81 FR 45088 - Requirement To Notify the IRS of Intent To Operate as a Section 501(c)(4) Organization

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 81, Issue 133 (July 12, 2016)

In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations relating to the requirement, added by the Protecting Americans from Tax Hikes Act of 2015, that organizations must notify the IRS of their intent to operate under section 501(c)(4) of the Internal Revenue Code (Code). The text of those temporary regulations also serves as the text of these proposed regulations.

[Federal Register Volume 81, Number 133 (Tuesday, July 12, 2016)]
[Proposed Rules]
[Pages 45088-45089]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16337]



[[Page 45088]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-101689-16]
RIN 1545-BN25


Requirement To Notify the IRS of Intent To Operate as a Section 
501(c)(4) Organization

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

-----------------------------------------------------------------------

SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the requirement, added by the Protecting Americans from Tax Hikes Act 
of 2015, that organizations must notify the IRS of their intent to 
operate under section 501(c)(4) of the Internal Revenue Code (Code). 
The text of those temporary regulations also serves as the text of 
these proposed regulations.

DATES: Comments and requests for a public hearing must be received by 
October 11, 2016.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-101689-16), room 
5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
101689-16), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC, or sent electronically via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS REG-101689-16).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Chelsea Rubin at (202) 317-5800; concerning submission of comments and 
request for hearing, Regina Johnson at (202) 317-6901 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking will be reviewed and, pending receipt and evaluation of 
public comments, approved by the Office of Management and Budget under 
control number 1545-2268 in accordance with the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information 
should be sent to the Office of Management and Budget, Attn: Desk 
Officer for the Department of the Treasury, Office of Information and 
Regulatory Affairs, Washington, DC 20503, with copies to the Internal 
Revenue Service, Attn: IRS Reports Clearance Officer, 
SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of 
information should be received by September 12, 2016.
    The collection of information is in Sec.  1.506-1T(a)(2). The 
likely respondents are organizations described in section 501(c)(4) of 
the Code (section 501(c)(4) organizations). The collection of 
information in Sec.  1.506-1T(a)(2) flows from section 506(b) of the 
Code, which requires a section 501(c)(4) organization to submit a 
notification including the following items of information: (1) The 
name, address, and taxpayer identification number of the organization; 
(2) the date on which, and the state under the laws of which, the 
organization was organized; and (3) a statement of the purpose of the 
organization. The temporary regulations provide that the notification 
must be submitted on Form 8976, ``Notice of Intent to Operate Under 
Section 501(c)(4),'' or its successor. In addition to the specific 
information required by statute, the temporary regulations require that 
an organization provide any additional information that may be 
specified in published guidance in the Internal Revenue Bulletin or in 
other guidance, such as forms or instructions, issued with respect to 
the notification. Form 8976 requires an organization to provide its 
annual accounting period to ensure that the statutorily-required items 
of information in the notification are correlated accurately within 
existing IRS systems. The burden for the collection of information in 
Sec.  1.506-1T(a)(2)(i) through (iv) associated with the one-time 
submission of the notification will be reflected in the burden estimate 
for Form 8976.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
return information are confidential, as required by 26 U.S.C. 6103.

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register contain amendments to the Income Tax 
Regulations (26 CFR part 1) that provide guidance relating to section 
405 of the Protecting Americans from Tax Hikes Act of 2015 (Pub. L. 
114-113, div. Q), regarding the new requirement that organizations must 
notify the IRS of their intent to operate under section 501(c)(4) of 
the Code. The text of those temporary regulations also serves as the 
text of these proposed regulations and the preamble to the temporary 
regulations explains the relevant provisions.

Statement of Availability of IRS Documents

    For copies of recently issued revenue procedures, revenue rulings, 
notices, and other guidance published in the Internal Revenue Bulletin, 
please visit the IRS Web site at http://www.irs.gov.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory assessment is not 
required. It also has been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to 
these regulations. It is hereby certified that the collection of 
information in these regulations will not have a significant impact on 
a substantial number of small entities. The collection of information 
is in Sec.  1.506-1T(a)(2). The certification is based on the 
following:
    Section 1.506-1T(a)(2) requires the notification to include only a 
few pieces of basic information: (1) The name, address, and taxpayer 
identification number of the organization; (2) the date on which, and 
the state or other jurisdiction under the laws of which, the 
organization was organized; (3) a statement of the purpose of the 
organization; and (4) such additional information as may be prescribed 
by published guidance in the Internal Revenue Bulletin or in other 
guidance, such as forms or instructions, issued with respect to the 
notification.
    These requirements will have a minimal burden on section 501(c)(4) 
organizations submitting the notification, including small section 
501(c)(4) organizations. The notification requires only basic 
information regarding the organization and, as such,

[[Page 45089]]

will require little time to submit. Moreover, the burden on small 
organizations is further minimized because the information is only 
required to be submitted once.
    For these reasons, a Regulatory Flexibility Analysis under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. 
Pursuant to section 7805(f) of the Code, these regulations have been 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in this preamble under the ADDRESSES heading. 
The Treasury Department and the IRS request comments on all aspects of 
the proposed rules. All comments will be available at 
www.regulations.gov or upon request.
    A public hearing will be scheduled if requested in writing by any 
person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the public hearing 
will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Chelsea R. Rubin, 
Office of Associate Chief Counsel (Tax Exempt and Government Entities). 
However, other personnel from the Treasury Department and the IRS 
participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *

    Par. 2. Section 1.506-1 is added to read as follows:


Sec.  1.506-1  Organizations required to notify Commissioner of intent 
to operate under section 501(c)(4).

    [The text of proposed Sec.  1.506-1 is the same as the text for 
Sec.  1.506-1T published elsewhere in this issue of the Federal 
Register].

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2016-16337 Filed 7-8-16; 11:15 am]
 BILLING CODE 4830-01-P