Updated: February 12, 2022
February 11, 2022
Candace J. Dixon
Here are some IRS updates for charities and non-profits for January-February 2022.
Electronic Filing of Form 1024 Is Mandatory
The IRS issued the revised Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code to allow electronic filing as part of ongoing efforts to improve service.
Beginning January 3, 2022, applications for recognition of exemption on Form 1024 must be submitted electronically online. While there is a 90-day grace period where paper submissions of Form 1024 and letter applications will still be accepted, Form 1024 must be submitted electronically after April 4.
Applications for recognition of exemption can no longer be submitted as letter applications. Section 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), (29) and 501(d) requests must be made electronically with Form 1024.
Section 501(c) (other than 501(c)(3) and (c)(4)) and 501(d) organizations applying for tax-exempt status must submit Form 1024 electronically.
Section 501(c)(3) charitable, religious and educational organizations must submit Form 1023 or Form 1023-EZ electronically.
Section 501(c)(4) social welfare organizations must submit Form 1024 electronically instead of Form 1028.
See the IRS News Release for more details.
Annual Revenue Procedures Were Published
These 5 annual revenue procedures relating to Exempt Organizations were published in Internal Revenue Bulletin 2022-1 released January 3, 2022:
Rev Proc 2022-1 Updates Letter Rulings, Information Letters, and Determination Letters
Rev Proc 2022-2 Updates Technical Advice
Rev Proc 2022-4 Updates Determination Letters and Letter Rulings for Tax-exempt and Government Entities, Employee Plans
Re Proc 2022-5 Updates Exempt Organizations Determination Letters
Rev Proc 2022-7 Updates International Areas Where Rulings Will Not Be Issued
Issue Snapshot for Private Foundations on the Treatment of Qualifying Distributions IRC 4942(h)
Private foundations are required to spend a certain amount of money for charitable purposes annually, including grants to other charitable organizations.
The amount is determined by calculating the distributable amount:
The distributable amount is equal to the minimum investment return with certain adjustments.
This amount must be distributed as a qualifying distribution, and the Issue Snapshot explains how to determine the treatment and ordering of these distributions.
Issue Snapshots are IRS employee job aids that provide analysis and resources for given technical tax issues.
Online Training & Workshops
The Can I Deduct My Charitable Contributions course explains the types of contributions that are deductible, which records to keep, and how to report deductible contributions for when donors ask about contribution deductibility.
Both leaders and volunteers should do the Tax-Exempt Organization Workshop for important information on the benefits, limitations and expectations of tax-exempt organizations.
Sources & Resources:
IRS EO Update: e-News for Charities & Nonprofits January 18, 2022