IRS Releases Updates for Exempt Organizations

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

Changes to Form 1024

a group of not-for-profit leaders discussing strategies and financial business plans at long open table. leader standing at the front of the roomLast 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:

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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