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Part 21. Customer Account Services

Chapter 3. Taxpayer Contacts

Section 8. Tax Exempt/Government Entities (TE/GE) Customer Account Services (CAS) Telephone Operations (Cont. 3)

21.3.8  Tax Exempt/Government Entities (TE/GE) Customer Account Services (CAS) Telephone Operations (Cont. 3)

21.3.8.12 
Exempt Organizations (EO)

21.3.8.12.10  (10-01-2008)
Insubstantial Benefits

  1. Insubstantial goods or services which a charitable organization provides in exchange for contributions do not have to be acknowledged as quid pro quo. Goods and services are considered to be insubstantial if the payment occurs in the context of a fund-raising campaign in which a charitable organization informs the donor of the amount of the contribution that is a deductible contribution, and:

    1. The fair market value of the benefits received does not exceed the lesser of $91 or 2 percent of the payment, or

    2. The payment is at least $45.50, the only items provided bear the organization’s name or logo, and the cost of these items is within the limits for " low-cost articles" , currently $9.10 or less.

      Note:

      These values are subject to annual adjustments. The current values are established in Rev. Proc. 2007-66.

  2. For additional information, refer the caller to the following publications:

    • Publication 526, Charitable Contributions

    • Publication 1771, Charitable Contributions-Substantiation and Disclosure Requirements

21.3.8.12.11  (10-01-2006)
Preferred Postal Rates

  1. Section 134.5 of the United States Postal Service Regulations, 39 U.S.C. 3626-27 (1970) details organizations that qualify for preferred postal rates. If the caller wants additional information on this topic, direct him/her to contact the United States Postal Service.

21.3.8.12.12  (10-01-2007)
Pub. 78 - Cumulative List of Organizations

  1. The Cumulative List (CL) of Organizations described in IRC Section 170(c) of 1986, commonly known as Publication 78, is a computer–generated listing of names of organizations. These organizations have been determined to be entitled to receive tax deductible contributions by donors as provided in IRC 170.

  2. The CL provides information and guidance on exempt organizations to both Service personnel and the public. With few exceptions, the CL includes only those organizations that hold a ruling or determination letter that specifically states that contributions to the organization are tax deductible.

  3. Exempt organizations have become increasingly dependent upon their listings in the CL to prove to potential contributors that contributions to them are deductible. The fact that an organization may hold a favorable determination letter is often not sufficient to satisfy some contributors, especially in those cases where the Service issued an organization's letter several years ago.

  4. Generally, the CL has been effective in identifying IRC 170 organizations. However, as with any computer-generated listing, it is only as good as the data extracted. Therefore, it is imperative that the EO entity data contained on the BMF be accurate. Initiate corrections to any errors identified on the Master File; see IRM 21.3.8.3.8(1)c..

  5. "About This Book" on the inside cover and the "Preface" of the CL provide an explanation of the contents, format, etc. and provide procedures for inquirers to request changes.

    1. The Government Printing Office (GPO) prints and distributes the complete CL to thousands of subscribers and IRS offices every year.

    2. Quarterly cumulative supplements to the CL are extracted in December, March and June and contain new additions and name changes. Other changes are reflected in the complete annual report extracted at the end of September.

    Note:

    The CL may also be researched on the IRS Web Site.

  6. Information on ordering Publication 78 can be found on the TE/GE Research Portal (IRS Toll Free Numbers) and on the Charities and Non-Profits page of the IRS Web site.

  7. See IRM 7.25.1.1.1, Exempt Organizations Determinations Manual - Introduction, Cumulative List (Publication 78), for additional information.

21.3.8.12.12.1  (05-23-2008)
Pub. 78 Omissions (Service Error / Non-Service Error)

  1. Do not refer a customer directly to Headquarters employees for issues relating to Pub 78 under any circumstances.

  2. Omissions to Pub. 78 may be due to a Service error or an error on the part of the organization. When contact is received regarding an organization’s omission from Pub. 78, consider the following questions:

    1. Should the organization actually be listed in Pub. 78? Pub. 78 not only contains a list of organizations described in IRC Section 170(c), it also contains the names of some well known religious denominations, even though these denominations do not have a group ruling. Many of their member churches may not have obtained individual exemption rulings (e.g., Greek Orthodox Archdiocese of N. and S. America and Affiliated Organizations). Similarly, local components or chapters of the Salvation Army and the American National Red Cross generally have not obtained individual exemption rulings, but Pub. 78 contains generic listings for "Salvation Army and Its Components" and "American National Red Cross and Its Constituent Chapters and Branches." There are specific C letters which may be sent to local chapters of the Salvation Army ( Letter 4206C) and the American National Red Cross ( Letter 4205C).

      Note:

      Subordinates in a group ruling are generally not listed in Pub. 78.

    2. Is the determination relatively recent?

    3. Has the organization received a letter of exemption?

    4. Is it an organization to which contributions are considered deductible under IRC section 170?

    5. What EO information is found on the Master File (MF)?

    6. Is there an indication the omission from Pub. 78 is the result of the organization’s failure to do something? (For example, status 20, 21, 32; no application filed; application closed FTE; failure to file returns/respond to notices.) If so, take the appropriate action to resolve that issue.

  3. When it’s a Service Error:

    1. Various Service errors may prevent an organization from posting to Pub. 78. Each omission must be considered on a case–by–case basis.

    2. The most prevalent Service error is when a determination case was closed favorably on EDS/TEDS, but the record did not roll to MF.

    3. If the omission was due to a Service Error, take the following steps:

      Step Action
      1 Advise the caller that the organization will be added to the addendum within 30 days as an interim until its information can be added to the master listing.
      2 Take the appropriate steps to make sure the MF record is updated. See IRM 21.3.8.3.8, "Perfection of Entity/EO Submodule Information on the Master File."
      3 Once MF has been corrected:
      1- Open/close a control base on ENMOD with the notation "PUB78ADD."
      2- Send an e-mail to your lead with the subject line "ADD TO PUB 78 ADDENDUM DUE TO SERVICE ERROR." In the body of the e-mail, provide the name of the organization, the city and state of its AOR, and the month and year of its ARED, if applicable. DO NOT INCLUDE THE ORGANIZATION'S EIN.
      The lead will forward the e-mail to the TE/GE Adjustments Unit.

  4. The addendum listing may be viewed at the IRS Web Site at http://www.irs.gov/charities/article/0,,id=96291,00.html.

  5. When it’s a Non-Service Error:

    1. If the omission was due to a non-Service error, the organization may be added to the next Pub. 78 quarterly master update.

    2. If the organization failed to respond to a notice, or did not provide us with a current address and was placed in status 21, it will not be added to the Pub. 78 addendum unless a Service error has occurred. In this situation, the normal process must be followed, which will involve manually updating Master File, which in turn allows the organization to appear in the next quarterly extract.

    3. Consider normal cycle times when determining whether to add an organization to the Pub 78 addendum. The on-line information is updated quarterly, October, January, April, and July, usually the first week of the month.

    4. All transactions must be posted in order for the organization to be picked up in the Pub. 78 extract. Manual input transactions take roughly 2 cycles to post. Normally, EDS/TEDS roll-overs take 1 cycle to post. The 1 cycle time-frame for EDS/TEDS closures is based on the date the data is rolled off EDS/TEDS and not the case closed date. The actual "roll" date can be determined from the date indicated on the EDS/TEDS case history screen (F6), which reflects the action "MF Cls Posted."

    5. If a case is closed on EDS/TEDS, or if a manual transaction is entered too late to make the cycle cutoff, the organization will not appear in the on-line Pub. 78 until the following quarter’s extract. This is normal processing and does not constitute Service error.

21.3.8.12.13  (10-01-2007)
On line (Exempt Organization Master File (EOMF), " 50 State List"

  1. The on line Exempt Organizations Master File (EOMF) is a publicly-available segment of IDRS data on the Charities & Non-Profits page of irs.gov. Callers can access it by typing "Master File" in the search window.

  2. The on line EOMF shows certain information about exempt organizations in statuses 01, 02, 23, 24, 25 and 32. It is extracted/updated monthly. If an organization has had any Master File changes after the data was extracted from IDRS, the new information will not be reflected in the on line EOMF until the following update. The on line EOMF is accompanied by instruction files that define the fields and explain the codes used for the organizations contained in the extract.

  3. Many grantors rely on the information contained in the on line EOMF to determine the eligibility of their applicants. The IRS cannot control how grantors and contributors use these data. It is not a Service error if an organization fails to receive a grant because it is not included in the on line EOMF, or because some of the information contained therein is out-of-date. Possession of a valid determination letter is the ultimate legal proof of tax exempt status.

    Note:

    Section 3.01 of Notice 2006–109 provides, in part, that "[u]ntil further guidance is issued, for purposes of sections 4942, 4945, and 4946 (as applicable) a grantor, acting in good faith, may rely on information from the IRS Business Master File ("BMF" ) or the grantee's current IRS letter recognizing the grantee as exempt from federal income tax and indicating the grantee's public charity classification in determining whether the grantee is a public charity under section 509(a)(1), (2), or (3)." Section 3.01 of Notice 2006–109 has separate requirements for grantors to determine whether a grantee is a Type I, Type II, or functionally integrated Type III supporting organization.

  4. Do not refer a customer directly to Headquarters employees for issues relating to the online EOMF and/or Pub 78 under any circumstances.

  5. When a customer calls due to omission from online EOMF:

    1. Research the Master File to verify whether INOLES reflects an EO submodule.

      IF THEN
      INOLES reflects an EO submodule Skip to c) below
      INOLES reflects no EO submodule Continue to b) below

    2. Research EDS/TEDS to determine whether there is a closed case reflecting favorable exempt recognition.

      IF THEN
      There is a favorable exemption ruling on EDS/TEDS that did not "roll" to the Master File
      1. Confirm exempt recognition with the customer.
      2. Apologize to the customer for "Service Error" .
      3. Advise customer the online information is updated monthly, and due to processing time it may take up to 2 months for the organization to be reflected on the list.
      4. Offer an affirmation letter.
      5. See IRM 21.3.8.3.8(1)c, for guidance on correcting the EO submodule.
      There is no favorable exemption ruling on EDS/TEDS 1. Verify disclosure and respond to the customer appropriately (such as, "there is no record…" ).

    3. Verify the EO submodule on INOLES reflects favorable tax exempt status.

      IF THEN
      The status code reflects "favorable EO status" 1. Confirm that our records currently reflect exempt recognition.
      2. Advise customer it is possible the account was updated after the current data was posted on the Web, or the grantor may not be using the most current data.
      3. Advise customer the online information is updated monthly, so if their information does not currently appear, due to processing time, it may take up to 2 months for the organization to be reflected on the list.
      4. Offer an affirmation letter.
      The status code reflects other than "favorable EO status " (such as status 20/21, 71, etc.) 1. Verify disclosure and respond to the customer appropriately.
      2. If caller is authorized, also address any other outstanding issues (old ARED, address, etc.)

21.3.8.12.14  (05-17-2007)
Group Rulings

  1. The following sections deal with information related to group rulings.

  2. The procedure for applying for a group ruling is outlined in Rev. Proc. 80–27(modified in Rev. Proc. 96–40).

  3. Additional information can be found in Publication 557 and Publication 4573.

21.3.8.12.14.1  (02-12-2008)
Central Organizations

  1. An organization that has one or more subordinates under its general supervision or control is referred to as a central organization.

  2. The central organization has a separate EIN and is identified by an Affiliation Code 6 (central organization of a group ruling - not a church) or 8 (central organization of a church group ruling).

  3. The central organization of the group receives the exemption ruling and members or subordinates of the group are included as the central organization determines their eligibility. Frequently, subordinate entities and the central organization have the same name, identified by the presence of a chapter name or local number. The subordinate is identified by an Affiliation Code of 7 or 9 on CC INOLES.

    Note:

    The central organization is responsible for providing written affirmation to the requester/donor of the inclusion of a subordinate in its group ruling. TE/GE telephone assistors cannot issue any affirmation letters on behalf of subordinates, although they may verbally affirm an exemption shown on IDRS. You may also refer callers to Publication 4573, Group Exemptions, for information about verifying whether an organization is included in a group ruling.

  4. A central organization files one Form 990 for itself based on the income and expenses of only the central organization. It may also file a separate group return for its subordinates that includes all of the income and expenses for its affiliates that elect to be included on a group return. See IRM 21.3.8.12.14.6, "Group Returns," for more information on group returns.

    Note:

    Subordinate organizations whose income is not reported on a group return must file their own Form 990/990-EZ (or Form 990-N) unless they meet a filing exception.

  5. A central organization need not be tax exempt under the same subsection as its subordinates; however, all subordinates in a group ruling must be tax exempt under the same subsection.

21.3.8.12.14.2  (01-28-2008)
Subordinate Organizations

  1. A chapter, local, post, or unit of a central organization is referred to as a subordinate organization.

  2. A subordinate is identified on Master File by:

    1. Affiliation Code 7, intermediate central organization — subordinate by state; or

    2. Affiliation Code 9, subordinate of a group ruling.

  3. A subordinate may choose to file as part of a group return or may file a separate return.

  4. Every year, each subordinate must authorize the central organization in writing to include it in the group return

  5. A subordinate that is organized and operated in a foreign country may not be included in a group exemption.

  6. Subordinate organizations are generally not listed in Publication 78, Cumulative List of Organizations . Additionally, an organization may be included as a subordinate in a group ruling even though neither IDRS nor the online EOMF reflects that fact. See IRM 21.3.8.5.1.3.1, "Verification of Tax Exempt Status and Foundation Classification, " when responding to exemption verification calls about an organization that could be included in a group ruling.

  7. Subordinate organizations need not be tax exempt under the same subsection as their central organization; however, all subordinates in a group ruling must be tax exempt under the same subsection.

  8. Private foundations may not be included as subordinates in a group ruling.

21.3.8.12.14.3  (10-01-2008)
Supplemental Group Ruling Information (SGRI)

  1. To maintain a group exemption letter, central organizations (except churches) are required to provide an annual listing of their subordinates to OSPC. To assist with this process, an annual "List of Parent and Subsidiary Accounts" is sent to the central organization six months prior to the end of the central organization's accounting period. A suspense copy of this listing is maintained in the Entity Control unit at OSPC for one year.

  2. This list contains the EIN, name, address, group exemption number and filing requirement of the central organization and the EIN, name, address, filing requirement and status (active or inactive) of each subordinate. The list must also state whether any subordinates have changed their name or address, whether any subordinates are no longer included in the group exemption letter, and whether any subordinates are to be added to the group exemption letter.

  3. All organizations that have received a group ruling must submit their SGRI listing to the OSPC at least 90 days before the end of their accounting period. See Publication 1162, Group Exemption Procedures.

  4. Once a reply is received, any account identified for correction by the central organization is updated.

  5. If the organization doesn't respond, its group ruling is dissolved (Status 29).

    Note:

    Only Ogden has the authority to take an organization out of Status 29. Impacted central organizations should send the request for reinstatement to:
    IRS
    Attn. EO Entity
    Mail Stop 6273
    Ogden, UT 84201

    or

    Fax: 801-620-3263 or 801–620–3249

  6. See IRM 21.3.8.12.14.5, "Adding Subordinates to a GEN," if a central organization wishes to add a subordinate to its exemption after submitting its annual listing.

21.3.8.12.14.4  (12-18-2007)
Church SGRI Submissions

  1. Currently, a central church (AFFLTN-CD 8) with a group ruling is neither issued nor required to supply an annual SGRI. However, if a central church organization submits its own listing to OSPC, subordinates’ accounts will be established/corrected on Master File as long as the central organization provides complete information. See IRM 21.3.8.12.14.5, Adding Subordinates to a GEN.

  2. The following guidelines are used by OSPC when updating SGRI's for church- affiliated accounts (see IRM 3.13.12):

    1. Make changes to the central organization's entity as indicated by the SGRI.

    2. If a name change to a subordinate is indicated by the SGRI, research to determine if the subordinate is established on the BMF. If the subordinate is on the BMF, make the necessary changes. If the subordinate is not on the BMF, take no action.

  3. After all changes have been made, OSPC issues a 3064C letter, IDRS Special Letter, to the central organization indicating that our records have been changed, and because the organization is a church, it is not required to submit a Parent and Subsidiary Account listing in the future.

  4. See IRM 21.3.8.12.14.5, "Adding Subordinates to a GEN," if a central church organization wishes to add a subordinate to its group ruling independent of submitting its annual listing.

21.3.8.12.14.5  (10-01-2008)
Adding Subordinates to a GEN

  1. If the caller requests information about the process for adding subordinates to a group ruling, explain that a central organization may choose, at any time, to add a subordinate to its group exemption. In order to add a subordinate, the central organization must fax or mail a letter to the IRS on the central organization’s letterhead stating its desire to have the subordinate added. The letter must include the following:

    1. Central organization’s four-digit GEN

    2. Subordinate’s name, address and EIN

    3. Signature of an authorized central organization officer (or local Cooperative Extension Service for 4-H Clubs)

    4. The effective date for the subordinates' inclusion in the group ruling

      Note:

      Central organizations should also supply the information listed above to "reinstate" subordinate organizations that are not showing status 01 on IDRS.

  2. Send the request to add one or more subordinates to:
    IRS
    Attn. EO Entity
    Mail Stop 6273
    Ogden, UT 84201

    or

    Fax: 801-620-3263 or 801–620–3249

  3. Exceptions for adding subordinates:

    1. Salvation Army - If the name reflects a chapter of the Salvation Army, prepare Letter 4206C (Salvation Army Letter). Do not add an EO submodule to the " subordinate" .

      Note:

      If the caller is requesting verbal affirmation of the exemption of a Salvation Army unit and does not have the entity's EIN, it may not be necessary to identify the specific entity on IDRS. Explain to the caller that all components of the Salvation Army are included in their special ruling.

    2. American National Red Cross - If the name reflects a chapter of the American National Red Cross, prepare Letter 4205C (Red Cross Letter). Do not add an EO submodule to the "subordinate" .

      Note:

      If the caller is requesting verbal affirmation of the exemption of an American National Red Cross unit and does not have the entity's EIN, it may not be necessary to identify the specific entity on IDRS. Explain to the caller that all components of the American National Red Cross are included in their special ruling.

  4. If a call is received from the subordinate organization itself (and IDRS does not reflect that it is included in the group ruling), instruct the caller to contact the central organization about inclusion in the group ruling.

    Note:

    Central organizations are not obligated to include all of the organizations that are affiliated with it simply because it holds a group ruling. If the central organization is unwilling to include an affiliate in its group exemption, the affiliate must apply for its own exemption if it wants a formal ruling of tax exempt status.

  5. If a call is received from a subordinate organization that has undergone a name change, instruct the caller to mail the appropriate name change documentation directly to EO Entity in Ogden. For additional information on required documentation, refer to IRM 21.3.8.9.2.

  6. If a call is received from a subordinate organization that has undergone an address change and you are unable to make the adjustment to IDRS yourself (e.g., because the caller is not authorized or because the caller cannot cite the AOR), instruct the caller to mail the information directly to EO Entity in Ogden. The correct mailing address for EO Entity is:

    Internal Revenue Service
    EO Entity Mail Stop 6273
    Ogden, UT 84201

  7. The information may also be faxed to 801-620-3263 or 801–620–3249.

  8. Based on the information provided, EO Entity makes the necessary updates to IDRS within 30 days of receipt, but no letter will be issued to either the central organization or to the subordinate(s).

    Note:

    If the caller needs to submit a Form 990-N, but wants to wait until it is showing as a subordinate on IDRS, advise the caller to allow 45 days from the date the central organization has notified EO Entity before attempting to submit its Form 990-N.

  9. Advise subordinate to inform the central organization of its name and/or address change, if it has not already done so. See IRM 21.3.8.9.2, "Name Changes - EO."

  10. The central organization is responsible for providing written affirmation of the inclusion of a subordinate in its group ruling. TE/GE telephone assistors cannot issue any affirmation letters on behalf of subordinates, although they may verbally affirm an exemption shown on IDRS. You may also refer callers to Publication 4573, Group Exemptions, for information on how to verify whether an organization is included in a group ruling.

    Reminder:

    You should not attempt to determine whether a particular organization should be included in a group ruling if it is not showing as such on IDRS, nor should you attempt to determine potential central organizations with which an organization could be affiliated.

21.3.8.12.14.6  (10-31-2007)
Group Returns

  1. A central organization files one Form 990 for itself based on the income and expenses of only the central organization. It may also file a separate group return for two or more of its subordinates that includes all of the income and expenses for its affiliates that elect to be included on a group return.

  2. Group returns may only be filed on Form 990, not on Form 990-EZ.

  3. Only subordinates that are on the same accounting period as the central organization and which are under its general supervision or control may be included in the group return.

  4. Every year, each eligible subordinate must authorize the central organization in writing to include it in the group return and must declare, under penalty of perjury, that the authorization and the information it submits to be included in the group return are true and complete.

  5. If the group return is filed on behalf of only some of the subordinates, the central organization must attach to the group return a list showing the name, address, and EIN of each affiliated organization included in the group return. You can determine whether the group return contains financial information for all or for some of the subordinates by researching Record 1 (R1) of BRTVU under the group return's EIN. If the GROUP RETURN CD is 7, then all of the subordinates are included; if the GROUP RETURN CD is 8, then only some of the subordinates are included.

  6. A group return entity has its own EIN, which is a dummy EIN used to file the group return. The group return entity is identified by a Form 990 filing requirement of 03 and the words "group return" added to the organization’s name.

  7. Subordinates whose information was included in a group return show a TC 590 and closing code 14 on TXMOD/BMFOLT. The TC 590 should also reflect an X-REF EIN which is the EIN of the group return. Additionally, INOLES for an included subordinate will generally reflect a PR X-REF EIN.

  8. Subordinates whose information is included in a group return are not required to file the Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required To File Form 990 or 990-EZ. See IRM 21.3.8.12.24, Annual Electronic Notice Filing Requirement, Form 990-N.

21.3.8.12.15  (10-01-2008)
IRS Grant Program for Low Income Taxpayer Clinics (LITC)

  1. The LITC Grant Program awards matching funds of up to $100,000 per year to qualifying organizations that represent low income taxpayers involved in controversies with the Internal Revenue Service (IRS) or that provide tax education and outreach to taxpayers who speak English as a second language (ESL) on their taxpayer rights and responsibilities. Qualifying clinics may not charge more than a nominal fee for their services. Publication 4134, Low Income Taxpayer Clinic List , provides contact information for each clinic, including an indication of the language(s) served.

  2. The Taxpayer Advocate Service administers the LITC Program. Publication 3319, Low-Income Taxpayer Clinics Grant Application Package Book, is updated annually and outlines the requirements for the operation of a qualifying LITC program and provides instructions on how to apply for a low income taxpayer grant. Those requesting additional information on the LITC Grant Program can send an e-mail to LITCProgramOffice@irs.gov, or they can write to the IRS, LITC Program Office at the following address:

     
    Internal Revenue Service
    Taxpayer Advocate Service
    LITC Program Office
    TA:LITC
    1111 Constitution Ave., NW
    Room 1034
    Washington, DC 20224

21.3.8.12.16  (10-01-2008)
E-File for Exempt Organizations

  1. The following exempt organization returns can be filed electronically through an approved IRS 990 e-file provider:

    • Form 990

    • Form 990-EZ

    • Form 990-PF

    • Form 8868

    • Form 1120-POL

    • Form 7004

      Note:

      Many states also allow exempt organizations to file their returns with them through this program.

    Exception:

    Organizations may submit their Form 990-N directly via the IRS Web site and do not need to go through an e-file provider.

  2. Updated information about which forms, tax years, attachments and schedules are acceptable for (and those excluded from) e-filing can be found in Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters and on the IRS Web site under the "General Information" heading on the page titled Current User Guides and Publications.

    Note:

    This publication is only available online.

  3. Current approved IRS e-file providers are listed on www.irs.gov. Advise callers to click on the e-file logo at the bottom left of the home page.

  4. A Web page on irs.gov provides transmitters with updated operational status information for MeF users. The page provides updates when there is a change that impacts transmitters for more than an hour during peak. Information on the normal maintenance window is also available on this page. Transmitters who encounter problems can check the Web status by typing " e-file status" in the search window.

  5. While all charities and non-profits are encouraged to take advantage of the many benefits of electronic filing, certain exempt organizations are required to file their return electronically. For tax years ending on or after December 31, 2006, exempt organizations with $10 million or more in total assets are required to file their return electronically if they also file at least 250 returns in a calendar year, including income, excise, employment tax, and information returns, e.g. Forms 941, Forms W-2, Forms 1098.

    Note:

    For any fiscal period for which an organization is required to file its return electronically, the filing requirement is not satisfied by the posting of a paper return, which is not considered a valid return for that period. Electronically-filed EO returns can be identified by DLNs that begin with 93/92/88. Be sure to check the DLN of posted returns before telling an organization with an electronic filing requirement that its filing requirement has been satisfied.

  6. Private foundations and non-exempt charitable trusts that are treated as private foundations are required to file Forms 990-PF electronically, regardless of their assets, if they file at least 250 returns annually.

    Note:

    For any fiscal period for which an organization is required to file its return electronically, the filing requirement is not satisfied by the posting of a paper return, which is not considered a valid return for that period. Electronically-filed EO returns can be identified by DLNs that begin with 93/92/88. Be sure to check the DLN of posted returns before telling an organization with an electronic filing requirement that its filing requirement has been satisfied.

  7. Notice 2005-88 establishes criteria under which exempt organizations can request a waiver from the electronic filing requirement:

    • Where the exempt organization cannot meet electronic filing requirements due to technology constraints; or

    • Where compliance with the requirements would result in undue financial burden on the filer.

  8. Waiver requests are processed by the Ogden Campus (Internal Revenue Service, MS 1057, Ogden, UT 84201; fax number 801-620-7622). Organizations that request a waiver of the requirement to file their returns electronically will receive Letter 4069C from the e-Help Desk informing them whether their request was granted or not. If the request is denied, the letter will explain why. If the request is granted, the approval applies only to the tax period requested in the waiver.

  9. Two TC 971 Action Codes indicate whether the waiver request was approved (AC 322) or denied (AC 323). These codes will be displayed on TXMOD and BMFOLT for the period for which the waiver was requested.

  10. Direct callers with questions about the waiver, or who are having problems e-filing their return, to the e-File Help Desk at (866)255-0654.

    Note:

    TE/GE telephone assistors must address EO tax law issues such as filing requirement mismatches, wrong EINs, etc. If the organization does not have an EO submodule and valid Form 990 or Form 990-PF filing requirements, it will not be able to file an EO return electronically until it has filed its initial return on paper.

21.3.8.12.17  (05-23-2008)
Failed to Establish - Additional Information Letter (1312/1313) Requests and Lost Response to Additional Information Requests on " I" and "S" Cases Closed 11 or 12

  1. If an EO determination application ("I" or "S" case) does not contain all of the required information to process the application, a letter is mailed to the organization requesting the needed information. If the organization does not respond to the request, the case is closed as Failed to Establish (FTE). The EDS/TEDS closing status for FTE cases is either 11 (FTE) or 12 (Other).

    Note:

    Most FTE cases are closed using status 11 on EDS/TEDS. However, if the organization already has exemption (i.e., covered under a group ruling or under another 501(c) section), or is a church, the case is closed as status 12.

  2. Refer to the table below to handle a customer's request when the customer states he/she did respond to our request and the case was never reopened as an "S" case on EDS/TEDS, or if he/she did not receive the letter requesting additional information:

    IF AND THEN
    Customer states he/she did not receive an Additional Information Letter The FTE case was closed more than one year prior to the customer contact 1. Advise the customer that since we do not show a record of a timely response to a request for additional information, a new application with a new user fee needs to be submitted.
    2. Prepare Letter 4188C (FTE Letter) as appropriate.
    Customer states he/she did not receive an Additional Information Letter The FTE case was closed more than 100 days but less than one year prior to the customer contact 1. Advise the customer that since we do not show a record of a timely response to a request for additional information, a new user fee needs to be submitted with the requested information.
    2. Prepare a Form 4442 referral with the customer's name, title and telephone number.
    3. Annotate: "Customer needs copy of letter prior to Status 11 (or 12)" .
    4. Run an EDS/TEDS print showing FTE Status 11 or 12.
    5. Advise the customer the case file will have to be researched. Also advise he/she will be contacted within 30 days.
    6. Fax the referral and the research to the Correspondence Unit at 513-263-3780 using local procedures.
    Customer states he/she did not receive an Additional Information Letter The FTE case was closed less than 100 days prior to the customer contact 1. Prepare a Form 4442 referral with the customer's name, title and telephone number.
    2. Annotate: "Customer needs copy of letter prior to Status 11 (or 12)" .
    3. Run an EDS/TEDS print showing FTE Status 11 or 12.
    4. Advise the customer the case file will have to be researched. Also advise he/she will be contacted within 30 days.
    4. Fax the referral and the research to the Correspondence Unit at 513-263-3780 using local procedures. See IRM 21.3.8.11.3, " User Fee Extensions," if applicable.
    Customer states he/she replied to request and case was not reopened It has been less than 30 days since the additional information was submitted Inform caller that it generally takes up to 30 days to re-establish the case.
    Customer states he/she replied to request and case was not reopened It has been more than 30 days since the additional information was submitted Instruct the caller to fax the requested information (and a request to extend the user fee date, if applicable) to the TE/GE Adjustments Unit at 513-263-4330. Tell the caller to notate "2nd Response to FTE" on the cover sheet.

  3. If an FTE case is reopened before the 90-day user fee date (plus any extensions) has expired, a new user fee is not required (unless the previous fee was returned "insufficient funds" or the organization did not originally submit the entire fee).

  4. If an FTE case is reopened, or a customer responds to an FTE case with a new application after the 90-day user fee date (plus any extensions) has expired, a new user fee is normally required unless Service error is established.

  5. Customers submitting a response with previously requested information, or a complete application after the 90-day user fee date has expired, must also submit a new user fee. If the customer believes Service error prevented timely reopening of the case:

    1. Customer can request a waiver/refund of the additional user fee paid.

    2. Customer needs to demonstrate the information was previously submitted timely and the Service did not reopen the case.

    3. If the waiver request is granted due to Service error, the excess user fee paid will be refunded under a separate cover.

  6. Mail all responses to FTE cases to:

    Internal Revenue Service
    TE/GE Room 4024
    PO BOX 2508
    Cincinnati, OH 45201

  7. Cases closed FTE are held in the Records Unit for one year from the FTE date and are then shipped to the Federal Records Center for the prescribed period of retention.

21.3.8.12.18  (05-23-2008)
Requests for Previously-Issued EO Determination Letters

  1. TE/GE telephone assistors are not authorized to reprint any EO EDS/TEDS letter.

  2. If you have a request for a copy of a previously-issued determination letter, research IDRS to make sure the organization is in 01 status.

  3. If the entity is showing in 01 status on IDRS:

    1. Advise the caller you can prepare a letter that is not the original letter, but has a current date and affirms exempt recognition and the date of the original ruling.

    2. If the caller does not insist on having a copy of the original letter, prepare the appropriate affirmation letter.

    3. If the caller insists on having a copy of the original EDS/TEDS letter, advise the caller a written request must be submitted because a copy of the original letter will need to be retrieved from the original file. See IRM 21.3.8.3.4.1.3, "Exempt Applications for Rulings Prior to January 1, 1948," if the ruling date of the organization in question is older than January 1948.

      Note:

      The request may be on either Form 4506-A, Request for Public Inspection or Copy of Exempt Organization Tax Form, or in letter format.

    4. Advise the caller to submit the written request by fax or mail:
      FAX 513–263–4330
      OR mail

      Regular Postal Delivery
      Internal Revenue Service
      Room 4024
      P.O. Box 2508
      Cincinnati, OH 45201

      Express and Overnight Delivery
      Internal Revenue Service
      Room 4024
      550 Main Street
      Cincinnati, OH 45202

  4. If the organization does not currently show in 01 status on IDRS, but available research indicates that a formal ruling of exemption had been made at one time, inform caller that requests for copies of previously-issued determination letters must be made in writing and provide caller with the contact information given above.

  5. See IRM 21.3.8.5.1.4, " Inquiries Regarding Correspondence Controlled on TCC," for time frame information.

21.3.8.12.19  (10-01-2006)
Superseding EO EDS/TEDS Letters

  1. When a customer contacts us regarding an incorrect EO determination letter, explain that the request for a corrected letter must be in writing and must contain a clear description of the error.

  2. The customer should submit the written request by fax or mail:
    FAX 513-263-4330

    OR mail:

    Regular Postal Delivery
    Internal Revenue Service
    Room 4024
    P.O. Box 2508 Cincinnati, OH 45201

    Express and Overnight Delivery
    Internal Revenue Service
    Room 4024
    550 Main Street
    Cincinnati, OH 45202

  3. Advise caller it may take 60 days to receive a corrected letter.

    Note:

    If the caller indicates the only problem with the letter is a formatting error (for example, the margins are set improperly), research EDS/TEDS and/or IDRS to confirm the exemption and offer to prepare an affirmation letter so that the organization has proof of exemption while it is waiting for its corrected letter.

21.3.8.12.20  (02-12-2008)
Organizations That Undergo Changes in Entity Type/Legal Structure

  1. Formal tax exempt recognition from an organizational standpoint is based on the continued existence of the organizing document which was in effect at the time of the determination ruling.

  2. Amendments to the original organizing document which are consistent with the code section for which the determination was made do not adversely affect the tax exemption recognition. See IRM 21.3.8.12.5.3, "Changes in Activities and Private Letter Rulings."

  3. Amendments to the original organizing document which are not consistent with the code section for which the determination was made will cause the formal tax exempt recognition to end.

    Note:

    Administrative remedies can be made when the changes are reviewed and considered by a revenue agent working an exam (audit) or an amendment determination case which will not further jeopardize the tax exempt recognition.

  4. Changes in entity type result from the adoption of a new organizing document and cause the original tax exempt recognition to end (even if the new entity has the exact same purpose and conducts the same activities).

  5. Entity type changes always require a new determination application in order to establish formal tax exempt recognition. The following examples reflect changes which result in a new entity and which require a new application in order to be formally recognized as tax exempt:

    1. An unincorporated association becomes a corporation (incorporates).

    2. An organization incorporated in one state incorporates in another state.

    3. A corporation fails to comply with state rules (annual filings, reporting, etc.) and is administratively dissolved by the state; it subsequently re-establishes its corporate status with the state but with a later effective date than the original articles of incorporation under which the formal tax exempt recognition was made.

      Note:

      If a corporation is reinstated by the state after an administrative suspension or dissolution of its corporate charter retroactive to the date when its corporate charter was suspended or dissolved (i.e., with the same effective date as the initial filing of the articles of incorporation), the corporation's exempt status will be reinstated without the need for the corporation to reapply.

  6. When an entity with formal tax exempt recognition merges with another entity, the formal tax exempt recognition of the merging entity ends.

    1. If the surviving entity does not already have formal tax exempt recognition, it must file an application in order to establish formal tax exempt recognition.

    2. If the surviving entity already has formal tax exempt recognition, as long as the original organizing document for that entity has continual existence and all amendments are consistent with the code section for which the determination was made, no new application is required. See IRM 21.3.8.12.5.2, "Merger of Two or More Organizations. "

  7. Each state has provisions which allow an entity which is incorporated in one state to operate in another state as a "foreign corporation. " Being recognized by state law as a "foreign corporation " does not constitute a separate legal entity or a change in entity type.

    1. As long as the original corporation is maintained, no new application for recognition is required.

    2. This activity constitutes a material change which the entity would need to report to the Internal Revenue Service (Amendment "A" case).

  8. If a caller indicates that the organization has changed its entity type or has questions on this issue, refer the caller to Rev. Rul. 67-390.

  9. Organizations that change their entity type may also be required to apply for a new Employer Identification Number. Refer callers to Rev. Rul. 73-526 for information on this topic.

21.3.8.12.21  (10-01-2008)
Public Inspection Requirements for 501 and 527 Organizations

  1. Treasury Regulation 301.6104(d)-0 through 301.6104(d)-3 provides guidance for IRC 501 tax exempt organizations and IRC 527 political organizations to comply with IRC 6104 public disclosure requirements. The law requires these organizations to make their application for tax exemption and the annual information returns (990/990-EZ/990-PF) filed within the past three years available for public inspection at the principal office during regular business hours. For an explanation of the guidance, refer to Publication 557, Tax-Exempt Status for Your Organization, under the heading entitled Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms.

    Note:

    The Pension Protection Act of 2006 requires 501(c)(3) organizations that file a Form 990-T to report UBIT to make their Form 990-T available for public inspection in the same manner as they make their annual information return available. This requirement applies to Forms 990-T filed after August 17, 2006.

  2. The regulations provide guidance for tax-exempt organizations to comply with requests made in person or in writing from individuals who seek a copy of those documents. They also describe how a tax-exempt organization can make those documents widely available (e.g., through the Internet) and, thereby, avoid the requirement of providing copies in response to individual requests.

  3. The regulations provide guidance on the standards that apply in determining whether an organization is the subject of a harassment campaign. In doing so, they provide procedures for obtaining relief from the general requirement that copies of documents be provided in response to these requests.

  4. Individuals may still request copies of the documents named above from the IRS using Form 4506–A. See IRM 21.3.8.3.4.1.2 , "Public Inspection of Exemption Applications and/or EO Information Returns Disclosable under IRC Section 6104."

21.3.8.12.21.1  (10-01-2008)
Penalty for EO Failure to Comply With Requirements

  1. If an organization fails to comply with the public inspection requirement by the date and in the manner described under IRC section 6104(d), a penalty of $20 a day may be imposed on any person with a duty to comply for each day the failure continues.

  2. Under IRC section 6652(c)(1)(A), the maximum penalty on all persons for any one return shall not exceed the lesser of $10,000 or 5 percent of the organization's gross receipts for the year.

21.3.8.12.22  (10-01-2008)
EO Expedite Requests

  1. EO determination applications/rulings are normally processed in the order received. However, in some circumstances, an application/ruling may be granted expedited handling. See Rev. Proc. 2008-4, 2008-1 IRB 121 (or its successor).

  2. Expedited handling means that a determination is processed ahead of the regular order.

  3. An EO Expedite Request is a written request for expedited handling of an EO determination application.

  4. The approval or denial of an Expedite Request is at the sole discretion of EO Determination Processing.

  5. Normally, in order to qualify for expedite handling, an organization must have a grant pending (or promised an asset worth a specific dollar amount) that is contingent upon receiving a favorable determination letter by a predetermined date. An Expedite Request must be written and must contain the following information:

    1. Identifying information (organization name, address, EIN)

    2. The name of the person or organization committed to giving the grant/asset

    3. The amount of the grant or the value of the asset

    4. The date the grant will be forfeited or permanently redirected to another organization

    5. The impact on the organization's operations if it does not receive the grant/asset, and

    6. The signature of a principal officer or Power of Attorney

    Note:

    Expedited handling is granted only in rare and unusual situations out of fairness to all applicants. Providing the above information does not guarantee expedited handling.

  6. An organization does not meet expedite handling criteria when a grant or other contribution is contingent upon receiving a ruling letter with no deadline date.

  7. Citing ineligibility to apply for a grant due to no formal exempt recognition does not qualify an organization for expedite handling of its determination request.

  8. A determination application/ruling request may also qualify for expedited handling when the purpose of the organization is to provide relief to the general public due to a natural disaster, a business emergency regarding the organizations operation, in situations where Service error has previously occurred, or in any other situation where the EO Determinations Manager or delegate determines that expedited service is warranted.

  9. While you, as TE/GE telephone assistors, should not promote the expedite procedure, you should be aware of verbal cues the caller gives that may indicate that the organization might qualify for expedited processing even though the caller does not specifically mention the word "expedite." For example, a caller inquiring about the status of an application might express concern that the organization is going to lose a grant or donation because the application has not been assigned. Follow-up by asking the caller whether the organization has been promised a specific amount and has been given a deadline for receiving the favorable ruling. If the caller answers affirmatively, then explain the process for requesting expedited processing.

  10. Expedite Requests not attached to the original determination submission should be faxed to (513) 263-3669 or, if the customer prefers, can be mailed to:

    Regular Postal Delivery:
    Internal Revenue Service
    TE/GE Adjustments Unit
    Attn: EXPEDITE
    P.O. BOX 2508
    Cincinnati, OH 45201

    Express and Overnight Delivery:
    Internal Revenue Service
    TE/GE Adjustments Unit
    Attn: EXPEDITE
    550 Main St Room 4024
    Cincinnati, OH 45202

    Note:

    If an application is assigned, refer the customer to the specialist to discuss/request expedited handling.

21.3.8.12.22.1  (04-24-2008)
Expedite Request Status Inquiries

  1. When a call is received requesting the status of an expedite request, verify disclosure.

  2. Determine the status of the application on EDS/TEDS:

    If Then
    EDS/TEDS reflects an open case in Status 50 (Established on EDS/TEDS), Status 51 (Centralized Unassigned Inventory), Status 60 (Awaiting Technical Screening), Status 61 (Unassigned Inventory - Merit), Status 62 (Assigned to Screener), Status 71 (Unassigned Inventory - Accelerated Processing), Status 72 (Assigned to Accelerated Processing Specialist), Status 73 (Manager Returned Accelerated Processing Case), or Status 74 (Managerial Review of Accelerated Processing Case) The expedite request will be worked by the Technical Screening Group 7838, Room 4106
    •If the caller wants to know the status of an expedite request for one of these cases, research the TCC database. If the expedite request has been worked, the "Comments" section of TCC indicates whether the expedite request was approved or denied.
    •If there is no expedite request found on the TCC database and it has been more than two weeks since the expedite request was submitted, instruct the caller to resubmit the request by faxing it to the attention of Michael Flammer at 513-263-4330.
    •If there is no expedite request found on the TCC database and it has been less than two weeks since the expedite request was submitted, inform the caller that it could take up to two weeks for the expedite request to be logged into the inventory system and processed.
    EDS/TEDS reflects an open case in Status 58 (In Transit), Status 75 (Group Unassigned Inventory), Status 52 (Assigned to Specialist), Status 55 (Awaiting Managerial Review) or Status 32 (Returned from Review) The expedite request will be worked by the group/specialist assigned to the case. If the caller wants to know the status of an expedite request for one of these cases, give the caller the direct dial telephone number for that group/specialist.
    EDS/TEDS reflects an open case in Status 31 (In Review) or Status 35 (30-Day Letter Sent) The expedite request will be worked by EO Determinations Quality Assurance (QA). If the caller wants to know the status of an expedite request for one of these cases, prepare a Form 4442 and forward the request to contact the customer, to EO QA.

21.3.8.12.23  (05-17-2007)
Ruling Dates with all Zeroes

  1. Extreme caution must be exercised before issuing an affirmation letter to an organization showing all zeroes for the ruling date on Master File. If more complete information can be gathered from EDS/TEDS, perfect Master File and prepare the appropriate letter.

  2. If the information is not found on EDS/TEDS, refer to the table shown:

    If you are responding to an: Then:
    Authorized caller who is asking about the status of an organization or who is requesting an updated affirmation letter

    1. Explain to the caller that our records are incomplete.

    2. Apologize for the inconvenience and ask the caller if he/she has a copy of the organization's original determination letter.

    3. If so, ask the caller to fax or mail the copy with a cover letter to the TE/GE Correspondence Unit.

    4. If the caller does not have a copy of the original letter, write the caller's contact information on a Form 4442.

    5. Tell the caller he/she will be contacted within 30 days.

    6. Attach an INOLES print to the Form 4442 and give the write-up to your lead who will route it to the TE/GE Correspondence Unit.

    Unauthorized caller who is asking about the status of an organization or who is requesting an affirmation letter

    1. Do not confirm that the organization is exempt.

    2. Explain to the caller that additional research needs to be performed before we can either confirm or deny the exemption of the organization in question.

    3. Apologize for the inconvenience.

    4. Write the caller's contact information on a Form 4442.

    5. Tell the caller he/she will be contacted within 30 days.

    6. Attach an INOLES print to the Form 4442 and give the write-up to your lead who will send it to the TE/GE Correspondence Unit.

21.3.8.12.24  (10-01-2008)
Annual Electronic Notice Filing Requirement, Form 990-N

  1. The Pension Protection Act of 2006 requires organizations to submit an annual electronic notice, Form 990-N (e-postcard), for tax periods beginning after December 31, 2006, if they are not required to file Form 990 (or 990-EZ), Return of Organization Exempt From Income Tax, because their gross receipts are normally $25,000 or less. This requirement also applies to small exempt organizations with no formal exemption.

  2. Section 1223 of the Pension Protection Act requires that the IRS notify these organizations of the new requirement by mail, as well as by Internet and other means of outreach. Starting in July 2007, educational letters, CP 299s, were mailed to organizations with a 990-02 filing requirement to notify them of the new electronic notification requirement. The CP 299 explains the new requirement and the consequences of non-compliance and lists the types of organizations which are exempt from the requirement. It also tells the organization where it can go for additional information.

    Note:

    The CP 299 is also sent to newly-established exempt organizations and to organizations whose filing requirement changes from 990-01 to 990-02.

  3. The annual electronic notice (Form 990-N) must be submitted by the 15th day of the fifth month after the close of the organization’s tax period. There is currently no provision for extending the due date of the Form 990-N. However, no extension is necessary because the Daily Delinquency Penalty does not apply to Form 990-N submissions. Therefore, an organization will not suffer any adverse consequences for submitting its Form 990-N late unless it is the third year and it did not file a Form 990/990-EZ or submit a Form 990-N the previous two years. See (7) below.

  4. Once the organization has submitted its Form 990-N, it should receive an acknowledgement via e-mail within 24 hours of the submission.

  5. The following organizations are exempted from the annual notification requirement:

    • A church, an interchurch organization of local units of a church, a convention or association of churches, or an integrated auxiliary of a church (as defined in Treas. Reg. §1.6033-2(h))

    • An exclusively religious activity of any religious order

    • A mission society sponsored by or affiliated with one or more churches or church denominations, more than one-half of the activities of which society are conducted in, or directed at persons in, foreign countries

    • An educational organization (below college level) that is described in section 170(b)(1)(A)(ii), that has a program of a general academic nature, and that is affiliated (within the meaning of Treas. Reg. §1.6033-2(h)(2)) with a church or operated by a religious order

    • A subordinate organization whose financial information is included in a group return

    • A State institution, the income of which is excluded from gross income under section 115(a)

    • An organization described in section 501(c)(1); or

    • An organization that is a governmental unit or an affiliate of a governmental unit exempt from federal income tax under section 501(a)

  6. For tax years ending after August 17, 2006, section 509(a)(3) supporting organizations must file a paper or electronic Form 990 (or Form 990-EZ), even if their gross receipts are normally $25,000 or less. This requirement is satisfied if the section 509(a)(3) supporting organization is a subordinate organization whose financial information is included on a group return. Section 509(a)(3) supporting organizations that support religious organizations are exempted from the requirement to file a paper or electronic Form 990 (or Form 990-EZ) if their gross receipts are normally less than $5,000. However, these organizations are still required to submit the annual electronic notice (Form 990-N).

  7. The electronic notice (Form 990-N) requires the organization to provide the following information:

    • The organization’s legal name

    • Any other names the organization uses

    • The organization’s mailing address

      Note:

      If the organization submits a Form 990-N that shows an address other than the one we currently show on IDRS as its AOR, the address used on the Form 990-N will become the organization's AOR.

    • The organization’s Web site address (if applicable)

    • The organization’s employer identification number (EIN)

    • Name and address of a principal officer of the organization

    • The organization’s annual tax period

    • An indication whether the organization has terminated or is no longer in business, and

    • A statement that the organization’s annual gross receipts are still normally $25,000 or less

  8. If an organization fails to submit the annual electronic notice (Form 990-N) or fails to file Form 990 or Form 990-EZ for three consecutive years, its tax-exempt status is revoked as of the submission/filing due date of the third year. The system will put the organization in status 97 if there has been no TC 150 posting for three years and six months.

  9. If an organization’s tax-exempt status is revoked for failing to submit the annual electronic notice (Form 990-N) or for failing to file an information return, such as Form 990, Form 990-EZ, or Form 990-PF, for three consecutive years, it must apply (or reapply) for exemption using Form 1023, Application for Recognition of Exemption under 501(c)(3) , or Form 1024, Application for Exemption Under Section 501(a), and pay the appropriate user fee. Reinstatement of tax-exempt status may be retroactive if the organization can show that it had reasonable cause for not filing the annual electronic notices or information returns.

  10. Forms 990-N are open to public disclosure and inspection under IRC 6104. Like the other returns in the Form 990 series, they will post to Master File as a TC 150, but they will have the distinct doc code (fourth and fifth digits of the DLN) of 89.

  11. If you receive a call about the CP 299 or about the Form 990-N filing requirement, refer to the sample CP 299 on SNIP and to the FAQs on the IRS Web site (linked on the TE/GE Research Portal) to answer the caller's question(s). See IRM 21.3.8.9.5, "Address Changes/Misdirected Mail, " if the caller wants to change the organization's address of record or if the CP 299 was received by the caller in error.

21.3.8.12.24.1  (02-29-2008)
Assisting Small Exempt Organizations in Submitting Their Form 990-N

  1. TE/GE call site assistors will help small exempt organizations without access to a personal computer comply with their requirement to submit the Form 990-N electronically by taking the necessary information and submitting the form on the EO's behalf.

  2. The e-mail acknowledgements that generate from the Forms 990-N submitted by the call site employees will be routed to EO Customer Education and Outreach, which will mail the acknowledgement to the organization's AOR.

  3. If you cannot assist the caller using the information contained in this IRM or by referring to the FAQs on the IRS Web site, prepare a Form 4442 to your lead with the caller’s name and contact information, the organization’s EIN and a brief description of the problem/question. Apologize to the caller and tell him we will contact him within 15 days.

21.3.8.12.24.1.1  (01-28-2008)
Determining if the Caller Needs e-Postcard Filing Assistance

  1. If the caller states that he/she cannot file the e-Postcard because he/she does not have a computer (and presumably no e-mail account) take the following steps:

    1. Inform the caller/customer that it is acceptable to have a friend or family member help them file the e-Postcard. Also explain that it only takes a few minutes (15 minutes at most) to file the e-Postcard.

    2. If the caller/customer insists that there is no one who can help them, advise them that you can file the e-Postcard for them this year, but they will need to make every attempt to file it on their own for subsequent years.

  2. Ensure that the caller has the following information available before you begin creating an e-Postcard:

    • Organization’s EIN

    • Organization’s legal name

    • Organization’s tax year

    • Organization’s mailing address

    • Principal officer’s name and address

    • If applicable, any other names the organization does business as (DBA name)

    • Web site address, if applicable

    • Knowledge as to whether the organization’s annual gross receipts are normally $25,000 or less

    • Knowledge of whether the organization is still in business

21.3.8.12.24.1.2  (05-23-2008)
Creating an e-Postcard

  1. Access the e-Postcard filing system at www.irs.gov/eo. Click " Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard)" and then under "How To File, " click on the word "here."

  2. On the home page of the filing system, click the link under " How to File."

  3. Enter your assigned login ID and password and click " Log in."

  4. Enter the organization’s EIN and click "Submit EIN."

  5. You will see the first of two main screens for the e-Postcard. The first page will already contain the organization’s tax period, legal name and EIN. This is the information on Master File and you cannot change these fields.

    Note:

    If the caller indicates that the tax year information we are showing is incorrect or that it has changed its tax year ending month, the organization may opt to submit its Form 990-N based on the tax year period showing on our records and then send a written request to change its accounting period before its next Form 990-N is due. If it chooses not to submit the Form 990-N based on the tax year period reflected on our records, it will have to request a change in tax year period and then submit its Form 990-N once our records have been updated (approximately eight weeks after the request has been mailed). See IRM 21.3.8.9.7, "Change in Accounting Period for Organizations Under 501(a)," for additional details.

    If you inadvertently entered the wrong EIN, click "Enter a Different EIN" to correct the EIN.

    Note:

    If the organization is a subordinate included in a group ruling, the legal name may reflect that of the central organization; generally the subordinate's name shows as the sort name on IDRS. If the information is correct on IDRS, you may continue submitting the Form 990-N. If the caller asks about adding the subordinate's name to the Form 990-N to facilitate searching for the organization's submission, you may add the subordinate's name on the DBA name line of the Form 990-N. This information will not update IDRS, however. If the primary and sort name lines are incorrect on IDRS, the organization will have to initiate a name change/correction before its Form 990-N can be submitted. See IRM 21.3.8.9.2, "Name Changes - EO," for additional information.

  6. The filer must answer two questions on the first page:

    1. "Has your organization terminated or gone out of business?" If the filer answers "yes" to this question, you will get a message that asks the filer to confirm that they no longer exist because a "yes" answer means that the IRS will no longer consider the organization to be tax-exempt. Be sure that the filer understands this. If they inadvertently answered " yes," change the answer to "no." If the organization has terminated, you still complete the e-Postcard. See IRM 21.3.8.12.5.1, "Dissolution," for additional information.

    2. "Are your gross receipts normally $25,000 or less?" If the filer answers "no" to this question, the organization cannot file an e-Postcard. It must file a Form 990 or Form 990-EZ. If the filer answered the question incorrectly, you can go back and change the answer to "yes," but if " no" is the correct answer, you will not be allowed to complete the e-Postcard. The help text (question mark inside a circle) next to this field explains how to determine if the organization's gross receipts are normally $25,000 or less.

  7. Click "Next Page."

  8. Enter the information requested on the second page: organization's dba name(s); mailing address; Web site address; and type, name and address of a principal officer.

    1. If an organization has more than one DBA name, click "Enter Additional DBA Names." This button appears after you enter the first DBA name and allows you to add additional DBA names, delete a DBA name, or modify a DBA name.

    2. If the organization has an "in care of" name as part of its mailing address, this information must be verified on IDRS because there is currently no field on the Form 990-N to reflect it. Add or correct the "in care of" information as necessary.

    3. The principal officer type will be either "person" or "business." For most organizations, it will be a person. If it is a business, such as a bank, be sure to indicate "business " and enter the business name.

21.3.8.12.24.1.3  (01-28-2008)
Submitting the e-Postcard

  1. When you have completed both pages of the e-Postcard, click " Submit Filing to IRS."

  2. You will see a page that states that the e-Postcard has been submitted to the IRS and that the filer will receive an e-mail indicating whether the e-Postcard was accepted or rejected. EO will receive the e-mail and mail it to the organization.

  3. Inform the filer that they will receive a confirmation by mail within 10 business days as to whether their e-Postcard was accepted or rejected. You can assure the filer that most are accepted. If the notice is rejected, the confirmation will have instructions as to whom to contact for assistance in resolving the problem.

    Note:

    If the caller states that it has been more than 10 business days since the IRS submitted the Form 990-N and the organization has not received its acceptance or rejection notice by mail, prepare a Form 4442 referral for your lead with the caller's contact information and tell him he will be contacted within 15 days. The lead will forward the information to the TE/GE Customer Education and Outreach contact via the appropriate channels.

21.3.8.12.24.1.4  (01-28-2008)
Additional Questions on the Form 990-N for 509(a)(3) Supporting Organizations

  1. Most 509(a)(3) supporting organizations must file Form 990 or Form 990-EZ. However, supporting organizations that support only religious organizations and that have annual gross receipts that are normally $5,000 or less may submit the e-Postcard. If you enter an EIN that belongs to a supporting organization, a message will appear on page 1 of the e-Postcard stating that IRS records show that the organization is a supporting organization. If the organization is not a supporting organization, it is instructed to call CAS. See IRM 21.3.8.12.5.4, "Change in Foundation Classification." If it is a supporting organization, it must answer the following two questions:

    1. "Are your gross receipts normally $5,000 or less?" If the filer answers "no," to this question, the organization cannot file an e-Postcard. It must file Form 990 or Form 990-EZ. If the filer answered the question incorrectly, you can go back and change the answer to "yes," but if " no" is the correct answer, you will not be allowed to complete the e-Postcard.

    2. "Do you support only religious organizations? " If the filer answers "no," to this question, the organization cannot file Form 990-N because it does not support only religious organizations. The organization must file Form 990 or Form 990-EZ. If the filer answered the question incorrectly, you can go back and change the answer to "yes," but if "no" is the correct answer, you will not be allowed to complete the e-Postcard.

21.3.8.12.24.1.5  (05-23-2008)
Form 990-N Error Messages

  1. The following paragraphs explain additional error messages you may encounter beyond those mentioned in the preceding tridocs.

  2. "The employer identification number (EIN) ‘xx-xxxxxxx’ was not found. You may have entered the EIN incorrectly. Please re-enter the EIN and try again. If the EIN is correct, call IRS Customer Account Services at 877-829-5500 for assistance."

    • If the EIN is correct, but the system is not allowing you to file the e-Postcard, it is because an EO submodule does not exist. See IRM 21.3.8.12.24.2, "Rejected Forms 990-N and Collecting Data to Establish an EO Submodule."

    • If the EIN is incorrect, research for the correct one. See IRM 21.3.8.12.24.2, "Rejected Forms 990-N and Collecting Data to Establish an EO Submodule," for additional information.

  3. "IRS records indicate that your organization is a private foundation…" The message explains that a private foundation must file Form 990-PF. See IRM 21.3.8.12.5.4, "Change in Foundation Classification," if the caller states that the organization is not a private foundation.

  4. "Your tax year has not ended. You cannot file the e-Postcard until after your tax year ends on mm/dd/yyyy."

  5. "IRS records indicate that your organization is not eligible to file Form 990-N (e-Postcard) due to the Internal Revenue Code that governs organizations of your type." This will be an infrequent error message.

    • An organization will get this message if its subsection code is one of the following:

      Subsection Code Description
      01 Section 501(c)(1) – U.S. government instrumentalities
      20 Section 501(c)(20) – Group legal services plans
      21 Section 501(c)(21) – Black lung trusts
      23 Section 501(c)(23) – Pre-1880 Armed Forces organizations
      24 Section 501(c)(24) –ERISA sec. 4049 trusts
      40 Section 501(d) – Religious and apostolic organizations
      81 Section 529 – Qualified tuition programs
      82 Section 527 – Political organizations
      90 Section 4947(a)(2) – Split-interest trusts
      92 Section 4947(a)(1) – Charitable trusts treated as private foundations

  6. "The system found an existing e-Postcard for yyyy (mm/dd/yyyy through mm/dd/yyyy). Click on the ‘Go To Control Panel’ button to edit the existing e-Postcard."

  7. "Your organization has already filed an e-Postcard for yyyy (mm/dd/yyyy through mm/dd/yyyy). The system will not accept an amended e-Postcard. You can make corrections or update your information when you file your next e-Postcard, which will be due after mm/dd/yyyy."

21.3.8.12.24.1.6  (01-28-2008)
Form 990-N Warning Messages

  1. There are a number of warning messages that you may get, but for the most part, these are self explanatory. For example, if the state and zip code do not match, you will get a message indicating this and will be told to enter the correct zip code or state. Also, if you failed to complete a required field, you will get an error message and you must complete the field before you can submit the e-Postcard.

21.3.8.12.24.1.7  (03-19-2008)
Form 990-N Filing System Problems

  1. If the caller is able to access the e-Postcard filing system but is experiencing technical difficulties with the system, he should contact Urban Institute by:

    • Calling 888-887-0084 toll free between 9:30 AM and 5:30 PM (EST)

    • Sending an e-mail or technical support request directly from the e-Postcard filing system (click on "Technical Support" from the e-Postcard filing system home page)

21.3.8.12.24.2  (10-01-2008)
Rejected Forms 990-N and Collecting Data to Establish an EO Submodule

  1. The following procedures are intended to cover the majority of calls which CAS could receive from small exempt organizations that receive a reject message when they attempt to submit their Form 990-N and are instructed to contact CAS. If you cannot resolve your caller’s problem with the information contained in this tridoc or elsewhere in this IRM or by referring to the FAQs on the IRS Web site, prepare a Form 4442 to your lead with the caller’s name and contact information, the organization’s EIN and a brief description of the problem/question. Apologize to the caller and tell him we will contact him within 15 days.

  2. If you determine that the notice rejected because the organization does not have an EO submodule (and is not a "no-roll" ), take information from the caller that will allow the establishment of a submodule. Capture that information on the data sheet (EO Data Sheet) found on the TE/GE Call Sites Research Portal (in the EO – e-Postcards section of the Job Aids). The sheet must be sent in an encrypted e-mail to EO Entity, which will establish the submodule within eight weeks of receipt of the form. You must also put a history item on DI (if available) or open/close a control base on ENMOD with the notation "SUBMODDATA."

    Note:

    Do not take submodule information for component units of the Salvation Army or the American Red Cross. The Salvation Army is classified as a church and is not required to submit a Form 990-N. Local chapters of the American Red Cross are not separate legal entities and have no EO filing requirements (although they may have EINs for banking and employment tax purposes). Their finances and activities are included on the return filed by their national headquarters. See IRM 21.3.8.12.14.5, " Adding Subordinates to a GEN," for additional information.

  3. CAS assistors should capture the information required on the data sheet in the order described in these procedures. The top portion of the data sheet pertains to the submodule itself; the bottom portion contains additional information pertinent to the Form 990-N. As these exempt organizations have access to a personal computer, they should be able to submit their own Form 990-N once the submodule has been established. If the caller asks the IRS to submit the Form 990-N on the organization’s behalf, complete the lower portion of the data sheet and mark the appropriate box at the top of the sheet.

  4. Inform the caller that the organization will be able to submit its Form 990-N in eight weeks. If the caller asks whether the IRS can submit the Form 990-N on behalf of the organization, explain that we can provide that service; however:

    • The organization will receive no direct e-mail acknowledgement of submission if it chooses to have the IRS submit its form.

    • The organization will not have the opportunity to print off a hard copy of the submission for its records.

  5. Check the appropriate box at the top of the form based on the caller’s submission preference. If the organization wants the IRS to submit the Form 990-N for them, the "Date submitted" field at the top of the form will be completed by EO Entity when they submit the Form 990-N.

  6. If the caller wants the IRS to submit the Form 990-N, solicit the remaining Form 990-N information ("below the line" ) and complete the data sheet. For information on the remaining Form 990-N questions on the Data Sheet, refer to the instructions provided to assist the small EOs with no access to a computer. See IRM 21.3.8.12.24.1 , "Assisting Small Exempt Organizations in Submitting Their Form 990-N," and subsequent tridocs.

  7. All Data Sheets submitted to EO Entity must include your name and the name, telephone number, and e-mail address of your lead (fields for this information are at the end of the sheet). If EO Entity is unable to establish the submodule and/or to submit the Form 990-N, they will return the Data Sheet to your lead for contact with the organization to solicit the missing information or to make a correction to the information collected. For this reason, it is extremely important that you provide the caller’s name, title/position, and telephone number on the data sheet.

  8. If the caller is unable to answer a question necessary to complete the submodule or the Form 990-N information, inform the caller that the information is needed to update our records/submit the 990-N. Tell the caller he will need to call back with the information and will need to start the process from the beginning. Briefly describe the other information that will be needed so that the organization will not need to make multiple contacts.

  9. If the caller indicates that the organization has terminated or ceased business (and the organization does not already have a submodule), inform the caller that the organization is not required to submit the Form 990-N.

    Note:

    If the terminated organization does not have formal exemption but does have an EO submodule, it should submit the Form 990-N and indicate it has terminated. Organizations with formal exemption, including entities that are " no rolls," should follow the normal dissolution procedures. See IRM 21.3.8.12.5.1, "Dissolution. "

  10. If the caller indicates that he attempted to submit his Form 990-N after the prescribed waiting period and encountered the same problem as when he first tried to submit the form, prepare a Form 4442 referral to your lead as described in (1) above.

21.3.8.12.24.2.1  (10-01-2008)
Establishing the EO Submodule: Identifying the Organization

  1. Ask the caller for the EIN and the name of the organization and verify disclosure. If the caller is not authorized to act on behalf of the organization, explain that we need to speak to an authorized individual to resolve the Form 990-N submission problem and request that the caller have an authorized individual call us back.

  2. Research the EIN on INOLES and confirm that the EIN and the name of the organization match what the caller said, taking into consideration that the primary name line of an organization included in a group ruling generally reflects the name of the central organization and the sort name line reflects the name of the subordinate.

    1. Use the chart below if the name on IDRS does not match that given by the caller:

      If And Then
      The name doesn’t match The organization underwent a name change that was not reported to the IRS The organization will not be able to submit its Form 990-N under its new name until it has notified the IRS and we have updated our records. See IRM 21.3.8.9.2, "Name Changes – EO," for additional information.
      The caller states that the organization has not changed its name Research NAMEE/NAMEB for a different EIN:

      • If a different EIN is found, consult the table below.

      • If no EIN for the organization can be found or confirmed, the organization must apply for an EIN and then contact CAS for the establishment of an EO submodule after the EIN has been assigned. See IRM 21.3.4.13.1 , "Applying for an EIN," for additional information.

    2. Use the following table if the name matches or if you identify a different EIN through IDRS research:

      If And Then
      The name matches or a different EIN is found There is a valid EO submodule for the EIN The caller should be able to file under the correct EIN unless the organization is of the type that is exempted from or ineligible for filing the Form 990-N. See IRM 21.3.8.12.24.1.5, "Form 990-N Error Messages." (Provide the correct EIN to the caller if you identified a different EIN than the one given by the caller.)
      There is no submodule Research EDS/TEDS for a determination that did not roll to Master File. See IRM 21.3.8.3.8, " Perfection of Entity/EO Submodule Information on the Master File."

      • If found, update IDRS and tell the caller that the organization should be able to submit its Form 990-N in four weeks (unless the organization is of the type that is exempted from or ineligible for filing the Form 990-N).

      • If no record is found on EDS/TEDS, ask the caller for a brief description of the organization’s purpose(s) and activities. If the organization appears to be one which is exempted from the requirement to submit a Form 990-N, inform the caller. See IRM 21.3.8.12.24 , "Annual Electronic Notice Filing Requirement, Form 990-N," for a list of exempted organizations. If the organization appears to be required to submit a Form 990-N, continue taking information from the caller to establish the submodule (the information "above the line" on the data sheet).

        Note:

        See IRM 21.3.8.5.1.3.1

        , "Verification of Tax Exempt Status and Foundation Classification," if the caller states he has a copy of a determination letter. Tell the caller the organization will not be able to submit its Form 990-N until it has been notified by the TE/GE Correspondence Unit that our records have been updated to reflect their exemption.

    3. If no information comes up for the EIN, research NAMEE/NAMEB, etc. for a different EIN and consult the following table:

      If And Then
      The EIN is confirmed using a command code such as NAMEE/NAMEB/FINDE   TC 000 the EIN back on with the organization’s current AOR.
      Ask the caller for a brief description of the organization’s purpose(s) and activities. If the organization appears to be one which is exempted from the requirement to submit a Form 990-N, inform the caller. See IRM 21.3.8.12.24, "Annual Electronic Notice Filing Requirement, Form 990-N," for a list of exempted organizations.
      If the organization appears to be required to submit a Form 990-N, continue taking information from the caller to establish the submodule. Mark the box on the data sheet that indicates that CAS TC 000’d the entity back onto IDRS.
      A different EIN is found There is a submodule and the subsection code is not one ineligible to submit a Form 990-N ( See IRM 21.3.8.12.24.1.5 , "Form 990-N Error Messages." ) The caller should be able to file under the correct EIN.
      (Provide the correct EIN to the caller.)
      There is no submodule Research EDS/TEDS for a determination that did not roll to Master File. See IRM 21.3.8.3.8, " Perfection of Entity/EO Submodule Information on the Master File." If found, update IDRS and tell the caller that the organization should be able to submit its Form 990-N in four weeks (unless the organization is of the type that is exempted from or ineligible for filing the Form 990-N).
      If no record is found on EDS/TEDS, ask the caller for a brief description of the organization’s purpose(s) and activities. If the organization appears to be one which is exempted from the requirement to submit a Form 990-N, inform the caller. See IRM 21.3.8.12.24, "Annual Electronic Notice Filing Requirement, Form 990-N," for a list of exempted organizations. If the organization appears to be required to submit a Form 990-N, continue taking information from the caller to establish a submodule.

      Note:

      See IRM 21.3.8.5.1.3.1, "Verification of Tax Exempt Status and Foundation Classification, " if the caller states he has a copy of a determination letter. Tell the caller the organization will not be able to submit its Form 990-N until it has been notified by the TE/GE Correspondence Unit that our records have been updated.

  3. If the organization has an EO submodule but no EO filing requirements, e.g., the organization is in status 20 (terminated), advise the caller of the appropriate corrective measure (e.g., reinstatement procedures). If the organization is in 01 status with no EO filing requirements and there is no indication that the organization is a private foundation, update the account by inputting a TC 016 to add the appropriate Form 990 filing requirement based on the organization's average annual gross receipts. If the preceding situations do not apply and there is no apparent reason why the Form 990-N rejected, prepare a Form 4442 with the required contact information and refer to your lead for additional research. Tell the caller that we will make contact within 15 days. If there is no submodule, continue taking information from the caller to establish the submodule.

    Note:

    If the organization is in FTE status (71) on IDRS, explain to the caller that the organization is not eligible to submit a Form 990-N until it has established a formal exemption. In the interim, the organization is liable for a Form 1120.

  4. Once the EIN and name have been confirmed, verify the organization’s mailing address. Update the AOR as necessary.

    Note:

    If the caller is authorized but cannot confirm the current AOR, you may not update the AOR but you may continue to take the information necessary to establish the EO submodule. Inform the caller that she/he will be able to submit the organization's Form 990-N in 8 weeks and should use the correct current mailing address when submitting the form. IDRS will update to reflect the new address. If the caller wants the IRS to submit the form on the organization's behalf, however, the organization should complete and submit a Form 8822 (or otherwise submit a written request) to update the address and then call us back to give us the Form 990-N data once they have been notified that the address has been changed.

21.3.8.12.24.2.2  (10-01-2008)
Establishing the EO Submodule: Organizational and Operational Issues

  1. Ask the caller if the organization is included as a subordinate under a group exemption:

    If Then
    Yes Instruct the caller to notify the central organization to send a request for inclusion of the subordinate to Ogden for establishment of the submodule. See IRM 21.3.8.12.14.5, " Adding Subordinates to a GEN," for additional details. If the group ruling is not for one of the subsection codes previously listed ( See IRM 21.3.8.12.24.1.5, "Form 990-N Error Messages." ), tell the caller the organization should be able to submit its Form 990-N 45 days after the information has been sent to Ogden.
    The organization is independent Continue with the probes.

  2. Is the organization a distinct legal entity (does it have an organizing document)?

    If Then
    No Inform the caller that the organization is not required to submit the Form 990-N because it does not "exist" for filing purposes. If the organization wishes to be treated as tax exempt, however, it is required to have an organizing document that meets the applicable organizational test. Refer the caller to Publication 557 and, if appropriate, to the instructions to Form 1023.
    Yes Continue with the probes.

  3. What are the organization’s purpose(s) and activities?

    If the purpose(s)/activities Then
    Do not qualify for exemption or if that type of organization is exempted from submitting a Form 990-N or if the applicable subsection is one ineligible to submit the 990-N Inform the caller.
    See IRM 21.3.8.12.24 , "Annual Electronic Notice Filing Requirement, Form 990-N," for exempted organization types.
    See IRM 21.3.8.12.24.1.5, "Form 990-N Error Messages, " for ineligible subsections.
    Do qualify for exemption under a subsection other than the ones listed above Ask the caller what subsection she/he believes best describes the organization.
    If the caller is unsure, be prepared to suggest an appropriate subsection based on the caller's description of the organization's purpose/activities. Refer to Publication 557, Tax Exempt Status for Your Organization, as necessary.

    • If (c)(3), determine by purpose/activities or by sources of support whether the organization qualifies as a public charity or as a private foundation.

    • If a private foundation, inform the caller the organization is required to file a Form 990-PF and, if it was formed after October 9, 1969, is required to file a Form 1023 within 27 months of its formation.

    • If a public charity or one of the other subsections, determine the organization’s average annual gross receipts. If over $25,000, inform the caller that the organization is required to file a Form 990 or 990-EZ. If under $25,000, continue completing the data sheet.

  4. Determine the appropriate status code for the submodule:

    • If (c)(3) public charity with gross receipts of $5,000 or less, mark status 31 on the data sheet.

    • If (c)(3) public charity with gross receipts over $5,000, mark status 40 on the data sheet and inform the caller that the organization may submit an initial Form 990-N but that it is required to apply for formal recognition.

    • If other than (c)(3), (9), or (17), mark status 36 and the appropriate subsection on the data sheet.

  5. Indicate the fiscal year month on the data sheet. For status 36, also indicate the classification code based on the organization’s purpose(s)/activities. See Exhibit 21.3.8-2, " Table of EO Subsection and Classification Codes."

21.3.8.12.25  (05-23-2008)
Classification Codes

  1. Classification codes are single-digit codes that display on INOLES, ENMOD, and BMFOLO and that provide basic information about the purpose/activities of an exempt organization. For example, if a 501(c)(3) organization shows classification codes "71," then the organization is both religious (7) and charitable (1).

  2. Depending on the subsection under which the organization is exempt, up to three different classification codes may be displayed.

  3. A caller representing a grant-making organization or a state government may ask about the classification of an exempt organization that has applied to them for certain benefits (for example, sales tax exemption) because those benefits are restricted to specific types of organizations. Use the classification codes displayed on IDRS to respond to the caller's question.

    Note:

    This information can only be shared verbally. There is currently no C letter that contains this information.

  4. If an organization with formal exemption disagrees with the classification codes we show for them, they must send a written request for correction to the TE/GE Correspondence Unit at IRS, P.O. Box 2508 Room 4024, Cincinnati, OH 45201. They may also fax the request to 513-263-4330. The organization should receive a response within 30 days of submitting the request.

  5. If an organization that is included in a group ruling wants to have its classification code(s) changed/corrected, it should have the central organization send a written request to EO Entity at IRS, MS 6273, Ogden, UT 84201. They may also fax the information to 801-620-3249 or 801-620–3263. The information should be changed/corrected within 30 days of receipt, but EO Entity will not issue a letter acknowledging the change/correction.

  6. Refer to Document 6379, Exempt Organizations Management Information Systems Codes, for a complete list of the valid classification codes. See Exhibit 21.3.8-2, "Table of EO Subsection and Classification Codes," for a listing of the codes in a slightly different format than that found in Document 6379.

21.3.8.13  (10-01-2006)
Employee Plans (EP)

  1. This section serves as a guide for performing tasks involved in addressing general EP related issues.

21.3.8.13.1  (05-23-2008)
Form 5330

  1. Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, is used to report an excise tax resulting from prohibited transactions/actions/failures etc. related to a plan.

  2. Refer to the most recent Form 5330 instructions for:

    1. A list of actions/circumstances which require filing the form with the associated IRC section

    2. The various due dates of the return

    3. Other specific form-related issues

  3. A separate Form 5330 must be filed to report excise taxes from different plans or to report excise taxes that do not have the same filing due date. However, if the excise tax involves the same plan and all the taxes have the same filing due date, they can be reported together on one Form 5330.

  4. To claim a refund or credit for overpaid taxes reported on Form 5330, an amended return with a detailed explanation must be filed.

  5. Generally Form 5330 is filed with an EIN, but may be filed with an SSN. Form 5330 accounts filed under an SSN, can be accessed by adding " V" to the end of the SSN.

  6. Prior to January 2001, assessments related to the Form 5330 were made on NMF. After that date, Forms 5330 are processed to the BMF. Whether a Form 5330 is assessed on NMF or BMF, a TC 154 on the EPMF (command code EMFOL) indicates that a Form 5330 was filed. Forms 5330 processed before January 2001 are available from ERTVU; later periods are available on BRTVU.

  7. Abatement of excise tax and/or penalties:

    1. Excise taxes assessed under IRC 4974 for failure to make the required minimum distribution can be waived due to reasonable cause, or because the plan has been admitted to the Employee Plans Correction Resolution System. See Rev. Proc. 2006-27, Section 6.09 for further information.

    2. The excise tax imposed under 4980F can be waived due to reasonable cause to the extent that the payment of the tax would be excessive relative to the failure involved. Also, no excise tax will be imposed during any period which any person subject to liability for the tax did not know that the failure existed and exercised reasonable diligence to meet the ERISA section 204(h) notice requirement.

    3. See IRM 21.3.8.10.3.6, Reasonable Cause for Penalty Abatement, for information regarding abatement of the late filing and/or late payment penalties due to reasonable cause.

  8. See IRM 21.5.11,Employee Plan Accounts, for additional information.

21.3.8.13.2  (12-18-2007)
Form 5500/5500–EZ

  1. Effective tax period December 31, 2003/200312, Form 5500 and Form 5500-EZ, can no longer be downloaded for filing purposes and must now be ordered. Form 5500, Form 5500-EZ and any supporting schedule(s) must be ordered separately.

  2. Customers must file all Form 5500 series returns, including those for years prior, with the EFAST contractor in Lawrence, KS, unless they are responding to an IRS notice. If the filing is received at an IRS Campus, that Campus forwards the return to the contractor in Lawrence, KS.

  3. For specific form-related issues, refer to the following:

    1. Form 5500, Annual Return/Report of Employee Benefit Plan

    2. Instructions for Form 5500

    3. Form 5500–EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan

    4. Instructions for Form 5500–EZ

      Note:

      Form 5500-EZ filing requirements changed for plan years that began on or after January 1, 2007. As a result of the change, a Form 5500-EZ does not have to be filed for a plan year (other than the final plan year) if the filer has one or more one-participant plans that separately or together have total assets of $250,000 or less at the end of that plan year. Filers who were filing under the previous $100,000 assets rule may discontinue filing until they reach the $250,000 total assets threshold or until they terminate the plan and file their final Form 5500-EZ.

  4. The Delinquent Filer Voluntary Compliance (DFVC) Program is for late filed 5500 returns only (5500-EZ filers are not eligible).

    • Both the Internal Revenue Service and the Department of Labor (DOL) can assess late filing penalties for delinquent Form 5500 returns.

    • The Delinquent Filer Voluntary Compliance Program (DFVCP) — If the Form 5500 return is required to be completed under Title 1 of ERISA, the plan administrator can request to be considered under the DOL's Delinquent Filer Voluntary Compliance Program in order to pay a reduced penalty. Per Notice 2002–23, the IRS will not assess a separate late filing penalty on those returns which are both eligible for and satisfy the requirements of the DFVC program. For additional information regarding the DFVC program, contact the DOL or go to www.dol.gov/ebsa.

    • The DFVCP is not available to Form 5500 filers who have already been notified in writing by the DOL that they will be assessed a penalty for failure to file an annual report. However, if the filer has received a notice from the IRS, he or she may still apply for the DFVCP, if otherwise eligible.

    • Form 5500-EZ is solely an IRS form and is not eligible for DFVCP. The late filing penalty can be abated due to reasonable cause. If the plan sponsor chooses to attach a letter of explanation to the delinquent return, he/she should retain a copy of the letter that can be used to respond to any penalty notice the sponsor receives.

      Note:

      The statutory period of limitations for the 5500 series is three years from the due date of the return or three years from the IRS received date, whichever is later.

  5. See IRM 21.5.11,Employee Plan Accounts, for additional information.

21.3.8.13.3  (10-01-2006)
Missing Participants

  1. Plan administrators must take reasonable steps in attempting to locate a missing participant or beneficiary before making distributions. See Field Assistance Bulletin 2004-2 at the Department of Labor Web site for further information.

  2. Administrators may consider researching telephone directories and plan records, checking with designated beneficiaries, using certified mail or attempting other search methods before distributing the money.

  3. In addition to the above, administrators should take advantage of the "letter forwarding program" , details of which may be found on the IRS Web site or in Rev. Proc. 94-22. The Social Security Administration also has a similar program. Plan sponsors/administrators may want to consider the options in IRM 21.3.8.13.3.1 below.

21.3.8.13.3.1  (10-01-2007)
Distribution Options for Plans with Missing Participants

  1. If plan administrators are unable to locate participants, they may consider one of these options:

    1. Establish a rollover IRA account in the name of the missing participant. See Notice 2005-5 for details.

    2. Keep the benefits in the plan until such time as the missing participant can be located and then make a distribution at that time. Not all plans may be able to use this option.

    3. Escheat the assets to the unclaimed property fund of the applicable state government. This may be especially helpful for plans that are terminating.

    4. Send the assets of a missing participant in a terminated defined benefit plan to PBGC.

21.3.8.13.4  (10-01-2006)
Plan Numbers

  1. A plan number is a three–digit number assigned by the plan sponsor to differentiate between plans which have, or may be, established or maintained by the same plan sponsor, as shown:

    If the Plan is a Then the Plan Number Starts With:
    Pension Plan 001–500
    Welfare Plan 501–999
    Fringe Benefit Plan 501–999
    Form 5500–EZ 001–500
    Multiple employer Plan (Other) plan 333–339 (Pre–EFAST only)

  2. The plan number, along with the plan name, distinguishes a plan from other plans for a given sponsor. Once assigned, the same number must be used consistently to identify the same plan.

  3. The plan name, plan number, type of return filed, and the plan month ending make up the plan entity.

  4. If a plan is terminated, its number cannot be reused for a new plan.

21.3.8.13.5  (10-17-2006)
Plan Terminations

  1. In order for a qualified plan to terminate, the employer, the plan sponsor, or the plan administrator is generally required to perform the actions listed below. However, due to the variety of plans and regulations, additional steps may also be required. It is strongly recommended for a plan sponsor to consult a plan professional before terminating his or her plan.

    1. The plan must be updated for all additional changes in the law which were in effect at the time of termination.

    2. Prior notice must be given to the participants regarding the plan termination, explaining the right to a tax free rollover, the income tax withholding requirements, and possibly some other things, depending upon the plan.

    3. A Board of Directors’ Resolution, corporate minutes or plan amendment must be completed to terminate the plan. It must sufficiently identify the plan, give the effective date of the termination, and be executed with a dated signature.

    4. Written consent of the participant is usually required for all distributions. Additionally, a pension plan may also require the consent of a participant's spouse.

    5. Distribution of the assets should be completed as soon as administratively feasible, generally within one year. The plan must file Form 1099R and Form 1096 to report the distributions, and Form 945 to withhold the 20% of the distributions as income tax, unless the distribution is rolled over in a trust-to-trustee transfer.

    6. A final Form 5500/5500-EZ must be filed by the end of the 7th month following the last distribution of assets. Until all the assets have been distributed, the plan is not terminated. The final return must indicate zero participants and zero assets left in the plan at the end of the plan year.

    7. A determination letter may be requested from the Internal Revenue Service. Filing Form 5310 (with the applicable user fee) for a determination letter attesting to the qualification status of the plan document at the time of the termination is OPTIONAL. While plans are not required to do this, filing Form 5310 can give the plan sponsor assurance that the plan document is in compliance with the latest applicable retirement plan law.

    8. Additional information can be obtained from the IRS' Web site at www.irs.gov.

  2. A participant may ask,"Since my plan is terminated, why can't I get my money?"

    1. If EDS/TEDS has a record of a Form 5310, inform the customer of the following: When a plan has formally terminated and submitted a Form 5310, Application for Determination for Terminating Plan, the Service reviews the application in an expedient manner. However, on many occasions, there are questions raised which need to be addressed before a favorable letter is issued. Also, the employer or trustee is not required to hold the assets until a favorable determination letter is issued, but usually will do so as a safety feature to ensure that distributions will receive the favorable tax treatment to which qualified plan distributions are entitled.

      Note:

      The Service does not maintain or hold the assets during the termination process.

    2. For all plans, explain when assets in the plan are required to be distributed after the plan has terminated. Generally, an employer is required to distribute assets from a terminated plan as soon as it is "administratively feasible" after the date of plan termination. Whether distributions are made as soon as it is administratively feasible is determined under all the facts and circumstances of a given case, such as the time taken by the Service to process and review an application for a determination letter covering a terminating plan, but generally the Internal Revenue Service views this to mean within one year after plan termination (Rev. Rul. 89-87).

21.3.8.13.6  (10-01-2008)
Requests for Copies of EP Determination Letters

  1. When an authorized caller (or an unauthorized caller on plans with 26 or more participants) requests a copy of a previously-issued application acknowledgement letter, 835, 1132, or 2002 determination letter, or the caller states a correction to a determination letter is needed, advise the caller to send the request either by:

    FAX 513–263–4330

    OR mail

    Regular Postal Delivery
    Internal Revenue Service
    Room 4024
    PO Box 2508
    Cincinnati, OH 45201

    Express and Overnight Delivery
    Internal Revenue Service
    Room 4024
    550 Main Street
    Cincinnati, OH 45202

  2. See IRM 21.3.8.4.3.2, " EP Public Inspection of Determination Letters/Applications," if the caller is unauthorized.

  3. Average time frame for reprint requests is 2 - 3 weeks and for corrected letters is 45 days.

  4. If the caller is requesting a corrected letter, tell him to include in his request:

    • A copy of the letter needing correction

    • The amendment in question

    • The fax number to which the corrected letter should be sent (See IRM 11.3.1.10, "Facsimile Transmission of Tax Information." )

    • A phone number for the requester in case there are questions

  5. If the caller is requesting a copy of a previously-issued letter, tell him to include in his request:

    • The plan sponsor's EIN

    • The plan number

    • The plan name

    • The year the letter was issued (not required, but helpful)

    • A copy of the (updated) Form 2848, if applicable

    • The fax number to which the reprinted letter should be sent (See IRM 11.3.1.10, "Facsimile Transmission of Tax Information." )

      Note:

      If the caller would like a copy of the original letter mailed, he should include that fact in his request. He must include the complete mailing address and, if applicable, the name of the person to whose attention the letter should be sent.

  6. See IRM 21.3.8.4.3.2, " EP Public Inspection of Determination Letters/Applications," for information on requesting copies of approved applications.

21.3.8.13.7  (10-01-2008)
Employee Plans Compliance Resolution System (EPCRS)

  1. The EPCRS is a comprehensive system of correction programs for sponsors of Qualified Plans, 403(b) Plans, SEPs and SIMPLE IRAs that have not met applicable Code requirements for a period of time.

  2. This system permits plan sponsors to correct qualification failures and thereby continue to provide their employees with retirement benefits on a tax-favored basis.

  3. The three components of the EPCRS are:

    • The Self-Correction Program (SCP), which permits plan sponsors to correct certain plan failures without contacting the IRS

    • The Voluntary Correction Program (VCP), which permits a plan sponsor to, any time before audit, pay a limited fee and receive the Service's approval for correction of plan failures, and

    • The Audit Closing Agreement Program (Audit CAP), which permits a plan sponsor to pay a sanction and correct a plan failure while the plan is under audit

  4. Refer callers with general questions about the EPCRS to the IRS Web site. Instruct them to type "EPCRS" into the search window.

  5. Prepare an EP R-Mail referral for callers with technical questions about the EPCRS.

  6. Refer callers with status questions (e.g., Where is my case? To whom has my case been assigned?) about their Voluntary Correction Program (VCP) submissions to (626) 312-4921 (not a toll-free number). They should be prepared to provide the case's nine-digit control number (beginning with "911" ) that is stamped on the case acknowledgment letter, or, if an acknowledgement letter has not been received, the Employer Identification Number and plan number shown on the submission.

    Note:

    The person who monitors the 626 telephone number does not have access to the case file and cannot answer any other types of questions about the case. Any other questions about the case need to be directed to the person to whom or to the office to which the case is assigned. The person who monitors the 626 number voice mail can provide a phone number if the caller needs additional information on his/her case.

21.3.8.14  (10-01-2007)
Section 527 Organizations

  1. This section serves as a guide for performing tasks involved in addressing general section 527 related issues.

  2. What are Political Organizations? A political organization is a party, committee, association, fund or other organization (whether or not incorporated), organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures for an "exempt function."

  3. Exempt Function:"Exempt function " includes all activities that are directly related to and support the process of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, state, or local public office or office in a political organization or the election of Presidential or Vice Presidential electors, whether or not such individuals or electors are selected, nominated, elected or appointed.

  4. Tax on Political Organizations: IRC 527 provides tax treatment for political organizations.

    • Generally, political organizations are treated as exempt organizations under 527.

    • Contributions and dues collected by a permissible 501(c) organization, are not taxed if segregated for use only for an IRC 527 exempt function in a separate fund. This separate fund is treated as a separate 527 organization.

    • Investment income of a political organization, such as interest income, is subject to tax.

  5. IRC 501(c) Organizations: IRC 527(f) provides an IRC 501(c) organization is subject to tax if it spends any amount for an "exempt function."

    • IRC 501(c) organizations are taxed under IRC 527 only on their exempt function expenditures or their net investment income, whichever is less.

    • IRC 527(f)(3) provides IRC 501(c) organizations may create a separate segregated fund taxed as a political organization and avoid the application of IRC 527(f) when exempt function activity is not inconsistent with an IRC 501(c) organization's exempt status.

    Note:

    IRC 527 does not affect the prohibition against campaign intervention by IRC 501(c)(3) organizations, or the application of IRC 4945 to private foundations.

  6. A tax exempt political organization gives notices under 527(i) (filing Form 8871) or is not required to give notice because it meets one of the exceptions under 527(i)(5) and (6). Political organizations that are not required to give notice under 527(i)(5) and (6) to be tax exempt are the following:

    • Any person required to report under the Federal Election Campaign Act of 1971 (FECA) as a political committee (see 2 U.S.C. subsection 431(4))

    • Any political committee of a state or local candidate

    • Any state or local committee of a political party, or

    • Any organization that reasonably anticipates that its annual gross receipts will always be less than $25,000

    Note:

    Any organization described in IRC 501(c) that is subject to IRC 527(f)(1) because it has made an "exempt function" expenditure, is not required to give notice under 527(i).

  7. A non-tax exempt political organization is a political organization that has not given timely notice under 527(i) (if it does not meet one of the exceptions in 527(i)(5) or (6)). Without timely notice under 527(i) that it was established, the political organization is taxable for any period beginning with the establishment of the organization and ending on notice of the establishment of the organization. Without timely notice under 527(i) of a material change, the political organization is also taxable for the period beginning on the date on which the material change occurs and ending on the date on which notice is given.

  8. Disclosure Requirements for tax exempt 527's:

    1. Under 6104(d)(1)(A), tax exempt section 527 organizations must make Forms 8871, 8872, and 990 (not Form 1120-POL) publicly available for inspection and copying at their principal place of business in the same manner as applications for exemption for section 501(c) organizations are made available. The IRS also posts Forms 8871, Forms 8872 and Forms 990 on its Web site at www.irs.gov/polorgs.

    2. Under section 6652(c)(1)(C), a penalty of $20 per day will be imposed on any person who fails to comply with the public inspection requirement of Form 990, Form 8871, and Form 8872 for each day the failure continues, with a maximum penalty of $10,000.

  9. Summary of Form Filing Requirements:

    Form When Filed Exceptions to Filing Requirement
    8871 Within 24 hours of establishment or within 30 days of any material change, including termination

    • Organization that does not seek tax-exempt status;

    • Political committee required to report to the FEC;

    • Campaign committee of state and local candidates;

    • State or local committee of political parties; and

    • Organization that reasonably expects its annual gross receipts to always be less than $25,000.

    8872 At organization's option, quarterly/semi-annually or monthly, on the same basis for the entire calendar year (see form instructions for detailed information)

    • Any organization excepted from Form 8871 filing requirements; and

    • Qualified state or local political organization (QSLPO).
    1120–POL Due the 15th day of the 3rd month after the close of the taxable year Political organization with no taxable income after taking the $100 specific deduction.
    990 or 990-EZ Due the 15th day of the 5th month after the close of the taxable year

    • Any organization excepted from Form 8871 filing requirement (see above); and

    • Caucus or association of state or local officials.

21.3.8.14.1  (10-01-2008)
Form 8871, Political Organization Notice of Section 527 Status

  1. Legislation adopted in 2002 altered filing requirements for certain political organizations that seek tax-exempt status under section 527 of the IRC. The new law generally reduces filing requirements for certain state/local political organizations that already disclose certain information to state agencies. In addition, the law relieves some political organizations from filing an annual income tax return or an annual information return. The revised filing requirements are retroactive to July 1, 2000.

  2. As a general rule, any political organization (whether or not separately incorporated) that is organized and operated primarily for an exempt function under section 527(e)(2) must give notice to the Service to be tax-exempt by electronically filing Form 8871 unless it meets one of the exceptions identified in (d) below.

  3. Political organizations must use Form 8871, Political Organization Notice of Section 527 Status, to notify the IRS that the organization is to be treated as a tax-exempt section 527 organization. The IRS is required to make publicly available on the Internet and at its offices a list of the organizations that file Form 8871 (including the organization's mailing address, E-mail address, custodian of records, and contact person shown on Form 8871).

  4. Under section 527(i)(5) and section 527(i)(6), every political organization must file Form 8871 to be tax-exempt, except for the following:

    • Any person required to report under the Federal Election Campaign Act of 1971 (FECA) as a political committee

    • Any political committee of a state or local candidate

    • Any state or local committee of a political party

    • Any organization that reasonably anticipates its annual gross receipts will always be less than $25,000, and

    • Any organization described in section 501(c) that is subject to section 501(f)(1) because it has made an "exempt function" expenditure

  5. Under section 527(i)(3), an organization must provide in its Form 8871 the following:

    • Organization's name

    • Organization's address (including any business address, if different)

    • Organization's Electronic mailing address (E-mail address)

    • Organization's purpose

    • Names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its Board of Directors

    • Name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4))

    • Whether it is claiming an exemption from filing Form 8872 as a qualified state or local political organization (within the meaning of section 527(e)(5)) or from filing Form 990 as a caucus or association of state or local officials

  6. Highly-compensated employees for this purpose, are the five employees (other than officers and directors) who are reasonably expected to have the highest annual compensation over $50,000. Annual compensation includes both cash and non-cash amounts, whether paid currently or deferred, for the 12-month period that began with the date the organization was formed (if the organization was formed after June 30, 2000). If the organization was formed after June 30, 2000, it must use the accounting period that included July 1, 2000.

  7. A related entity, within the meaning of section 168(h)(4), provides the two entities have (i) significant common purposes and substantial common membership or (ii) directly or indirectly substantial common direction or control; or either entity owns (directly or through one or more entities) a 50 percent or greater interest in the capital or profits of the other. For this purpose, the entities are treated as one entity.

  8. Qualified State or Local Political Organizations (QSLPO) - a state or local organization may be a QSLPO, if it meets all of the following criteria:

    • All of its exempt function political activities relate solely to state or local public office (or office in a state or local political organization).

    • It is subject to state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS on Form 8872. The organization will meet this requirement so long as at least the following information is required to be reported under the state law and is reported by the organization: The name and address of every person who contributes $500 or more in the aggregate to the organization during the calendar year and the amount of each contribution; the name and address of every person to whom the organization makes expenditures aggregating $800 or more during the calendar year, and the amount of each expenditure; the organization makes the reports filed with the state agency publicly available in the manner described in 6104(d).

    • The state agency and the organization make the reports publicly available

    • No Federal candidate or office holder controls it or materially participates in its direction, solicits contributions for it, or directs any of its disbursements.

  9. A caucus or association of state or local political officials is a group of state or local officials attempting to influence the "selection process" . Such a caucus or association may qualify as a QSLPO, if it meets the QSLPO requirements.

21.3.8.14.1.1  (10-01-2008)
Form 8871 Due Dates to Establish or Return Tax-Exempt Status

  1. A newly-established political organization is not required to file Form 8871 if it reasonably anticipates that its annual gross receipts will be less than $25,000 for its first six taxable years. It is required to file Form 8871 within 30 days of receiving $25,000 in a single taxable year.

  2. IRC 527(i)(1)(A) requires a 527 organization to file Form 8871 electronically within 24 hours of the date on which the organization was established if the organization anticipates $25,000 or more in annual gross receipts for its first six taxable years.

  3. For a 527 political organization formed between June 30 and November 1, 2002, Form 8871 must be filed both electronically and by paper within 24 hours of the date on which the organization was established if the organization anticipates $25,000 or more in annual gross receipts for its first six taxable years.

  4. If the organization has a material change in any of the information reported on Form 8871, it must file an amended electronic Form 8871 within 30 days of the material change.

    Note:

    The organization is not required to file a Form 8453-X with the associated amended Form 8871.

  5. If an organization terminates its existence, it must file a final Form 8871 within 30 days of termination.

  6. If the due date falls on a Saturday, Sunday, or legal holiday, the organization may file the report on the next business day.

  7. Tax applies to organizations that do not file timely Forms 8871: Until the organization files Form 8871, its income (including contributions) is subject to taxation. Under section 527(b). The tax is computed by multiplying the organization's taxable income (including its net investment income) by the highest corporate tax rate, currently 35 percent. The organization must file a Form 1120–POL to report the income and pay the tax.

21.3.8.14.1.2  (10-01-2008)
How to File Form 8871

  1. Section 527(i)(1)(A) requires that the organization file Form 8871 electronically via the IRS Web site at www.irs.gov/polorgs.

  2. Before filing Form 8871, the political organization must have its own Employer Identification Number (EIN), even if it has no employees. See IRM 21.3.8.9.1, Establishing/Re-establishing Entities on Master File, for additional information.

  3. If the organization entered an invalid EIN when filing the electronic version of Form 8871, a listing generates to the Entity unit in Ogden. Entity researches for a valid EIN and notifies the organization of the EIN that was located or assigned.

    Note:

    See IRM 21.3.8.14.1.1 , "Form 8871 Due Dates to Establish or Return Tax-Exempt Status," if the organization was formed prior to November 2, 2002.

21.3.8.14.1.3  (10-01-2008)
Fact of Filing Form 8871

  1. Both the electronic Form 8871 and the Form 8453-X post to Master File. The fact of filing may be verified by researching BMFOLT under MFT 47 using the tax year that the form was filed.

    • TC 971 AC 350 indicates a Form 8871/amended Form 8871 has been filed electronically.

    • TC 971 AC 351 indicates a Form 8453-X authentication of Form 8871 has been filed.

    • TC 972 AC 350/351 indicates the electronic/paper fact of filing has been reversed from the account.

      Note:

      There can be multiple TC 971 AC 350/351s on an account. If the form was filed after December 31, 2005, it posts as a TC 150.

  2. An imaged copy of the processed Form 8871 is also available to research on the Web at www.irs.gov/polorgs.

21.3.8.14.2  (10-01-2006)
Form 8453-X, Political Organization Declaration for Electronic Filing of Notice 527 Status

  1. As of November 2, 2002, Form 8871 must be filed within 24 hours of formation in electronic format only. Upon completion of the filing, Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of section 527 Status, will automatically appear for the new political organization to fill out and complete. This form contains the signature for the electronically filed Form 8871. If Form 8453-X is not submitted within 60 days of the filing, Ogden will issue a letter requesting the form. The form must be sent to the following address:

    Sent via US Postal Service Sent via private delivery service (e.g., UPS, Fed Ex, etc.)
    Internal Revenue Service
    Ogden, UT 84201     		Internal Revenue Service
    1973 N Rulon White Blvd
    Ogden, UT 84404

    Note:

    If Form 8453-X is submitted without a signature, the signature page of the form will be returned to the organization with a request for a signature.

21.3.8.14.3  (10-01-2008)
Form 8872, Political Organization Report of Contributions and Expenditures

  1. Political organizations must use Form 8872, Political Organization Report of Contributions and Expenditures, to report certain contributions received and expenditures made after July 1, 2000 (unless otherwise excluded). The reports are to be made periodically during the year with due dates depending on various factors explained in the following tridocs and in the instructions to the form.

21.3.8.14.3.1  (10-01-2008)
Who Must File Form 8872 and When Is It Due?

  1. Who must file:

    1. Under section 527(j)(2), every tax-exempt political organization filing Form 8871 (other than QSLPOs) that accepts contributions or makes expenditures for an exempt function under section 527 during a calendar year must file electronic or paper periodic reports on Form 8872, Political Organization Report of Contributions and Expenditures, beginning with the first month or quarter in which it accepts contributions or makes expenditures. If the organization is required to, but fails to file the Form 8872 timely and by the appropriate method, it is subject to the tax under 527(j).

    2. Effective June 30, 2003, Form 8872 must be filed electronically if the political organization has reason to expect that contributions or expenditures will exceed $50,000 in a calendar year.

    3. A section 527 political organization that files a Form 8871 also files a Form 8872 to report contributions received and expenditures made.

    4. A political organization is not required to file Form 8872 for any period of time that it is subject to tax on its income because it did not file or amend a Form 8871.

  2. The filing requirements for Form 8872 depend on whether the form is being filed during a non-election year or during an election year.

  3. Refer to the following table to determine the filing requirements for Form 8872:

    Form 8872 Filing Requirements Filing Frequency Due Date
    A non-election year (odd numbered) Monthly basis No later than the 20th day after the end of the month and must include the figures for the entire month. December activity is included in a year-end report that is due no later than January 31 of the following year.
    Semi-Annual basis • No later than July 31st for the first half of the year, and
    • No later than January 31st for the second half of the year.
    An election year (even-numbered) Monthly basis No later than the 20th day after the end of the month and must include the figures for the entire month. Any pre-election report, if filed in lieu of a report, is due in November, and any post-election report, if filed in lieu of a report, is due in December. December activity is included in a year-end report that is due no later than January 31 of the following year.
    Quarterly basis • No later than the 15th day after the last day of the quarter, and
    • No later than January 31st of the following year for the final quarter.
    Pre-election report for any election for Federal office for which the organization makes a contribution or expenditure. Must be filed 12 days before the general election (15 days before the election if posted by registered or certified mail) and must contain information through the 20th day before the election.
    Post-general election report Must be filed no later than 30 days after the general election and must contain information through the 20th day after the election.

  4. An organization that accepts a contribution, or makes an expenditure for an exempt function in any taxable year, files Form 8872 electronically or by paper except:

    • A political organization that is not required to file Form 8871 ( See IRM 21.3.8.14.1, "Form 8871, Political Organization Notice of Section 527 Status."

    • A political organization that is subject to tax on its income because it did not file or amend a Form 8871, or

    • A qualified state or local political organization ( See IRM 21.3.8.14.1, "Form 8871, Political Organization Notice of Section 527 Status."

  5. An organization that originally did not file Form 8871 upon formation, but subsequently files Form 8871 due to receiving $25,000, must also file, within 30 days of receiving $25,000, any Form 8872 that would otherwise have been due during the calendar year prior to that date.

  6. All reports must include the following for any person to whom expenditures are made that aggregate $500 or more in a calendar year:

    • Name

    • Address

    • Occupation and employer (if an individual)

    • Amount, date and purpose of each expenditure

  7. The reports must also include the following for any person that contributes the aggregate of $200 or more in a calendar year:

    • Name

    • Address

    • Occupation and employer (if an individual)

    • Amount and date of each contribution

  8. An organization is not required to report independent expenditures as defined in section 301 of FECA. An independent expenditure is an expenditure by a person expressly advocating the election or defeat of a clearly-identified candidate for Federal office that is made without cooperation or consultation with any candidate for Federal office or any authorized committee or agent of such candidate and that is not made in concert with, or at the request or suggestion of, any candidate for Federal office or authorized committee or agent of such candidate.

  9. If the due date falls on a Saturday, Sunday, or legal holiday, the organization may file the report on the next business day.

  10. Tax applies to organizations that do not file timely Forms 8872. A political organization that does not file the required Form 8872, or fails to include required information, must pay an amount calculated by multiplying the amount of the contributions and expenditures not disclosed, by the highest corporate tax rate, currently 35 percent.


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