On December 18, 2015, President Obama signed The Protecting Americans from Tax Hikes Act (the “Act”). The Act contains a requirement that 501(c)(4) social welfare organizations file a notice with the IRS. Prior to the Act, 501(c)(4) organizations could, but were not required to, submit a Form 1024 requesting tax-exempt status from the IRS.
The new notice requirement applies to 501(c)(4) organizations that are created after December 18, 2015 and to certain organizations existing on that date. New organizations are required to file the notice with the IRS no later than 60 days after the organization is created. For other organizations that have not filed a Form 1024 or not filed at least one Form 990, the notice is due on June 15, 2016. The notice must include the organization’s identifying information, the date of organization, and a statement of purpose. Additionally, the organization will be required to pay a user fee to file the notice. The IRS will send an acknowledgment letter in response to the notice. However, the acknowledgment letter is not a determination that the organization qualifies as a tax-exempt organization. If the organization wants recognition of its tax-exempt status, the organization may separately request a determination. Failure to file the notice will subject both the organization and the persons that failed to file the notice to penalties.
The IRS intends to issue temporary regulations describing the notice requirements. Organizations will have at least 60 days from the date of the regulations to satisfy the notice requirement and should wait for the regulations to be issued before submitting any information.
If you have questions about the new notice or other tax-exempt organization issues, please contact Edie Crump (937-449-5530).