New filing processes are in effect for Form 8940
Tax exempt organizations use Form 8940, Request for Miscellaneous Determination, to request determinations (other than the initial exemption applications) regarding their tax-exempt status. The form must also be used to obtain advanced approval of the following types of requests:
- Advanced approval of private foundation scholarship procedures.
- Advanced approval of certain private foundation set-asides.
- Advanced approval of private foundation voter registration activities.
- Exemption from Form 990 filing requirements.
- Advanced approval that a potential grant or contribution is “unusual” and can be excluded from the public support test.
- Change in type of a Section 509(a)(3) supporting organization.
- Reclassification of foundation status, including a voluntary request from a public charity for private foundation status.
- Termination of private foundation status by operating as a public charity.
What changes should not-for-profit organizations be aware of?
The IRS recently announced several much-needed changes to Form 8940 to make the process more modern, streamlined, and efficient. According to Revenue Procedure 2023-12, the Form 8940 must be electronically filed exclusively as of April 4, 2023. The IRS had provided an initial 90-day grace period for paper filing the Form 8940, that ended on July 3, 2023. The electronically filed Form 8940’s must be submitted via Pay.gov.
In addition to the exclusive electronic filing, the IRS broadened the use of the Form 8940 to require the following activities be submitted:
- Requests from government entities to voluntarily relinquish exempt status under Section 501(c)(3).
- Requests by Canadian registered charities to be included in the IRS database of charitable organizations.
The required user fees vary, depending on the type of miscellaneous request submitted and are required to be paid directly from a bank account or by credit card. For 2023, the fees remain the same and can be found in Revenue Procedure 2023-5.
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