No doubt about it: The future for the IRS is electronic.
The agency is putting more and more formerly paper-only functions on its electronic platform, speeding up transmission and improving service as a result.
Form 1024, Application for Recognition of Exemption under Section 501(a) or Section 521 of the Internal Revenue Code, is the latest function to transition into the electronic world.
Previously, the only way non-profit organizations could use Form 1024 to apply for tax-exempt status was by submitting the paper form.
That is now changing.
As of January 3, submissions of Form 1024 must now be done online at PAY.gov.
However, the IRS is also offering a 90-day grace period that also allows paper submissions of Form 1024 (Rev. 01-2018) and letter applications. But once that passes, filing will be electronic-only.
“Electronic filing makes it easier to complete an application for tax-exempt status while reducing errors,” said Sunita Lough, Commissioner of the IRS Tax Exempt and Government Entities division. “Electronic filing also shortens IRS processing time so applicants won’t wait as long for a response.”
The electronic revised Form 1024 can also be used by organizations to request a determination under Section 521 instead of using Form 1028, Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code.
The IRS says there are other changes, depending on which sections of code are used to claim exemption.
Electronic transmission of Form 1024, however, doesn’t mean that submitting the form is any cheaper. The required user fee is still $600 for 2022, payable through PAY.gov when the form is submitted.
The site accepts payments directly from a bank account as well as debit and credit cards.
For more information on how to apply for tax-exempt status, check out Revenue Procedure 2022-8 and Applying for Tax-Exempt Status on IRS.gov.