On July 8, 2016, the Internal Revenue Service published regulations implementing Section 506 of the Internal Revenue Code. Section 506 requires that certain 501(c)(4) organizations notify the IRS within 60 days of when they are formed.
Under these new regulations and Revenue Procedure 2016-41, certain Section 501(c)(4) organizations are required to File Form 8976 to make this notification. Form 8976 is an electronically filed form and requires the following information:
- Name of the organization
- Address of the organization
- The organization’s Employer Identification Number (EIN)
- Date of organization (the date a representative of the State of Incorporation approved the organization’s articles of incorporation)
- State in which the organization is incorporated
- Statement that the purpose is to operate as a social welfare organization, civic league or a local association of employees
- Month the annual accounting period of the organization ends
The Form 8976 also includes a statement that the information provided is correct and that the person filing the Form is authorized to do so.
The fee to file Form 8976 is $50.
Form 8976 must be filed by all organizations intending to qualify as tax exempt under Section 501(c)(4) unless their organization date is prior to July 8, 2016 and the organization filed either Form 1024 seeking determination from the IRS that the organization qualified under Section 501(c)(4) or filed a Form 990, 990-EZ or 990-N prior to July 8, 2016.
For organizations formed on or before July 8, 2016, Form 8976 is due by September 6, 2016. For organizations formed after July 8, 2016, Form 8976 is due 60 days after their organization dates.
There is a penalty of $20 per day, up to $5,000 for incomplete or late filed Forms 8976. The penalty will be assessed against the organization required to file; however, if the situation is not corrected on a timely basis, responsible individuals (e.g. board members) may also be assessed a penalty.
The process and related follow-up planned for Form 8976 is as follows:
- Organization files Form 8976 electronically and pays the filing fee at https://services.irs.gov/registration/
- Organization receives a confirmation of transmission from the electronic filing system
- Within 60 days of filing a complete Form 8976, the organization will receive an acknowledgement of receipt from the IRS.
- If the IRS does not consider the Form 8976 to be complete, the form and filing fee will be returned to the organization. The organization will then resubmit the filing.
The IRS was very clear that the acknowledgement of receipt is not a determination of exempt status. Organizations that want to obtain a determination of exempt status must still file Form 1024.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.
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