Overview
Today, the IRS issued temporary regulations implementing reporting requirements for social welfare organizations described in section 501(c)(4). Under section 506, which was added by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), a section 501(c)(4) organization organized after December 18, 2015 (and certain section 501(c)(4) organizations existing on that date) must notify the IRS of its intent to operate as a section 501(c)(4) organization.
The temporary regulations generally require a section 501(c)(4) organization to submit the notification to the IRS on a newly-developed electronic form, Form 8976 (or its successor) no later than 60 days after the date the organization is organized, along with a filing fee. The temporary regulations clarify that a section 501(c)(4) organization must submit the notification whether it is organized in the US or outside the US. The preamble states that Rev. Proc. 2016-41 will provide additional guidance on the procedures for submitting the notification, including guidance concerning the circumstances that will constitute reasonable cause for abating a penalty for failure to provide the required notice.
In Notice 2016-9, the IRS had extended the deadlines provided for in section 506, pending the issuance of temporary regulations. The temporary regulations provide that an organization that was organized on or before July 8, 2016 will have until September 6, 2016 to submit the notification. Transition relief is provided for organizations that, on or before July 8, 2016, either: (1) applied for a written determination of recognition as a section 501(c)(4) organization (using Form 1024); or (2) filed at least one Form 990 (or, if eligible, Form 990-EZ or Form 990-N).
The PATH Act authorized the IRS to require an organization that submits a section 506 notification to include additional information in support of the organization’s treatment as a section 501(c)(4) organization on the first Form 990 or 990-EZ, as applicable, filed by the organization after submitting the notification. The temporary regulations, however, do not prescribe any such additional information to be reported on Form 990 or 990-EZ at this time.
The text of the temporary regulations also serves as the text for proposed regulations.