The IRS, over the past few weeks, has released revisions to forms and instructions used by section 501(c)(3) organizations and most other organizations exempt under section 501(a) to apply for recognition of tax-exempt status.
In addition, the IRS released a new form for section 501(c)(4) organizations that choose to apply for recognition of their tax-exempt status. Significant changes in each of these forms are summarized below.
Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and instructions have been updated to:
Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, now includes a line instructing applicants to describe their mission and most significant activities, actual or planned, in 255 characters or less.
Form 1024, Application for Recognition of Exemption Under Section 501(a), and its instructions were revised to clarify that section 501(c)(4) organizations, to the extent such organizations decide to apply for recognition of tax-exempt status, should use Form 1024-A, not Form 1024.
Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code, is to be used by organizations described in section 501(c)(4) that wish to apply for recognition of exemption. The instructions to the form make clear that such organizations are not required to file Form 1024-A, but may do so if they wish to receive an IRS determination letter of section 501(c)(4) status. The IRS released a draft version of the form on September 29, 2017.
Form 1024-A simplifies the application process for section 501(c)(4) organizations by removing those portions of Form 1024 not relevant to organizations seeking recognition under section 501(c)(4) while still collecting the information necessary for the IRS to make a determination of section 501(c)(4) status. While Form 1024-A requires much of the same information that was previously required by Form 1024, certain additional information not included in Form 1024 (e.g., information regarding grants to foreign organizations and family or business relationships between certain executives and employees and the organization) is now required as well.
For more information, contact a tax professional with KPMG’s Washington National Tax practice:
Preston Quesenberry | +1 202 533 3985 | email@example.com
Randall Thomas | +1 202 533 3786 | firstname.lastname@example.org
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.