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December 14, 2021
2021-2243

Electronic version of Form 1024 coming in early 2022, IRS official reports

The IRS plans to make available in early 2022 an electronic version of Form 1024, Application for Recognition of Exemption Under Section 501(a), according to IRS Exempt Organizations and Government Entities Director Robert Malone.

Speaking at the American Institute of CPAs' Exempt Organizations Tax Technical Resource Panel on December 9, 2021, Malone reported that electronic filing of Form 1024 will be required once the electronic version is available, and letter requests will no longer be accepted for those organizations seeking classification under IRC Section 501(c)(11), (c)(14), (c)(16), (c)(18), (c)(21), (c)(23), (c)(26), (c)(27), (c)(28), (c)(29) or under IRC Section 501(d). There will be a 90-day grace period after the electronic Form 1024 is available during which the IRS will continue to accept paper filings.

Entities seeking IRS recognition of tax-exempt status under IRC Section 501(c)(3) should submit to the IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, while those seeking IRS recognition of exemption under other 501(c) categories must submit Form 1024. Malone noted that entities seeking exemption as farmers' cooperatives under IRC Section 521 will also submit the electronic Form 1024 in lieu of current Form 1028.

The IRS has hired 17 additional agents to process exemption applications and complete other determinations work, and has also pulled some personnel from examinations to assist, Malone reported.

Furthermore, Malone said the IRS plans to launch electronic filing in 2022 for Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds, and Form 5227, Split-Interest Trust Information Return.

Implications

The IRS continues to enhance e-file capabilities following the Taxpayer First Act's e-filing mandate.

Tax-exempt organizations should continue to assess their electronic filing capabilities and determine whether they have proper safeguards in place to file certain IRS applications and returns, and complete electronic payments for any tax liabilities due.

Please contact your EY tax professional with any questions and for EY's recent Tax Alert on the revisions made to Form 1024, including the electronic submission process, e-file transition period, and user fee updates.

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Contact Information
For additional information concerning this Alert, please contact:
 
Tax-Exempt Organization Services
   • Steve Clarke (stephen.clarke@ey.com)
   • Melanie McPeak (melanie.mcpeak@ey.com)
   • Morgan Moran (morgan.moran@ey.com)
   • Tiyesha Johnson (Tiyesha.Johnson@ey.com)
 

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