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.

1000

Related content

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 | ruthmadrigal@kpmg.com

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

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained 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.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal