Treasury and IRS issue proposed regulations and provide relief for certain tax-exempt organizations

Written on Sep 10, 2019

The IRS has issued proposed regulations clarifying the reporting requirements generally applicable to tax-exempt organizations.

The proposed regulations reflect statutory amendments and certain grants of reporting relief announced by the Treasury Department and the IRS in prior guidance to help many tax-exempt organizations generally find the reporting requirements in one place.

Among other provisions, the proposed regulations incorporate the existing exception from having to file an annual return for certain organizations that normally have gross receipts of $50,000 or less, which is found in Revenue Procedure 2011-15. The regulations also incorporate relief from requirements to report contributor names and addresses on annual returns filed by certain tax-exempt organizations, previously provided in Revenue Procedure 2018-38. A recent court decision held that the Treasury Department and the IRS should have followed notice and comment procedures in 2018 when announcing this relief with respect to providing contributor names and addresses, and these regulations provide the opportunity for notice and comment on that relief as well as on other proposed updates to existing regulations.

Under the proposed regulations, filing requirements for Section 501(c)(3) organizations and Section 527 political organizations remain unchanged, and all organizations are required to keep the contributor information and make it available to the IRS upon request.

Treasury and IRS welcome public comments on all aspects of these proposed regulations. For details on submitting comments, see the proposed regulations. The regulations propose to allow tax-exempt organizations to elect to apply the regulations to returns filed after Sept. 6, 2019.

Additionally, the IRS issued Notice 2019-47 providing penalty relief for certain exempt organizations that, consistent with the 2018 guidance from the IRS, do not report the names and addresses of contributors on annual returns for tax years ending on or after Dec. 31, 2018, but on or before July 30, 2019.

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