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Annual revenue procedures for 2020 for exempt organizations

Annual revenue procedures for 2020

The IRS has posted the first edition of the Internal Revenue Bulletin for 2020 (IRB 2020-1, dated January 2, 2020) providing the “annual revenue procedures” for 2020—including one that specifically concerns exempt organizations described in section 501(c).

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Rev. Proc. 2020-5 sets forth procedures for issuing determination letters to exempt organizations, and reflects increased user fees for submissions postmarked on or after July 1, 2020, involving the following determinations:

Determination letters User fee
Group exemption letters  Increased from $2,000 to $2,500
Reclassification of private foundation status Increased from $400 to $500
Terminations of private foundation status (advance or final rulings) Increased from $400 to $500
Advance approval of “set-asides” Increased from $2,000 to $2,500
Advance approval of organization's grant making procedures Increased from $2,000 to $2,500
Advance approval of voter registration activities Increased from $2,000 to $2,500
Annual information return filing requirements Increased from $400 to $500
Determination of “unusual grants” for purposes of certain public support tests Increased from $400 to $500
Other determinations Increased from $400 to $500


Rev. Proc. 2020-5 also announces that an electronic version of Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, is expected to replace the paper Form 1023 in 2020 and that a revenue procedure is expected to be published to provide information on and procedures for the new electronic Form 1023, including the applicable transition period.

Finally, Rev. Proc. 2020-5 permits taxpayers to submit faxed signatures if requested by the IRS in certain specific situations and clarifies that the IRS will not issue a determination letter on the section 501(c) status of a domestic organization currently recognized as exempt under section 501(c) that has changed its form or state of organization but is not required to reapply for recognition of exempt status under Rev. Proc. 2018-15.

IRB 2020-1 [PDF 18 MB] provides, in 290 pages, these six annual revenue procedures:

  • Rev. Proc. 2020-1 - Letter rulings, information letters, and determination letters
  • Rev. Proc. 2020-2 - Technical advice
  • Rev. Proc. 2020-3 - Areas in which rulings will not be issued (domestic area)
  • Rev. Proc. 2020-4 - Determination letters and letter rulings (tax-exempt and government entities, employee plans)
  • Rev. Proc. 2020-5 - Determination letters (exempt organizations)
  • Rev. Proc. 2020-7 - Areas in which rulings will not be issued (international area)

 

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

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