DEPARTMENT OF THE TREASURY MEMORANDUM FOR EO PROCESSING AND EO DETERMINATIONS

Transcription

1 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE WASHINGTON, DC TAX EXEMPT AND GOVERNMENT ENTITIES DIVISION MEMORANDUM FOR EO PROCESSING AND EO DETERMINATIONS TO CC FROM: SUBJECT: Kathie D. Averett, Manager, Exempt Organizatins, Cmpliance Area Cindy M. Thmas, Manager, Exempt Organizatins, Determinatins Pam Walker, Directr, Wage and Investment, Submissin Prcessing Patty Strey, Prgram Manager, Wage and Investment, Planning and Analysis Operatins Sherry Whitaker, Manager, Exempt Organizatins, Submissin Prcessing Prgrams Rbert S. Chi, Directr, Exempt Organizatins, Rulings & Agreements Nanette M. Dwning, Directr, Exempt Organizatins, Examinatins Limited Filing Relief Prgrams: Extensin f Time t File fr 990-N Filers Vluntary Cmpliance Prgram fr 990-EZ Filers This Internal Directive relates t the prvisin f limited relief fr certain tax-exempt rganizatins required t file an annual infrmatin return r submit a ntice under 6033(a)(1) r 6033(i) f the Internal Revenue Cde and that failed t d s fr three cnsecutive years. The Pensin Prtectin Act f 2006 added a requirement that tax-exempt rganizatins that nrmally have grss receipts f $25,000 r less submit an electrnic return r ntice. The new law als required that any tax-exempt rganizatin that fails t file a return r ntice fr three cnsecutive years autmatically lses its federal tax-exempt status. These prvisins became effective fr returns and ntices fr tax years beginning in Exempt Organizatins cnducted an unprecedented utreach effrt t the tax-exempt sectr, but we realize there is a great deal f cnfusin cncerning the changes t the annual reprting requirements made by the PPA, and many small rganizatins were unaware they

2 culd lse their exempt status if they fail t fr three cnsecutive years. T address this, the 2 Internal Revenue Service tday annunced tw Limited Filing Relief Prgrams: (1) an Extensin f Time t File fr Organizatins Eligible t Submit Frm 990-N and (2) a Vluntary Cmpliance Prgram fr Organizatins Eligible t File Frm 990-EZ. Exempt rganizatins nt eligible t submit Frm 990-N r file Frm 990-EZ (i.e., thse required t file Frm 990 and Frm 990-PF filers) are nt eligible fr these Limited Filing Relief Prgrams. EXTENSION OF TIME TO FILE FOR ORGANIZATIONS ELIGIBLE TO SUBMIT FORM 990-N Prerequisites Eligible t submit Frm 990-N fr its 2009 tax year; Failed t file an annual infrmatin return r submit a ntice fr tax years 2007, 2008 and 2009; and 2009 Frm 990-N due n r befre May 17, 2010, June 15, 2010, July 15, 2010, August 16, 2010, September 15, 2010 r Octber 15, Terms f Filing Relief An Exempt Organizatin that meets the prerequisites will nt be autmatically revked under 6033(j) if the rganizatin: Submits the 2009 Frm 990-N nline by Octber 15, 2010; r Files paper 2009 Frm 990-EZ r Frm 990 in lieu f submitting Frm 990-N by Octber 15, Organizatins filing paper returns have been instructed t write Filed in lieu f Frm 990-N n tp f the return and envelpe (pstmarked n later than Octber 15, 2010) and mail it t: Internal Revenue Service M/S 1114 PO Bx Ogden, UT 84412

3 Prcessing Guidelines fr Filing Relief 3 Input required data in the FAST tracker. If a paper Frm 990-EZ r Frm 990 is received, cnfirm: The rganizatin meets the prerequisites; The return is cmplete. If the return is cmplete, send the return t Receipt and Cntrl. If the paper return is nt cmplete, fllw the prcedures fr incmplete returns prvided under Prcessing Guidelines fr VCP, belw. VOLUNTARY COMPLIANCE PROGRAM (VCP) FOR ORGANIZATIONS ELIGIBLE TO FILE FORM 990-EZ Prerequisites: Eligible t file a Frm 990-EZ r submit a Frm 990-N fr each f tax years 2007, 2008 and 2009; Failed t file an annual infrmatin return r ntice fr tax years 2007, 2008 and 2009; and 2009 Frm 990-EZ due n r befre May 17, 2010, June 15, 2010, July 15, 2010, August 16, 2010, September 15, 2010 r Octber 15, Terms f VCP An Exempt Organizatin that meets the prerequisites will nt be autmatically revked under 6033(j) if the rganizatin submits: Cmplete Frms 990-EZ r (at its ptin) Frms 990 fr each f tax years 2007, 2008 and 2009 by Octber 15, 2010; Cmplete Vluntary Cmpliance Prgram Checklist, agreeing t the terms f the VCP, signed by an fficer r representative; Check fr the crrect cmpliance fee (described belw) payable t U.S. Treasury. Organizatins have been instructed t write Filing Relief VCP n tp f each return and the

4 envelpe (pstmarked n later than Octber 15, 2010) and mail all f the abve t: Cmpliance Fee Schedule 4 EOCA M/S 1114 PO Bx Ogden, UT The amunt f the cmpliance fee, which is in lieu f certain penalties, taxes and interest fr failing t file an annual return, fr rganizatins participating in the VCP, is based n the fllwing fee schedule: If the rganizatin s grss receipts, as reprted n its 2009 infrmatin return, are The cmpliance fee is $100,000 r less $100 $100,001 t $200,000 $200 $200,001 t $499,999 $500 Prcessing Guidelines fr VCP Depsit checks within 24 hurs. Input required data in the FAST tracker. Review package t ensure: The rganizatin meets the VCP prerequisites; The returns are cmplete; and The cmpliance fee check is fr the crrect amunt. If package is in rder: Send the returns t Receipt and Cntrl (write Filing Relief VCP n tp f each return if the rganizatin did nt already d s); and Send Acceptance letter t rganizatin. If package is nt in rder: Cpy the returns (stamp Cpy D Nt Prcess n tp f each) and checklist; Send Rejectin letter alng with riginal package t rganizatin; and

5 5 Request a refund f the cmpliance fee be sent t the rganizatin. AUTOMATIC REVOCATION AND REINSTATEMENT PROCEDURE Organizatins that are nt eligible fr, r d nt participate in, the Limited Filing Relief Prgrams are autmatically revked as f the riginal due date f their 2009 annual return r ntice. Hwever, dnrs may rely n an rganizatin s determinatin letter r its listing in Publicatin 78 until the IRS publishes n its website the name f the revked rganizatin. Organizatins will nt be remved frm Publicatin 78 until the IRS publishes the revcatin list in early Regaining Tax Exempt Status An rganizatin that is autmatically revked, must: Cmplete an applicatin (e.g., Frm 1023 r Frm 1024) fr reinstatement, regardless f whether the rganizatin was riginally required t make such an applicatin; Pay the applicable user fee; Send the cmpleted applicatin and the user fee t: Internal Revenue Service P.O. Bx Cvingtn, KY Organizatins have been instructed t write Autmatically Revked n tp f the applicatin. Effective Date f Reinstated Tax Exempt Status If the IRS apprves the applicatin fr reinstatement: The effective date f an rganizatin s reinstated tax-exempt status is the date the rganizatin filed its applicatin. If the rganizatin wishes t request its tax-exempt status be effective retractive t the date f revcatin: It must submit a letter setting frth a detailed explanatin f the rganizatin s reasnable cause fr failing t file fr three cnsecutive years. The IRS must review the explanatin and determine whether it meets the

6 reasnable cause standard fr the three year perid. 6