Legal Alert - New IRS Notice Requirement for 501(c)(4) Organizations
On July 8, 2016, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-41 implementing a provision of the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”). The provision, Section 405 of the PATH Act, added new Section 506 of the Internal Revenue Code of 1986, as amended (the “Code”). Code Section 506 requires a newly formed organization that intends to operate as a tax-exempt social welfare organization to notify the IRS of its intent to be recognized as a Code Section 501(c)(4) organization no later than 60 days after its formation date under state law. This 60-day notice requirement is not a substitute for filing an IRS Form 1024, Application for Recognition of Exemption Under Section 501(a), and is not a request for an IRS determination letter. In order to satisfy the 60-day notice requirement, an organization must electronically file a completed IRS Form 8976, Notice of Intent to Operate Under Section 501(c)(4).