IRS memo for TE/GE examiners; interim guidance on “section 506 notifications”
IRS memo for TE/GE examiners
The IRS released a memorandum as interim guidance for examiners in the Tax Exempt and Government Entities (TE/GE) division regarding the determination whether an organization has timely filed Form 8976, and if not, on assessing the applicable penalties.
Read the memorandum: TE/GE-04-0321-0006 [PDF 177 KB] (March 1, 2021)
The “Protecting Americans From Tax Hikes Act of 2015” (PATH Act) imposed a new notification requirement for section 501(c)(4) organizations. This process was first described in Rev. Proc. 2016-41 and also in Reg. section 1.506-1.
An organization generally must notify the IRS that it is operating as a section 501(c)(4) organization no later than 60 days after the date the organization was organized (that is, formed as a legal entity, or the “date of organization”), by electronically filing Form 8976, Notice of Intent to Operate Under Section 501(c)(4).
The TE/GE memo explains that the organization must also pay the correct user fee. The process of filing Form 8976 and paying the user fee is referred to as an “IRC Section 506 notification.” The memo sets out filing checks that TE/GE examiners must perform regarding Form 8976 during all examinations of section 501(c)(4) organizations.
For more information, contact a tax professional with KPMG’s Washington National Tax practice:
Ruth Madrigal | +1 202 533 8817 | email@example.com
Preston Quesenberry | +1 202 533 3985 | firstname.lastname@example.org
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