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Internal Revenue Bulletin:  2016-30 

July 25, 2016 

REG–101689–16

Notice of proposed rulemaking by cross-reference to temporary regulations. Requirement to Notify the IRS of Intent to Operate as a Section 501(c)(4) Organization


AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Notice of proposed rulemaking by cross-reference to temporary regulations.

SUMMARY:

In the Rules and Regulations section of this issue of the Internal Revenue Bulletin, the IRS is issuing temporary regulations relating to the requirement, added by the Protecting Americans from Tax Hikes Act of 2015, that organizations must notify the IRS of their intent to operate under section 501(c)(4) of the Internal Revenue Code (Code). The text of those temporary regulations also serves as the text of these proposed regulations.

DATES:

Comments and requests for a public hearing must be received by October 11, 2016.

ADDRESSES:

Send submissions to: CC:PA:LPD:PR (REG–101689–16), room 5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–101689–16), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue N.W., Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG–101689–16).

FOR FURTHER INFORMATION CONTACT:

Concerning the proposed regulations, Chelsea Rubin at (202) 317-5800; concerning submission of comments and request for hearing, Regina Johnson at (202) 317-6901 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information contained in this notice of proposed rulemaking will be reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-2268 in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by September 12, 2016.

The collection of information is in § 1.506–1T(a)(2). The likely respondents are organizations described in section 501(c)(4) of the Code (section 501(c)(4) organizations). The collection of information in § 1.506–1T(a)(2) flows from section 506(b) of the Code, which requires a section 501(c)(4) organization to submit a notification including the following items of information: (1) the name, address, and taxpayer identification number of the organization; (2) the date on which, and the state under the laws of which, the organization was organized; and (3) a statement of the purpose of the organization. The temporary regulations provide that the notification must be submitted on Form 8976, “Notice of Intent to Operate Under Section 501(c)(4),” or its successor. In addition to the specific information required by statute, the temporary regulations require that an organization provide any additional information that may be specified in published guidance in the Internal Revenue Bulletin or in other guidance, such as forms or instructions, issued with respect to the notification. Form 8976 requires an organization to provide its annual accounting period to ensure that the statutorily-required items of information in the notification are correlated accurately within existing IRS systems. The burden for the collection of information in § 1.506–1T(a)(2)(i) through (iv) associated with the one-time submission of the notification will be reflected in the burden estimate for Form 8976.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by 26 U.S.C. 6103.

Background and Explanation of Provisions

Temporary regulations in the Rules and Regulations section of this issue of the Internal Revenue Bulletin contain amendments to the Income Tax Regulations (26 CFR part 1) that provide guidance relating to section 405 of the Protecting Americans from Tax Hikes Act of 2015 (Pub. L. No. 114–113, div. Q), regarding the new requirement that organizations must notify the IRS of their intent to operate under section 501(c)(4) of the Code. The text of those temporary regulations also serves as the text of these proposed regulations and the preamble to the temporary regulations explains the relevant provisions.

Statement of Availability of IRS Documents

For copies of recently issued revenue procedures, revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin, please visit the IRS website at http://www.irs.gov.

Special Analyses

Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant impact on a substantial number of small entities. The collection of information is in § 1.506–1T(a)(2). The certification is based on the following:

Section 1.506–1T(a)(2) requires the notification to include only a few pieces of basic information: (1) the name, address, and taxpayer identification number of the organization; (2) the date on which, and the state or other jurisdiction under the laws of which, the organization was organized; (3) a statement of the purpose of the organization; and (4) such additional information as may be prescribed by published guidance in the Internal Revenue Bulletin or in other guidance, such as forms or instructions, issued with respect to the notification.

These requirements will have a minimal burden on section 501(c)(4) organizations submitting the notification, including small section 501(c)(4) organizations. The notification requires only basic information regarding the organization and, as such, will require little time to submit. Moreover, the burden on small organizations is further minimized because the information is only required to be submitted once.

For these reasons, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Requests for Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the “Addresses” heading. The Treasury Department and the IRS request comments on all aspects of the proposed rules. All comments will be available at www.regulations.gov or upon request.

A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Internal Revenue Bulletin.

Drafting Information

The principal author of these regulations is Chelsea R. Rubin, Office of Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the Treasury Department and the IRS participated in their development.

* * * * *

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.506–1 is added to read as follows:

§ 1.506–1 Organizations required to notify Commissioner of intent to operate under section 501(c)(4).

[The text of proposed § 1.506–1 is the same as the text for § 1.506–1T published elsewhere in this issue of the Internal Revenue Bulletin].

John Dalrymple, Deputy Commissioner for Services and Enforcement.

(Filed by the Office of the Federal Register on July 8, 2016, 11:15 a.m., and published in the issue of the Federal Register for July 12, 2016, 81 F.R. 45088)


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