IRS Issues Electronic Filing Regulations for Small Tax Exempt Organizations

The Internal Revenue Service (IRS) and Department of the Treasury have promulgated final regulations impacting tax-exempt organizations with gross annual receipts that generally do not exceed $25,000. The final regulations became effective July 23, 2009. The regulations are applicable to annual filing periods beginning after 2006.

In 2006, the Pension Protection Act was passed, including a requirement that the Treasury Secretary promulgate regulations regarding the time and manner in which certain tax-exempt organizations must file annual electronic notification. The regulations that followed amend the Income Tax Regulations (26 CFR Part 1, section 6033(i)(1)), which relate to requirements for notification by entities that are not currently required to file an annual information return (Form 990) under section 6033(a)(1).

Under the final regulation, 26 CFR § 1.6033-6, tax-exempt entities under § 501(a) that are not required to file annual information returns as described in § 1.6033-2(a)(2) must submit electronic notification containing the legal name of the organization, any assumed business names, mailing and web address, tax identification number, name and address of principal officer, evidence of ongoing basis for exemption under § 6033(a)(1), and any additional information required for processing. Certain employer-created qualified pension, profit-sharing, and stock bonus plans, as defined in § 401(a) and certain religious and apostolic organizations, as defined in § 501(d) are not subject to the regulation. By submitting the electronic notification, an organization acknowledges it is not required to file a return under § 1.6033(a) because its annual gross receipts do not normally exceed $25,000. The regulation also contains requirements for record maintenance, as provided in § 1.6001. If the organization submits a complete Form 990 or 990-EZ, however, the requirements of annual electronic notification will be deemed satisfied. The final regulation does not relieve an organization from any other filing requirements.

The notification must be filed based on the annual accounting period of the organization; however, if the organization does not have an annual accounting period, notice shall be filed on the basis of the calendar year. Electronic notification must be submitted on or before the 15th day of the 5th calendar month after the close of the period for which the notification is being submitted.

The statements contained herein are for informational purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.