IRS Introduces Electronically Filed Form 1023

• Published date: 01 April 2020
• DOI: http://doi.org/10.1002/npc.30708
• Date: 01 April 2020

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

IRS INTRODUCES

ELECTRONICALLY

FILED FORM 1023

The IRS significantly revised the rules concerning filing of the application

for recognition of exemption by organizations seeking charitable status (Form

1023). Beginning January 31, these applications generally must be submitted

electronically at www.pay.gov. The agency provided a 90-day grace period during

which it will accept paper versions of this application.

Accordingly, the IRS has updated its procedures for filing this application (Rev.

Proc. 2020-5 (referenced in last month’s issue)) by issuing modified guidance (Rev.

Proc. 2020-8).

Tammy Ripperda, commissioner of the Tax Exempt and Government Entities

Division, said that “[f]iling electronically reduces errors, and we believe this will

help provide a smoother application process for those seeking tax exemption” (IR-

2020-25). She added: “As we’ve seen with the 1023-EZ, we believe this change

will help with application processing time and help with our wider efforts to

improve our work with the tax-exempt community.” [26.1(a)] ◆

TIGTA RIPS IRS OVER OSTENSIBLE FORM

8976 MISMANAGEMENT; IRS REJOINS

The Treasury Inspector General for Tax Administration blasted the IRS for failing

to penalize thousands of social welfare organizations and their officials because

of notice (Form 8976) violations (2020-10-001). TIGTA reported that the IRS “has

not taken sufficient actions to identify” these noncompliant entities, “despite

having various sources of information that would allow the agency to do so.”

TIGTA’s statistics are admittedly compelling, although it is hard to see how the

IRS, with its limited resources, can possibly fully enforce and penalize with respect

to this notice regime.

Violations

TIGTA identified 9,774 social welfare organizations that were potentially

required to file a Form 8976 but did not. These organizations were potentially

subject to assessment of delinquency penalties totaling more than $48.4 million. © 2020 Wiley Periodicals, Inc.

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wileyonlinelibrary.com/journal/npc

DOI:10.1002/npc

Analysis of current developments in tax

and related law for nonprofit organiza-

tions and their professional advisors.

Volume 37 Number 4

April 2020

Also in This issue...

Charity Ruled Engaged in

Campaign Activity by Operation

of Subsidiary 3

IRS Issues Guidance as to

Charitable Giving of Virtual

Currency 4

Conservation Easement Litigation 5

Commerciality Doctrine Corner 6

CRS Publishes History of the

Charitable Deduction 6

Self-Dealing Sanctions:

Pigouvian Taxes? 6

Catching Up 7

Other Developments 7