The Inside Income Service has revised Kind 1024, “Software for Recognition of Exemption Underneath Part 501(a) or Part 521 of the Inside Income Code,” to allow digital submitting, and is starting to require purposes for tax-exempt standing to be e-filed.
Beginning Monday, Jan. 3, purposes for recognition of exemption on Kind 1024 need to be submitted electronically on-line at Pay.gov. Nonetheless, the IRS is providing a 90-day grace interval throughout which it should proceed to simply accept paper variations of Kind 1024 (Rev. 01-2018) and letter purposes.
“Digital submitting makes it simpler to finish an software for tax-exempt standing whereas lowering errors,” mentioned Sunita Lough, commissioner of the IRS Tax Exempt and Authorities Entities division, in an announcement Monday. “Digital submitting additionally shortens IRS processing time so candidates gained’t wait as lengthy for a response.”
Sunita Lough, commissioner of the IRS Tax Exempt and Authorities Entities Division
Organizations which can be asking for determinations underneath Part 521 of their tax-exempt standing are actually additionally ready to make use of the digital Kind 1024 as a substitute of Kind 1028, “Software for Recognition of Exemption Underneath Part 521 of the Inside Income Code.”
The required consumer charge for Kind 1024 will keep at $600 for 2022, however candidates might want to pay the charge via Pay.gov when submitting the shape. The funds might be made immediately from a checking account or by credit score or debit card.
The transfer is a part of an general effort by the IRS to develop e-filing by nonprofits and different tax-exempt organizations, particularly because the company stays challenged by a backlog of tens of millions of paper tax returns, info returns and different correspondence which have collected in the course of the pandemic. IRS officers mentioned the growth of Kind 1024 e-filing throughout a gathering with the American Institute of CPAs final month (see story).
Along with Monday’s announcement, the IRS issued Income Process 2022-08 , which modifies Rev. Proc. 2022-5 to permit for the brand new digital submission course of on www.pay.gov of Kind 1024. The income process gives the 90-day transition aid interval, throughout which paper Kind 1024 and letter purposes might be accepted and processed by EO Determinations. The sooner Rev. Proc. 72-5 and Rev. Proc. 2015-17 are being modified and outmoded by the brand new income process.
As a part of the revision, purposes for recognition of exemption underneath Sections 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), (29) and 501(d) can now not be submitted as letter purposes. As an alternative, these requests must be made on the digital Kind 1024. Thus, organizations which can be described in Part 501(c) (apart from 501(c)(3) and (c)(4)) and 501(d) making use of for tax-exempt standing, now want to make use of the digital Kind 1024. Part 501(c)(3) organizations should proceed to make use of Kind 1023 or Kind 1023-EZ, and Part 501(c)(4) organizations will proceed to make use of Kind 1024-A. These varieties additionally must be filed electronically.