976 fee immediately.
- A non-payment notice will be generated if the required fee isn't paid within five days of submitting Form 8976. If not paid within 14 days, the registration will be rejected.
- The registration system won't allow uploads of subsequent documents for the same organization.
Use the link above to visit the Tax Information for Charities & Other Non-Profits page, then click on the "Learn More button." Your participation will help us improve our navigation menus and labeling.
If you have a specific question about exempt organizations, call EO Customer Account Services at 877-829-5500.
March 27, 2018
Join the IRS for a National Paycheck Checkup Thunderclap
We invite you or your group to join @IRSnews in support of the IRS Thunderclap effort promoting a national "Paycheck Checkup." Following major tax law changes, workers should review their withholding to make sure they have the right amount of tax taken out of their paychecks.
Form 990 processing changes
As of January 8, the IRS is returning Form 990 series returns filed on paper – and rejecting electronically filed returns – when they are incomplete or the wrong return. IRS.gov answers the question What happens if my Form 990 is missing information or a schedule, or is the wrong return?
Form 990-EZ reminders
Tax-exempt organizations with annual gross receipts under $200,000 and assets under $500,000 (at the end of the reporting period) can use Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, to meet their annual filing requirement. This means you'll submit less information and fewer schedules than the "full" Form 990, Return of Organization Exempt from Income Tax.
Form 990-EZ includes "assistive" features designed to make filing easier, quicker, and more accurate. These 29 "help buttons" don't replace the instructions, but they do alert the filer to traditionally troublesome areas and have decreased the error rate for paper-filed returns.
The IRS encourages exempt organizations to file electronically, noting the error rate for electronically-filed returns was only 1% for 2017. A list of companies providing this service is on IRS.gov.
Form 990-series returns are due on the 15th day of the fifth month after an organization's tax year ends. For organizations using the calendar year as their tax year, May 15 is the deadline to file for 2017. If you need an extension of time to file, use Form 8868, Application of Extension of Time to File an Exempt Organization Return.
Form 990 series returns filing deadline postponed until June 29 for victims of Hurricane Maria in Puerto Rico and the Virgin Islands
Form 990 Overview Course
Maintaining 501(c)(3) tax-exempt status is crucial to the success of a charitable organization and most need to submit an annual Form 990-series return. This Form 990 overview course shows you which forms to file and when they are due, and provides tips to help prepare your form.
Refunds Worth $1.1 Billion Waiting to be Claimed
Unclaimed federal income tax refunds totaling $1.1 billion may be waiting for 1 million taxpayers who did not file a 2014 federal income tax return. Time is running out. To collect these refunds, taxpayers must file their 2014 tax return by April 17, 2018.
Protect Yourself from Identity Theft
The IRS reminds you that every year, people fall prey to tax scams. We're highlighting three of the scams on the list of 2018 Dirty Dozen Tax Scams:
- Phone Scams: Con artists claiming to be IRS officials threaten police arrest, deportation, license revocation if the victim doesn't pay a bogus tax bill.
- Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. Criminals may pose as a person in your organization you trust or recognize requesting sensitive information.
- Identity Theft: Criminals sometimes file fraudulent returns using information from a phishing scam, with a refund being deposited into the taxpayer's bank account. They then use a phone scam to claim to be the IRS and ask for that money back.
March 19, 2018
Use Form 1024-A to Apply for Recognition of Exemption under IRC Section 501(c)(4)
Organizations that choose to apply for recognition of exempt status under Internal Revenue Code (IRC) Section 501(a) as an organization described in Section 501(c)(4) should use the new Form 1024-A, Application for Recognition of Exemption under Section 501(c)(4) of the Internal Revenue Code.
Organizations seeking recognition of exempt status under Section 501(a) as an organization described in Section 501(c)(2), (5), (6), (7), (8), (9), (10), (12), (13), (15), (17), (19) or (25) will continue to use Form 1024, Application for Recognition of Exemption Under Section 501(a).
Form 1024-A doesn't satisfy an organization's separate requirement to notify the IRS that it's operating under Section 501(c)(4). Instead, use Form 8976, Notice of Intent to Operate Under Section 501(c)(4).
Revenue Procedure 2018-5
Revenue Procedure 2018-5 simplifies the user fee structure for tax exemption applications.
Under Revenue Procedure 2018-15, the IRS doesn't require a new exemption application from a domestic Section 501(c) organization that changes its form or place of organization. Rev. Rul. 67-390 and Rev. Rul. 77-469 are obsoleted.
Processing Form 1023-EZ – 2018 updates
The IRS issued a memorandum updating procedures for processing Form 1023-EZ as set forth in Rev. Proc. 2018-5. Form 1023-EZ applicants should review the Instructions to Form 1023-EZ before completing and submitting their application as these processing changes coincide with the revisions to Form 1023-EZ.
EO Issue Snapshots
Issue Snapshots are IRS employee job aids that provide analysis, resources and audit tips (or issue indicators) on technical tax issues.
Recent Issue Snapshots:
- Entities Engaged in the Corporate Practice of Medicine
- Unrelated Business Income from Debt-Financed Property under IRC Section 51
March 6, 2018
File current versions of exemption applications
The IRS reminds people seeking tax-exempt status to use the current version of forms to avoid processing delays. The current version of Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (PDF), is dated December 2017, and Form 1024, Application for Recognition of Exemption Under Section 501(a) (PDF), is dated January 2018.
If you use a prior version of one of these forms, the IRS will return your application and ask you to resubmit using the current version of the form.
Revenue Procedure 2018-5 (PDF) announces the following user fees:
|Application Type||User Fee|
|Form 1024-A (PDF)|
|Group exemption letter||$2,000|
Please submit Form 8718 (PDF), User Fee for Exempt Organization Determination Letter Request, with group exemption letter requests and exemption applications, other than those filed on Forms 1023 and 1023-EZ.
The IRS announces user fees annually in updates to Rev. Proc. 2018-5 and posts them to IRS.gov.
Form 1023 revisions
The IRS revised Form 1023 and its instructions. Highlights include:
- Added a new public charity status for agricultural research organizations (Section 170(B)(1)(a)(ix))
- Eliminated a question about the advance ruling process
- Eliminated an outdated question about organizations applying for 501(c)(3) recognition more than 27 months after formation
- Increased financial data reporting requirements for organizations older than one year
If you have a technical or procedural question about Exempt Organizations, visit the Charities and Nonprofits webpage.
January 19, 2018
Form 1023-EZ Revisions
The IRS revised Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions to help small charities apply for 501(c)(3) tax-exempt status. These revisions don't change the Form 1023-EZ user fee. Here's a summary of the revisions we made to the Form 1023-EZ.
- A text box was added to Part III requesting a brief description of the organization's mission or most significant activities. This change was recommended by the IRS National Taxpayer Advocate and is designed to provide a better understanding of the most significant activities that an organization engages in to further its exempt purposes.
- Questions about annual gross receipts, total assets and public charity classification were added to the Form 1023-EZ. These questions are also on the Form 1023-EZ Eligibility Worksheet in the Instructions for Form 1023-EZ (PDF) that organizations must certify they have completed.
- Question 29 on the Form 1023-EZ Eligibility Worksheet now requires that an automatically revoked organization applying for reinstatement must seek the same foundation classification they had at the time of automatic revocation to be eligible to use the Form 1023-EZ. Organizations that are not seeking that same foundation classification must file a full Form 1023.
These revisions make it easier for organizations to select the correct form when applying for tax-exempt status and help the IRS make the correct determinations on tax-exempt status.
Early Due Dates for W-2, W-3 and Form 1099-MISC
Employers face a January 31, 2018, due date for filing 2017 Forms W-2 and W-3 with the Social Security Administration. This date applies to both electronic and paper filers.
Form 1099-MISC is due to the IRS and individuals by January 31 when reporting non-employee compensation payments in box 7.
Penalties for failure to file correct information returns or furnish correct payee statements have increased and are now subject to inflationary adjustments. These increased penalties are effective for information returns required to be filed after December 31, 2015.
Form 1098-T Reporting Changes and Limited Penalty Relief for 2017 Returns
Eligible educational institutions are required to report the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year on Form 1098-T, Tuition Statement.
Announcement 2016-42 provides relief from penalties under Section 6721 and 6722 to 2017 Forms 1098-T. The IRS will not impose penalties on eligible education institutions that report the aggregate amount billed (instead of amount received) for qualified tuition and related expenses on 2017 Form 1098-T.
Review these informative StayExempt videos:
- Reasonable Cause - Focuses on reasonable cause for abating first-tier excise taxes imposed on private foundations. Examples included.
- Self-Dealing Exemption - Discusses self-dealing under Code Section 4941 and the exception for compensation to disqualified persons.
- Disqualified Persons: Private Foundations - Covers Section 4946, which addresses disqualified persons with respect to a private foundation.
- Disaster Relief: Existing Organizations - Discusses requirements for established disaster-relief organizations.
November 7, 2017
New presentations on StayExempt
Employment Tax podcasts
EO Issue Snapshots
- IRC Section 4944(c) – Taxes on Investments Which Jeopardize Charitable Purpose – Exception for Program-Related Investments
- Exclusion of Bingo from Unrelated Business Activity
- Rents from Personal Property, "Mixed Leases," and the Rental Exclusion from UBTI
- Exclusion of Rent from Real Property from Unrelated Business Taxable Income
Fee for Form 8976
Form 8976, Notice of Intent to Operate Under Section 501(c)(4) – Organizations must pay a $50 fee at Pay.gov within 14 days of submitting the form.
Podcast on maximum loans in retirement plans
Podcast – computation of maximum loan amount from retirement plans – describes how the IRS will review multiple loans to a participant during an audit.
October 13, 2017
Audit Technique Guides for Exempt Organizations
Examiners use these guides during audits of specific types of exempt organizations.
The Enduring Relevance of Rev. Proc. 71-17 on IRC Section 501(c)(7) Organizations
Read the IRS issue snapshot on the effect of a 501(c)(7) club's non-member income on its unrelated business taxable income and exemption.
September 1, 2017
IRS provides help for Hurricane Harvey victims
The IRS is providing a variety of tax relief for those affected by Hurricane Harvey. Check our webpage for the latest updates.
Beware of Hurricane Harvey fake charity scams
The IRS issued a warning about possible fake charity scams emerging due to Hurricane Harvey and encouraged taxpayers to seek out recognized charitable groups for their donations.
More IRS disaster relief information available
- Publication 3833 (PDF), Disaster Relief, Providing Assistance Through Charitable Organizations
- Two-part mini-course on disaster relief.
Additional information about IRS help for Hurricane Harvey victims is available on IRS social media sites, including the Twitter handle @IRSnews, following the hashtag #Harvey.
February 24, 2017
Two new Issue Podcasts available for viewing
Go to the Stay Exempt Issue Podcast page on irs.gov to see Issue Podcasts on:
- When are Commercial-Type Activities a Substantial Nonexempt Purpose for an IRC 501(c)(3) Organization?
Learn about determining when commercial-type activities further a substantial nonexempt purpose for an IRC 501(c)(3) organization
- IRC 501(c)(3) Proposing Denial
Learn about the five-step roadmap the IRS uses to determine whether proposing denial is appropriate for an organization requesting recognition of tax exemption under IRC 501(c)(3)
What is an Issue Podcast?
An Issue Podcast is a resource the IRS uses for sharing technical knowledge.
An Issue Podcast is a short (approximately 15 minute), on-demand audio and visual presentation that includes:
- A brief summary and analysis of an issue
- References to key resource materials
February 22, 2017
IRS makes approved Form 1023-EZ data available online
The IRS announced today that publicly available information from approved applications for tax-exemption using Form 1023-EZ, Streamlined Application for Recognition of Exemption, is now available electronically for the first time.
February 2, 2017
Dangerous W-2 Phishing Scam Evolving; Targeting Schools, Restaurants, Hospitals, Tribal Groups and Others
The IRS, state tax agencies and the tax industry issued an urgent alert today to all employers that the Form W-2 email phishing scam has evolved beyond the corporate world and is spreading to other sectors.
December 20, 2016
Form 990-N e-Postcard page unavailable 12/26/16 to 1/6/17
The Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard) page will be down from December 26, 2016 at 11:59 a.m. until January 6, 2017 at 1:00 p.m. EST due to an annual planned maintenance. We apologize for this inconvenience.
Tax Preparedness Series: Remember donations may cut tax bills
As tax filing season approaches, the IRS reminds taxpayers who give money or goods to a charity by December 31, 2016 that they may be able to claim a deduction on their 2016 federal income tax return and reduce their taxes.
Helpful tax tips
Review these helpful tax tips.