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All Exempt Applications Go Digital

Organizations seeking tax-exempt status will have to file applications electronically starting this year.

The Internal Revenue Service (IRS) announced Jan. 3 that Form 1024 applications must be submitted electronically, with a 90-day grace period that will allow acceptance of paper versions of the form and letter applications.

“Electronic filing makes it easier to complete an application for tax-exempt status while reducing errors,” IRS Tax Exempt and Government Entities (TE/GE) Division Commissioner Sunita Lough said via a statement. “Electronic filing also shortens IRS processing time so applicants won’t wait as long for a response.”

Organizations requesting determinations under Section 521 are now also able to use the electronic Form 1024 instead of Form 1028, which farmers’ cooperatives were allowed to use to apply for recognition of exempt status.

The fee for Form 1024 will remain $600 for 2022. Applicants can pay directly from a bank account or by credit or debit card through www.pay.gov when submitting the form.

The IRS revised Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code to allow electronic filing. Applications for recongition of exemption under Sections 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), (29) and 501(d) can no longer be submitted as letter applications but instead requests must be made via electronic Form 1024.

Organizations must electronically file Form 1024 to apply for recognition of exemption under section 501(a) for being described in section 501(c) (other than section 501(c)(3) or (4)) or section 501 (d), religious or apostolic associations or corporations with a common or community treasury.

Section 501(c)(3) nonprofits organizations must continue to use Form 1023 or Form 1023-EZ and Section (c)(4) social welfare organizations must continue to use Form 1024-A.

The IRS encourages organizations to subscribe to the Exempt Organizations Update for updates on forms and other exempt organization news.

As we celebrate our 36th year, NPT remains dedicated to supplying breaking news, in-depth reporting, and special issue coverage to help nonprofit executives run their organizations more effectively.


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