On July 8, 2016, the IRS issued final and temporary regulations and published Revenue Procedure 2016-41 relating to the immediately effective requirement that organizations notify the IRS of their intent to operate under section 501(c)(4) of the Internal Revenue Code (“IRC”).
Form 8976, “Notice of Intent to Operate Under Section 501(c)(4),” is the electronic notification required to be submitted to the IRS no later than 60 days after the date the organization is organized (e.g., its date of incorporation). Form 8976 is available for completion and submission here. A draft of the Form is available download here.
The new rules are the result of the Protecting Americans from Tax Hikes (“PATH”) Act of 2015, which added section 506 to the Internal Revenue Code, requiring an organization to notify the IRS that it is operating as a section 501(c)(4) organization. The PATH Act also amended IRC section 6652(c) to impose penalties for failure to submit Form 8976 by the date and in the manner prescribed. The penalty is equal to $20 per day for each day such failure continues, up to a maximum of $5,000.
The notification requirement generally applied to organizations formed after December 18, 2015, but there were transition relief provisions to reflect the absence of regulations until July 8. According to Journal of Accountancy:
Organizations that were established between Dec. 18, 2015, and July 8, 2016, that either applied for a determination of tax-exempt status or filed at least one required annual return or notice (Form 990 series) are relieved from the notification requirement. Organizations formed during that interim period that do not qualify for that relief have until Sept. 6 to submit the notification.