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Exempt Organizations Update Archive

September 13, 2016

System outage delays filing of Form 8976 for some organizations intending to operate under Section 501(c)(4)

The requirement to file new Form 8976 applies only to certain organizations that intend to operate as a section 501(c)(4) organization and had not submitted a Form 990, 990-EZ, 990-N, or Form 1024 prior to July 8, 2016. Organizations operating under any other 501(c) section, such as 501(c)(3), need not file this notice.

We have experienced some system outages that affect the filing of Form 8976.  If your organization was unable to submit the Form 8976 due to a system outage, please submit your Form 8976 now. The IRS will take any system outages into consideration when evaluating the statutorily imposed penalties for late filing of the Form 8976.

If you experienced a problem submitting the Form 8976, please contact us at (877) 829-5500. We will work with you to ensure that you are not subjected to any penalties as a result of system outages. Legislation enacted at the end of 2015 added section 506 to the Internal Revenue Code, which requires certain organizations to notify the IRS of their intent to operate as a section 501(c)(4) organization. The IRS released new electronic Form 8976 on July 8.

Learn more.

July 11, 2016

New requirement for organizations intending to operate under Section 501(c)(4): Submit Form 8976

New legislation enacted at the end of 2015 added section 506 to the Internal Revenue Code. Section 506 requires an organization to notify the IRS of its intent to operate as a section 501(c)(4) organization. The IRS has developed a new form – Form 8976 – that organizations should use to provide this notification. The Form 8976 may only be submitted electronically. The Form 8976 – Electronic Registration System allows organizations to complete the notification process, keeps account information current and enables organizations to receive secure, digital communications from the IRS. A user fee of $50 must be submitted to Pay.gov to complete your organization’s notification. You do not need special software to submit a notification. 
Learn more.

User fee decreased for Form 1023-EZ
On July 1 the user fee to process the Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, was decreased from $400 to $275 (see Rev. Proc. 2016-32). You must submit the fee through pay.gov when you file a 1023-EZ application. You can pay the fee directly from your bank account or by credit/debit card.

EP and EO participating in 2016 IRS Nationwide Tax Forums
Employee Plans and Exempt Organizations will participate in the 2016 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.
Read article


May 17, 2016

Some Form 990-N Electronic Filing System (e-Postcard) users may see error messages

The Form 990-N online filing system moved from Urban Institute to IRS.gov in February. While the new system has been successful, a very small percentage of users see site errors while registering or submitting the form. The IRS offers this advice:

  • Review the steps listed on How to File Form 990-N. Pay particular attention to the “text character” restrictions.
  • The Form 990-N (e-Postcard) User Guide will explain each step in the filing process.
  • If site errors are unresolved, call TE/GE Customer Account Services at 877-829-5500. A representative will gather your Form 990-N information for filing on your organization's behalf.
  • Organizations will not be penalized for filing late if it was caused by website issues. Organizations should continue efforts to file, even if they are late.

For more on filing Form 990-N, see the Form 990-N page on IRS.gov.

Don’t forget to register for the free webcast about Accumulated Sick and Vacation Pay Deferred to 403(b) or 457(b) Plans

When: June 2, 2016; 2 p.m. (Eastern)

How: Register for this event. You will use the same link to attend the event.

Learn about:

  • When is accumulated sick and vacation leave pay subject to Federal Employment Taxes
  • When can taxes be deferred and for how long?
  • What is an elective contribution?

May 11, 2016

EP and EO participating in 2016 IRS Nationwide Tax Forums – Register Now

Employee Plans and Exempt Organizations will participate in the 2016 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.

Read article.


May 5, 2016

IRS Announcement 2016-17: Limited Penalty Relief for Filers of Form 1098-T, Tuition Statement

The IRS will not impose penalties under section 6721 or 6722 on eligible educational institutions with respect to Forms 1098-T, Tuition Statement, required to be filed and furnished for the 2016 calendar year under section 6050S if the institution reports the aggregate amount billed for qualified tuition and related expenses on Form 1098-T instead of the aggregate amount of payments received as required by section 212 of the Protecting Americans from Tax Hikes Act of 2015.

Read Announcement 2016-17.


April 27, 2016

Register for IRS May 12 webinar: Reporting compensation on Form 990 and Form 990-EZ

1-2 p.m., ET

Learn about:

  • How to report compensation
  • How to complete Form 990 and Form 990-EZ
  • What has to be reported
  • Other compensation
  • Exceptions
  • Highest compensated employees

Read IRS TE/GE “Issue Snapshots”

The IRS Tax Exempt and Government Entities (TE/GE) Knowledge Management team periodically issues research summaries called “Issue Snapshots” on tax-related issues for practitioners. They are posted on IRS.gov’s electronic reading room page under “Training and Reference Materials.” Bookmark and check the page often for helpful new materials.

IRS seeks volunteers for Taxpayer Advocacy Panel through May 16

The IRS seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel, a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns, and makes recommendations for improving IRS service and customer satisfaction.

Read article.


March 23, 2016

Virtual Tax-Exempt 501(c)(3) Workshop Available for Educational Institutions

In an effort to allow educational institutions better access to our popular workshops, the Exempt Organizations office has posted a virtual version of the workshop lessons on our educational website, StayExempt.irs.gov.

Have you attended one of the IRS Exempt Organizations (EO) Small and Medium-Sized 501(c)(3) Workshops? Here’s an easy way to experience the training from your own computer. In an effort to allow educational institutions better access to our popular workshops, the Exempt Organizations (EO) office has posted a virtual version of the workshop lessons on our educational website, StayExempt.irs.gov.

This online tool covers the basics of tax compliance for small and medium-sized 501(c)(3) organizations and is designed to help faculty, students and staff involved in nonprofit management and related programs in colleges and universities.

Educational institutions are encouraged to use these courses to enhance their learning programs. Participants may take these interactive presentations in any order at any time. Certificates of attendance are provided at the end of most lessons.

If you use the presentations as part of your curriculum or in a classroom setting, please use the link provided on the Workshop page to let us know. We’d like to hear feedback on your experience. Please help spread the word.


February 2, 2016

Form 990-N submission website will change Feb. 29

Beginning February 29, Form 990-N electronic submissions will be accepted through IRS.gov instead of Urban Institute’s website.

IRS provides tax relief to Missouri storm victims; tax deadline extended to May 16

Missouri storm victims will have until May 16 to file their returns and pay any taxes due, the IRS announced recently. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief.

News Release.

Read IRS Tax Tips

These tips (including the most recent, Ten Great Ways to Use IRS.gov) provide important tax information. Please share them with your employees and with members of the communities you serve.


December 18, 2015

Inclusion of certain housing improvement expenditures that provide community benefit for reporting on Form 990, Schedule H

IRS has recently received questions regarding the inclusion of certain housing improvement expenditures that provide community benefit for reporting on Schedule H (Form 990). The Instructions for Schedule H currently include physical improvements and housing in Part II (Community Building Activities).

Nevertheless, the Instructions also provide that “some community building activities may also meet the definition of community benefit.”  The Instructions for Schedule H describe community benefit activities or programs as those addressing an established need that “seek to achieve a community benefit objective, including improving access to health services, enhancing public health, advancing increased general knowledge, and relief of a government burden to improve health.”

Thus, some housing improvements and other spending on social determinants of health that meet a documented community need may qualify as community benefit for the purposes of meeting the community benefit standard.  If a hospital chooses to report, such a community benefit in Part I (Financial Assistance and Certain Other Community Benefits at Cost) of Schedule H, then the Instructions say: “Do not report in Part II community building costs that are reported on Part I, line 7 as community benefit.”

Forms 1023 & 1024 product pages updated on IRS.gov

In response to recommendations made in the Senate Finance Committee Bipartisan Report to lessen taxpayer burden and enhance customer service in the application process, the Form 1023 and Form 1024 product pages have been updated on IRS.gov. They provide a wide range of readily available information to assist organizations with the application process. On the left side of the product pages is “Information on Tax-Exempt Application Process” and links addressing these topics:

  • Before Applying for Tax-Exempt Status
  • Top Ten Tips to Shorten the Tax-Exempt Application Process
  • Application for Exemption or Misc. Determination:  Sample Questions
  • Determinations Guide Sheets for Exempt Organizations
  • Applying for Tax-Exempt Status
  • Optional Expedited Processing Expanded to All Eligible 501(c)(4) Applicants Beginning in December 2013
  • Need a Form or Publication? These webpages assist with the application process and enable groups to easily access information while applying for exemption.

November 13, 2015

Electronic Filers of Affordable Care Act Information Returns must use AIR Program

Health coverage providers and applicable large employers – and those assisting them in preparation for electronically filing the 2015 health care information returns - need to understand the IRS ACA Information Return (AIR) electronic filing process.

AIR Tax Tip

Page Last Reviewed or Updated: 20-Apr-2017