IRS implements new registration requirements for Section 501(c)(4) organizations.

IRS implements new registration requirements for Section 501(c)(4) organizations.

We previously reported that social welfare organizations had to register under section 506 of the Internal Revenue Code.  The IRS has delayed the start date for the new requirement.  They have now issued temporary and proposed regulations.  They have also issued form 8976 for registration.

Social welfare organizations have 2 options when seeking tax exemption.  They can self-declare their tax exempt status under section 501(c)(4) and file 990 or 990-ez for future years. They can also file form 1024 to seek a formal IRS declaration of their tax exempt status.

Under the temporary and proposed regulations, social welfare organizations that were established between December 18, 2015 and July 8, 2016, have not applied for tax exempt status but have filed at least one annual return or notice (form 990 series) do not have to file form 8976.

Organizations that were established before December 18, 2015, but had not applied for a determination of tax exempt status, and had not filed an annual return or report, must file form 8976 within 60 days from the issuance of these regulations.  The deadline is therefore September 6, 2016.

The form must be filed electronically.  You can get an extension for reasonable cause, which is described in Revenue Procedure 2016-41.  There are penalties for late filing.

If you are thinking of forming an organization under section 501(c)(4), this is an important requirement.  Call us if you have questions.