IRS revamps application for 501(c)4 tax-exempt status

The Internal Revenue Service issued a revised Form 1024-A application Tuesday for tax-exempt status under Section 501(c)4 of the Tax Code, along with instructions permitting it to be filed electronically.

The move is part of the agency’s ongoing efforts to expand the range of forms that can be filed electronically. Last year, soon after the start of the coronavirus pandemic, the IRS began allowing more forms and correspondence to be e-filed by taxpayers and tax professionals. With the IRS’s offices closed in the middle of the extended tax season last year, millions of pieces of correspondence accumulated at IRS facilities. The agency is still processing them even as many employees began returning last spring. This year, e-filing has been extended and expanded to encompass more forms, and the IRS has also opened up secure fax lines and allowed for more email correspondence.

The issue of 501(c)4 status has been a politically fraught one in recent years after a scandal erupted in 2013 over the delayed recognition of applications for tax-exempt status from some Tea Party, conservative and progressive groups ahead of the 2012 election, leading to the ouster of several top IRS officials. That may explain why the IRS didn't release substantial changes in the 501(c)4 application form until after the 2020 election season.

"Electronic filing will make the Form 1024-A application easier to complete while reducing errors," said Edward Killen, acting commissioner of the IRS Tax Exempt and Government Entities Division, in a statement Tuesday. "Electronic filing also shortens IRS processing time so applicants won’t wait as long for a response."

Andrew Harrer/Bloomberg

Starting Tuesday, the IRS will make the electronic version of the Form 1024-A available online at Pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 1024-A (Rev. 01-2018); however, after April 5 the Form 1024-A will need to be submitted electronically.

The required user fee for Form 1024 will stay at $600 for 2021. Applicants need to pay the fee through Pay.gov when sending in the form. Payments can be made directly from a bank account or via credit or debit card.

For more information on how to apply for IRS recognition of tax-exempt status, visit the Applying for Tax-Exempt Status page on IRS.gov or check out the Form 1024-A Electronic Filing Overview presentation on StayExempt.irs.gov.