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IRS Releases Updates for Exempt Organizations

Jill Boyle

Dec 21 2021

2 min read

An overview of the latest from the IRS as it pertains to not-for-profit organizations

Changes to Form 1024

Last week, the IRS released revisions to Form 1024, Application for Recognition of Exemption Under Section 501(a), allowing tax-exempt organizations to submit the form electronically. This will be the first year applicants can file electronically.

Organizations can use the following link to access the form online. Electronic filing will become available early next year, according to the IRS in a recent memo.

New Technical Guides for Tax-exempt Organizations

In that same memo, the IRS also announced eight new Technical Guides for not-for-profit entities. These guides can be found in full on the IRS’s website. The documents address private foundations, taxes on net investment income and excess business holdings, foreign organizations and much more.

Clarity in Notice 2021-56 for LLCs

Limited Liability Companies (LLCs) wishing to achieve exempt status are required, as stated by the IRS, to provide the requested information within Notice 2021-56 on their Form 1023 applications. The Notice requires LLCs to submit state-approved articles of organization and the adopted operating agreement. These two items must include the specifics also identified in the Notice.

In Other News

Request for a Copy of Exempt Organization IRS Application or Letter, Form 4506-B, was updated. This new version must be used when requesting copies of an organization’s exemption application. Further, Form 4506-A, Request for a Copy of Exempt or Political Organization IRS Form, was revised at the same time. This form applies to political organizations.

For more information, the IRS offers an Unrelated Business Income course and the Tax-exempt Organization workshop for organizations and its leaders. If you have any questions about these changes or other matters pertaining to your not-for-profit organization, please contact our experts.

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About the Author

Jill Boyle

Jill Boyle, CPA, is a director with more than 13 years of experience providing tax and compliance services to a variety of clients, with a concentration in serving not-for-profits and individual taxpayers. Jill primarily serves public charities, private foundations, and professional organizations. She is an extraordinary resource to clients and provides direction and leadership for the tax team.