August 8, 2016 in Commentary, Non-Profit Commentary

NEWS: New Requirements for new 501(c)4 organizations

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Based on legislation passed in 2015, the IRS has implemented new requirements for new entities planning to operate as 501(c)4 organizations.  These organizations are now required to file a notice of intent to operate as a 501(c)4.  You’re only required to file the notice once using Form 8976. The form must be filed electronically and carries a filing fee of $50.

This new requirement applies primarily to organizations that have not yet applied for a tax exemption using Form 1024. If your organization had already applied using Form 1024 prior to July 2016 or has made an annual filing using one of the Form 990 variants prior to July 2016,  there’s no need to submit Form 8976. If your organization is planning to submit Form 1023, it is still required to file a Form 8976 notice. More importantly, this notice must be filed within 60 days of your organization’s formation. Failing to file within that period risks heavy fines.

For the sake of background, 501(c)4 organizations are typically defined as either “social welfare organizations” or “local associations of employees”.  Social welfare organizations are devoted to promoting the common good or welfare of the community as a whole. Civic leagues are a good example.  A local association of employees, on the other hand, are groups whose members all work for employers within a particular municipality and are devoted to charitable, educational, or recreational purposes.