Exemption Application Must Be Filed Electronically

Superseded by Rev. Proc. 2022-5

Modifies Rev. Proc. 2021-5

26 CFR 601.201: Rulings and determination letters.

SECTION 1. PURPOSE

This revenue procedure modifies Revenue Procedure 2021-5, 2021-1 I.R.B. 250, by updating the procedures for Exempt Organizations determination letters with respect to the electronically submitted Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code, which is the application used to apply for recognition of exemption as an entity described in § 501(c)(4). The modifications to Rev. Proc. 2021-5 made by this revenue procedure provide that the electronic submission process is the exclusive means of submitting a completed Form 1024-A, except for submissions eligible for the 90-day transition relief provided in section 4 of this revenue procedure.

SECTION 2. CHANGED SUBMISSION PROCESS

The IRS has revised and updated Form 1024-A and provided for it to be electronically submitted at www.pay.gov. The electronic submission process for Form 1024-A replaces the paper submission process for Form 1024-A after January 5, 2021, subject to the transition relief provided in section 4 of this revenue procedure. Section 3 of this revenue procedure modifies Rev. Proc. 2021-5 to set forth procedures for issuing determination letters in response to electronically submitted Form 1024-A applications. Unless otherwise modified in this revenue procedure, the provisions of Rev. Proc. 2021-5 continue to apply.

SECTION 3. MODIFICATIONS TO REVENUE PROCEDURE 2021-5

.01 Section 4.01 of Rev. Proc. 2021-5 is modified to read as follows:

.01 This section explains the general instructions for requesting determination letters. However, certain procedures do not apply to requests submitted on Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, or Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code, as indicated in this revenue procedure or in the forms and their instructions. In addition to these general instructions, specific procedures apply to requests submitted by letter (as described in section 5), applications for recognition of exemption from Federal income tax under § 501 or § 521 (as described in section 6), and to requests for determinations submitted on Form 8940, Request for Miscellaneous Determination (as described in section 7).

.02 Paragraph (4) of section 4.02 of Rev. Proc. 2021-5 is modified to read as follows:

(4) Form 1024-A application. An organization seeking a determination letter from the Service recognizing tax-exempt status under § 501(c)(4) must electronically submit a completed Form 1024-A at www.pay.gov. In the case of an organization that provides credit counseling services and seeks recognition of exemption under § 501(c)(4), see § 501(q).

Section 501(c)(4) organizations may choose to seek a determination letter recognizing tax-exempt status under § 501(c)(4) by filing Form 1024-A, but are not required to do so except in certain cases (see, for example, § 6033(j)(2) regarding failures to file annual information returns or annual electronic notifications required under § 6033(a) or (i)). Submission of Form 1024-A does not relieve an organization of the requirement to submit Form 8976, Notice of Intent to Operate Under Section 501(c)(4). For additional information about the electronic submission process, refer to Form 1024-A and its Instructions.

.03 Paragraph 4.04(3) of Rev. Proc. 2021-5 is modified to read as follows:

(3) Individual or representative authorized to sign Form 1024-A. In the case of a request for a determination letter made by filing Form 1024-A, an officer, a director, a trustee, or other official who is authorized to sign for the organization must sign the application. The signature of a representative authorized by a power of attorney who is not an officer, director, trustee, or other official of the organization will not satisfy the signature requirement for Form 1024-A. See the instructions to the Form 1024-A for more information on who may sign the application on behalf of an organization.

.04 The first paragraph of section 4.09(1) of Rev. Proc. 2021-5 is modified to read as follows:

(1) Procedures for requesting expedited handling. Except for a request on the electronically submitted Form 1023 or Form 1024-A, the request for expedited handling must be made in writing, preferably in a separate letter sent with, or soon after filing, the request for the determination letter. If the request is not made in a separate letter, then the letter in which the determination letter request is made should say, at the top of the first page: "Expedited Handling Is Requested. See page ___ of this letter."

In the case of the electronically submitted Form 1023 or Form 1024-A, a request for expedited handling must be indicated on the form and a supporting written statement must be submitted as an attachment with the completed application.

.05 Section 6.04 of Rev. Proc. 2021-5 is modified to read as follows:

.04 An organization applying for recognition of exemption must attach a completed Form 8718, User Fee for Exempt Organization Determination Letter Request, to its application, unless the organization is submitting Form 1023, Form 1023-EZ, or Form 1024-A. Form 8718 is an attachment related to user fees that is not, itself, a determination letter application.

.06 Section 6.06(1)(a) of Rev. Proc. 2021-5 is modified to read as follows:

(1) A completed application (other than a Form 1023-EZ), including a letter application, is one that:

(a) is signed or, in the case of a Form 1023 or Form 1024-A, is electronically signed by an authorized individual under penalties of perjury (see sections 4.04 and 4.06 of this revenue procedure);

.07 Section 6.06(1)(c) of Rev. Proc. 2021-5 is modified to read as follows:

(c) (i) for organizations other than those described in § 501(c)(3) or § 501(c)(4), includes a statement of receipts and expenditures and a balance sheet for the current year and the three preceding years (or the years the organization was in existence, if less than four years), and if the organization has not yet commenced operations or has not completed one accounting period, a proposed budget for two full accounting periods and a current statement of assets and liabilities;

(ii) for organizations described in § 501(c)(3) or § 501(c)(4), see Form 1023 and Instructions for Form 1023 or Form 1024-A and Instructions for Form 1024-A, respectively.

.08 Paragraph (2) of section 6.08 of Rev. Proc. 2021-5 is modified to read as follows:

(2) When an application is not submitted within 27 months of formation. An organization that otherwise meets the requirements for tax-exempt status and the issuance of a determination letter but does not meet the requirements for recognition from date of formation will be recognized from the postmark date of its application or the submission date of its Form 1023, Form 1023-EZ, or Form 1024-A, as applicable.

.09 Paragraph (1) of section 14.06 of Rev. Proc. 2021-5 is modified to read as follows:

(1) Payment of user fees for applications of recognition of exemption on Form 1023, Form 1023-EZ, or Form 1024-A. User fees for applications for recognition of exemption on Form 1023, Form 1023-EZ, or Form 1024-A must be paid through www.pay.gov.

.10 Section 14.07 of Rev. Proc. 2021-5 is modified to read as follows:

.07 Form 8718 is intended to be used as an attachment to applications other than Form 1023, Form 1023-EZ, or Form 1024-A for the attachment of the applicable user fee check.

.11 Section 15.01(1)(a) of Rev. Proc. 2021-5 is modified to read as follows:

(1) The following types of requests and applications handled by the EO Determinations Office should be sent to the Internal Revenue Service Center, at the address in section 15.01(2):

(a) applications for recognition of exemption on Form 1024 and Form 1028;

.12 Section 15.02 of Rev. Proc. 2021-5 is modified to read as follows:

.02 Applications for recognition of exemption on Form 1023, Form 1023-EZ, and Form 1024-A are handled by the EO Determinations Office but must be submitted electronically online at www.pay.gov. Paper submissions of Form 1023, Form 1023-EZ, and Form 1024-A will not be accepted.

SECTION 4. TRANSITION RELIEF

.01 Except as provided in section 4.02, an organization seeking recognition of tax-exempt status under § 501(c)(4) using Form 1024-A must electronically submit the form and user fee online at www.pay.gov.

.02 The Internal Revenue Service will accept for processing a completed paper Form 1024-A accompanied by the correct user fee, as described in Rev. Proc. 2021-5, without applying the modifications of this revenue procedure, if the submission of the Form 1024-A is postmarked on or before the date that is 90 days after the effective date of this revenue procedure.

SECTION 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2021-5 is modified.

SECTION 6. EFFECTIVE DATE

This revenue procedure is effective January 5, 2021, the date this revenue procedure was announced by news release.

SECTION 7. DRAFTING INFORMATION

The principal author of this revenue procedure is Patrick Sternal of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further information regarding this revenue procedure contact Mr. Sternal at (202) 317-5800 (not a toll-free call).