82 FR 29730 - Guidelines for the Streamlined Process of Applying for Recognition of Section 501(c)(3) Status
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 82, Issue 125 (June 30, 2017)
Internal Revenue Service
Federal Register Volume 82, Issue 125 (June 30, 2017)
| Page Range | 29730-29733 | |
| FR Document | 2017-13866 |
[Federal Register Volume 82, Number 125 (Friday, June 30, 2017)] [Rules and Regulations] [Pages 29730-29733] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-13866] ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9819] RIN 1545-BM06 Guidelines for the Streamlined Process of Applying for Recognition of Section 501(c)(3) Status AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations and removal of temporary regulations. ----------------------------------------------------------------------- SUMMARY: This document contains final regulations that allow the Commissioner of Internal Revenue to adopt a streamlined application process that eligible organizations may use to apply for recognition of tax-exempt status under section 501(c)(3) of the Internal Revenue Code (Code). The final regulations affect organizations seeking recognition of tax-exempt status under section 501(c)(3). DATES: Effective Date: These regulations are effective on June 30, 2017. Applicability Dates: For dates of applicability, see Sec. Sec. 1.501(a)-1(f), 1.501(c)(3)-1(h), and 1.508-1(c). FOR FURTHER INFORMATION CONTACT: Peter A. Holiat at (202) 317-5800 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background Since 1969, section 508 of the Code has required an organization seeking tax-exempt status under section 501(c)(3), as a condition of its [[Page 29731]] exemption, to notify the Secretary of the Treasury (or his delegate) that it is applying for recognition of exempt status in the manner prescribed in regulations, unless it is specifically excepted from the requirement. Longstanding regulations under Sec. Sec. 1.501(a)-1, 1.501(c)(3)-1, and 1.508-1 had required all organizations applying for recognition of section 501(c)(3) exempt status to submit a properly completed and executed Form 1023, ``Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,'' (see Sec. 1.508-1(a)(2) as contained in 26 CFR part 1, revised April 1, 2014) and to submit with, and as part of, the application, a detailed statement of its proposed activities (see Sec. Sec. 1.501(a)- 1(b)(1)(iii) and 1.501(c)(3)-1(b)(1)(v) as contained in 26 CFR part 1, revised April 1, 2014). Detailed procedures for applying for recognition of exemption are included in annual revenue procedures and in the instructions for Form 1023. See Sec. 601.601(d)(2)(i)(b). On July 2, 2014, final and temporary regulations (TD 9674) authorizing the Commissioner to adopt a streamlined application process that eligible organizations may use to apply for recognition of tax- exempt status under section 501(c)(3) were published in the Federal Register (79 FR 37630). The final and temporary regulations were effective and applicable on July 1, 2014. The 2014 final regulations removed and reserved certain paragraphs of the longstanding final regulations addressed by corresponding paragraphs of the new temporary regulations. Under the temporary regulations, the IRS instituted the streamlined application process on Form 1023-EZ, ``Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,'' the detailed procedures for which have been provided in annual revenue procedures, most recently in Rev. Proc. 2017-5, 2017-1 IRB 230, and in the instructions for Form 1023-EZ. Also on July 2, 2014, a notice of proposed rulemaking (REG-110948- 14) cross-referencing the temporary regulations and soliciting public comments and requests for a hearing was published in the Federal Register (79 FR 37697). No comments responding to the notice of proposed rulemaking were received, and no public hearing was requested or held. The IRS continues to consider improvements to Form 1023-EZ based on its own experience and informal comments received from the public and other stakeholders on the form, including whether to require applicants to submit a brief statement of actual or proposed activities. Because the proposed regulations contemplate that guidance published in the Internal Revenue Bulletin may prescribe the information required of Form 1023-EZ filers, including regarding their proposed activities, the Department of the Treasury (Treasury Department) and the IRS have concluded that the proposed regulations are sufficiently flexible to allow such a revision to the Form 1023-EZ at a future date, as resources permit. Accordingly, this Treasury decision adopts as final regulations, without substantive change, the proposed regulations set forth in the 2014 notice of proposed rulemaking and removes the corresponding temporary regulations. Explanation of Provisions The Treasury Department and the IRS have considered how the process of meeting the notice requirement of section 508 in seeking recognition of tax-exempt status may be made more efficient for certain smaller organizations. The IRS developed Form 1023-EZ to provide a simplified application form that relies more heavily on attestations by the organization that it meets the section 501(c)(3) organizational and operational requirements, which are explained in the accompanying form instructions. The new form was made available for use by eligible small organizations in July 2014, following the issuance of the temporary regulations and a revenue procedure describing the streamlined application process. The streamlined application process generally allows eligible small organizations to receive IRS determinations of tax-exempt status more quickly and allows the IRS to focus resources on more complex exemption applications and on compliance programs. This Treasury decision adopts the 2014 proposed regulations by amending Sec. Sec. 1.501(a)-1, 1.501(c)(3)-1, and 1.508-1 to authorize the continued use of the IRS' streamlined process by eligible organizations to meet the notice requirements of section 508. Specifically, this Treasury decision amends Sec. Sec. 1.501(a)-1 and 1.501(c)(3)-1, as in effect before July 2, 2014, to authorize the Treasury Department and the IRS to modify, by applicable regulations or other guidance published in the Internal Revenue Bulletin, the requirement that an organization applying for section 501(c)(3) tax- exempt status provide a detailed statement of its proposed activities. This document also amends the Sec. 1.501(a)-1 provisions relating to the Commissioner's ability to revoke a determination because of a change in the law or regulations, or for other good cause, to reference the Commissioner's authority to retroactively revoke a determination under section 7805(b). No substantive change is intended by this amendment. This Treasury decision also amends the requirement in Sec. 1.501(a)-1(b)(3) that an organization claiming to be exempted from filing annual returns file a statement supporting its claim with and as a part of its application. As amended, Sec. 1.501(a)-1(b)(3) allows an organization to file the statement either in its application, or in a manner prescribed in guidance published in the Internal Revenue Bulletin. See Rev. Proc. 2017-5 for rules for filing this statement on Form 8940, ``Request for Miscellaneous Determinations.'' In addition, this document amends Sec. 1.508-1 to provide that eligible organizations may use Form 1023-EZ to notify the Commissioner of their applications for tax-exempt status under section 501(c)(3). This Treasury decision also amends Sec. Sec. 1.501(a)-1 and 1.508-1 to state that the office to which applications should be submitted will be published in the Internal Revenue Bulletin or instructions to the Form 1023 or Form 1023-EZ. Finally, this Treasury decision incorporates minor revisions within the portions of Sec. Sec. 1.501(a)-1, 1.501(c)(3)-1, and 1.508-1 that are otherwise being amended. In Sec. 1.501(a)-1(a)(2), the reference to ``internal revenue district'' is removed because such reference has been made obsolete by the enactment of the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206, 112 Stat. 685. References to a district director in Sec. Sec. 1.501(a)-1, 1.501(c)(3)-1, and 1.508-1 are also modified as appropriate, as those positions no longer exist within the IRS. Similarly, references to obsolete due dates for filing notices described in section 508 and related transition relief provisions that are no longer relevant have been removed from Sec. Sec. 1.508-1(a)(2)(i) and (b)(2)(iv). In addition, Sec. 1.508-1(b)(2)(v) has been revised to remove a reference to the instructions for Form 4653, which is no longer in use. Effective/Applicability Dates The temporary regulations have applied since July 1, 2014, and this Treasury decision adopts the proposed regulations that cross-referenced the text of those temporary regulations without substantive change. Thus, the final regulations apply on and after July 1, 2014. [[Page 29732]] Statement of Availability of IRS Documents Rev. Proc. 2017-5 is published in the Internal Revenue Bulletin and is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting the IRS Web site at http://www.irs.gov. Special Analyses Certain IRS regulations, including these, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It is hereby certified that this rule will not have a significant economic impact on a substantial number of small entities. Although this rule may affect a substantial number of eligible small entities that choose to use Form 1023-EZ to apply for recognition of tax-exempt status under section 501(c)(3), the Form 1023-EZ streamlines the application process, thereby reducing the economic impact on these entities. This rule merely permits use of the streamlined form of application available to satisfy the notice requirements under section 508(a). Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f), the temporary and proposed regulations preceding these final regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business and no comments were received. Drafting Information The principal author of these regulations is Peter A. Holiat of the 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. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * 0 Par. 2. Section 1.501(a)-1 is amended by revising paragraphs (a)(2), (b)(1), (b)(3), and (f) to read as follows: Sec. 1.501(a)-1 Exemption from taxation. (a) * * * (2) An organization, other than an employees' trust described in section 401(a), is not exempt from tax merely because it is not organized and operated for profit. In order to establish its exemption, it is necessary that every such organization claiming exemption file an application form as set forth below with the appropriate office as designated by the Commissioner in guidance published in the Internal Revenue Bulletin, forms, or instructions to the applicable forms. Subject only to the Commissioner's inherent power to revoke rulings, including with retroactive effect as permitted under section 7805(b), because of a change in the law or regulations or for other good cause, an organization that has been determined by the Commissioner (or previously by a district director) to be exempt under section 501(a) or the corresponding provision of prior law may rely upon such determination so long as there are no substantial changes in the organization's character, purposes, or methods of operation. An organization that has been determined to be exempt under the provisions of the Internal Revenue Code of 1939 or prior law is not required to secure a new determination of exemption merely because of the enactment of the Internal Revenue Code of 1954 unless affected by substantive changes in law made by such Code. * * * * * (b) Additional proof by particular classes of organizations--(1) Unless otherwise prescribed by applicable regulations or other guidance published in the Internal Revenue Bulletin, organizations mentioned below shall submit with and as a part of their applications the following information: (i) Mutual insurance companies shall submit copies of the policies or certificates of membership issued by them. (ii) In the case of title holding companies described in section 501(c)(2), if the organization for which title is held has not been specifically notified in writing by the Internal Revenue Service that it is held to be exempt under section 501(a), the title holding company shall submit the information indicated herein as necessary for a determination of the status of the organization for which title is held. (iii) An organization described in section 501(c)(3) shall submit with, and as a part of, an application filed after July 26, 1959, a detailed statement of its proposed activities. * * * * * (3) An organization claiming to be specifically exempted by section 6033(a) from filing annual returns shall submit with and as a part of its application (or in such other manner as is prescribed in guidance published in the Internal Revenue Bulletin) a statement of all the facts on which it bases its claim. * * * * * (f) Effective/applicability date. Paragraphs (a)(2), (b)(1), and (b)(3) of this section apply on and after July 1, 2014. Section 1.501(a)-1T [Removed]. 0 Par. 3. Section 1.501(a)-1T is removed. 0 Par. 4. Section 1.501(c)(3)-1 is amended by revising paragraphs (b)(1)(v), (b)(6), and (h) to read as follows: Sec. 1.501(c)(3)-1 Organizations organized and operated for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals. * * * * * (b) * * * (1) * * * (v) Unless otherwise prescribed by applicable regulations or other guidance published in the Internal Revenue Bulletin, an organization must, in order to establish its exemption, submit a detailed statement of its proposed activities with and as a part of its application for exemption (see Sec. 1.501(a)-1(b)). * * * * * (6) Applicability of the organizational test. A determination by the Commissioner that an organization is described in section 501(c)(3) and exempt under section 501(a) will not be granted after July 26, 1959, regardless of when the application is filed, unless such organization meets the organizational test prescribed by this paragraph (b). If, before July 27, 1959, an organization has been determined by the Commissioner or district director to be exempt as an organization described in section 501(c)(3) or in a corresponding provision of prior law and such determination has not been revoked before such date, the fact that such organization does not meet the organizational test prescribed by this paragraph (b) shall not be a basis for revoking such determination. Accordingly, an organization that has been determined to be exempt before July 27, 1959, and which does not seek [[Page 29733]] a new determination of exemption is not required to amend its articles of organization to conform to the rules of this paragraph (b), but any organization that seeks a determination of exemption after July 26, 1959, must have articles of organization that meet the rules of this paragraph (b). For the rules relating to whether an organization determined to be exempt before July 27, 1959, is organized exclusively for one or more exempt purposes, see 26 CFR (1939) 39.101(6)-1 (Regulations 118) as made applicable to the Code by Treasury Decision 6091, approved August 16, 1954 (19 FR 5167; 1954-2 CB 47). * * * * * (h) Effective/applicability date. Paragraphs (b)(1)(v) and (b)(6) of this section apply on and after July 1, 2014. Section 1.501(c)(3)-1T [Removed]. 0 Par. 5. Section 1.501(c)(3)-1T is removed. 0 Par. 6. Section 1.508-1 is amended by revising paragraphs (a)(2)(i), (a)(2)(ii), (b)(2)(iv), (b)(2)(v), and (c) to read as follows: Sec. 1.508-1 Notices. (a) * * * (2) Filing of notice--(i) For purposes of paragraph (a)(1) of this section, except as provided in paragraph (a)(3) of this section, an organization seeking exemption under section 501(c)(3) must file the notice described in section 508(a) within 15 months from the end of the month in which the organization was organized. Such notice is filed by submitting a properly completed and executed Form 1023 (or, if applicable, Form 1023-EZ) exemption application. Notice should be filed with the appropriate office as designated by the Commissioner in guidance published in the Internal Revenue Bulletin, forms, or instructions to the applicable forms. A request for extension of time for the filing of such notice should be submitted to such appropriate office. Such request may be granted if it demonstrates that additional time is required. (ii) Although the information required by either Form 1023 or Form 1023-EZ must be submitted to satisfy the notice required by this section, the failure to supply, within the required time, all of the information required to complete such form is not alone sufficient to deny exemption from the date of organization to the date such complete information for such form is submitted by the organization. If the information that is submitted within the required time is incomplete, and the organization supplies the necessary additional information requested by the Commissioner within the additional time period allowed, the original notice will be considered timely. * * * * * (b) * * * (2) * * * (iv) Any organization filing notice under this paragraph (b)(2)(iv) shall file its notice by submitting a properly completed and executed Form 1023 (or, if applicable, Form 1023-EZ) and providing information that it is not a private foundation. The organization shall also submit all information required by the regulations under section 170 or 509 (whichever is applicable) necessary to establish recognition of its classification as an organization described in section 509(a)(1), (2), (3), or (4). The notice required by this paragraph (b)(2)(iv) should be filed with the appropriate office as designated by the Commissioner in guidance published in the Internal Revenue Bulletin, forms, or instructions to the applicable forms. (v) An extension of time for the filing of a notice under this paragraph (b)(2) may be granted by the office with which the notice is filed upon timely request by the organization, if the organization demonstrates that additional time is required. * * * * * (c) Effective/applicability date. Paragraphs (a)(2)(i), (a)(2)(ii), (b)(2)(iv), and (b)(2)(v) of this section apply on and after July 1, 2014. Section 1.508-1T [Removed]. Par. 7. Section 1.508-1T is removed. Kirsten B. Wielobob, Deputy Commissioner for Services and Enforcement. Approved: June 9, 2017. Thomas West, Tax Legislative Counsel. [FR Doc. 2017-13866 Filed 6-29-17; 8:45 am] BILLING CODE 4830-01-P
![29730 Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules and Regulations
(d) * * * makes a payment that is a chapter 4 withholding agent on the payment or
(4) * * * reportable amount to a recalcitrant the withholding agent has not correctly
(i) * * * account holder or nonparticipating FFI reported the payment on Form 1042–S.
(C) * * * must complete a Form 1042–S to report In such case, the FFI or branch must
(2) If the U.S. branch of an FFI is not such payments. A participating FFI or report on Form 1042–S to the extent
treated as a U.S. person and applies the registered deemed-compliant FFI required under paragraph (d)(4)(iii)(A)
rules described in § 1.1471– (including a QI, WP, or WT), and a U.S. of this section. See, however, § 1.1471–
4(d)(2)(iii)(C) and provides the branch of an FFI that is not treated as 4(d)(6) for the requirement to report
withholding agent with a withholding a U.S. person that applies the rules certain aggregate information regarding
certificate that transmits information described in § 1.1471–4(d)(2)(iii)(C) may accounts held by recalcitrant account
regarding its reporting pools referenced report in pools consisting of its holders on Form 8966, ‘‘FATCA
in paragraph (d)(4)(i)(B) of this section recalcitrant account holders and payees Report,’’ regardless of whether
or information regarding each recipient that are nonparticipating FFIs. With withholdable payments are made to
that is an account holder or payee of the respect to recalcitrant account holders, such accounts.
U.S. branch, the withholding agent must the FFI may report in pools consisting * * * * *
complete a separate Form 1042–S issued of recalcitrant account holders within a
to the U.S. branch for each such pool to particular status described in § 1.1471– Martin V. Franks,
the extent required on the form and its 4(d)(6) and within a particular income Chief, Publications and Regulations Branch,
accompanying instructions or must code. Except as otherwise provided in Legal Processing Division, Associate Chief
complete a separate Form 1042–S issued § 1.1471–4(d)(2)(ii)(F), with respect to Counsel (Procedure and Administration).
to each recipient whose documentation payees that are nonparticipating FFIs, [FR Doc. 2017–13632 Filed 6–29–17; 8:45 am]
is associated with the U.S. branch’s the FFI may report in pools consisting BILLING CODE 4830–01–P
withholding certificate as described in of one or more nonparticipating FFIs
paragraph (d)(4)(ii)(A) of this section that fall within a particular income code
and report the U.S. branch as an entity and within a particular status code DEPARTMENT OF THE TREASURY
not treated as a recipient; or described in the instructions to Form Internal Revenue Service
(3) If the U.S. branch of an FFI is not 1042–S. Alternatively, a participating
treated as a U.S. person and applies the FFI or registered deemed-compliant FFI 26 CFR Part 1
rules described in § 1.1471– (including a QI, WP, or WT) and a U.S.
4(d)(2)(iii)(C) to the extent it fails to branch of an FFI that is not treated as [TD 9819]
provide sufficient information regarding a U.S. person that applies the rules RIN 1545–BM06
its account holders or payees, the described in § 1.1471–4(d)(2)(iii)(C) may
withholding agent shall report the (and a certified deemed-compliant FFI Guidelines for the Streamlined Process
recipient of the payment as an unknown is required to) perform payee-specific of Applying for Recognition of Section
recipient to the extent recipient reporting to report a chapter 4 501(c)(3) Status
information is not provided and report reportable amount paid to a recalcitrant
the U.S. branch as provided in account holder or a nonparticipating FFI AGENCY: Internal Revenue Service (IRS),
paragraph (d)(4)(ii)(A) of this section for when withholding was applied (or Treasury.
an entity not treated as a recipient. should have applied) to the payment. ACTION: Final regulations and removal of
* * * * * (B) Special reporting requirements of temporary regulations.
(ii) * * * participating FFIs, deemed-compliant
SUMMARY: This document contains final
(C) Disregarded entities. If a U.S. FFIs, FFIs that make an election under
regulations that allow the Commissioner
withholding agent makes a payment to section 1471(b)(3), and U.S. branches of
of Internal Revenue to adopt a
a disregarded entity and receives a valid FFIs not treated as U.S. persons. Except
streamlined application process that
withholding certificate or other as otherwise provided in § 1.1471–
eligible organizations may use to apply
documentary evidence from the person 4(d)(2)(ii)(F), a participating FFI or
for recognition of tax-exempt status
that is the single owner of such deemed-compliant FFI that is an NQI,
under section 501(c)(3) of the Internal
disregarded entity, the withholding NWP, or NWT, and a U.S. branch of an
Revenue Code (Code). The final
agent must file a Form 1042–S treating FFI that is not treated as a U.S. person
regulations affect organizations seeking
the single owner as the recipient in that applies the rules described in
recognition of tax-exempt status under
accordance with the instructions to the § 1.1471–4(d)(2)(iii)(C) or an FFI that
section 501(c)(3).
Form 1042–S. has made an election under section
(iii) Reporting by participating FFIs 1471(b)(3) and has provided sufficient DATES:
and deemed-compliant FFIs (including information to its withholding agent to Effective Date: These regulations are
QIs, WPs, and WTs) and U.S. branches withhold and report the payment is not effective on June 30, 2017.
of FFIs not treated as U.S. persons—(A) required to report the payment on Form Applicability Dates: For dates of
In general. Except as otherwise 1042–S as described in paragraph applicability, see §§ 1.501(a)–1(f),
provided in paragraph (d)(4)(iii)(B) (d)(4)(iii)(A) of this section if the 1.501(c)(3)–1(h), and 1.508–1(c).
(relating to NQIs, NWPs, NWTs, and payment is made to a nonparticipating FOR FURTHER INFORMATION CONTACT:
FFIs electing under section 1471(b)(3)) FFI or recalcitrant account holder and Peter A. Holiat at (202) 317–5800 (not a
and § 1.1471–4(d)(2)(ii)(F) (relating to its withholding agent has withheld the toll-free number).
mstockstill on DSK30JT082PROD with RULES
transitional payee-specific reporting for correct amount of tax on such payment SUPPLEMENTARY INFORMATION:
payments to nonparticipating FFIs), a and correctly reported the payment on
participating FFI or deemed-compliant a Form 1042–S. Such FFI or branch is Background
FFI (including a QI, WP, or WT), and a required to report a payment, however, Since 1969, section 508 of the Code
U.S. branch of an FFI that is not treated when the FFI knows, or has reason to has required an organization seeking
as a U.S. person that applies the rules know, that less than the required tax-exempt status under section
described in § 1.1471–4(d)(2)(iii)(C) that amount has been withheld by the 501(c)(3), as a condition of its
VerDate Sep<11>2014 17:26 Jun 29, 2017 Jkt 241001 PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 E:\FR\FM\30JNR1.SGM 30JNR1](https://thefederalregister.org/doc/82_FR_29855/page/1.svg)
![29732 Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules and Regulations
Statement of Availability of IRS ■ Par. 2. Section 1.501(a)–1 is amended as a part of, an application filed after
Documents by revising paragraphs (a)(2), (b)(1), July 26, 1959, a detailed statement of its
(b)(3), and (f) to read as follows: proposed activities.
Rev. Proc. 2017–5 is published in the
Internal Revenue Bulletin and is § 1.501(a)–1 Exemption from taxation. * * * * *
available from the Superintendent of (3) An organization claiming to be
(a) * * *
Documents, U.S. Government Printing (2) An organization, other than an specifically exempted by section 6033(a)
Office, Washington, DC 20402, or by employees’ trust described in section from filing annual returns shall submit
visiting the IRS Web site at http:// 401(a), is not exempt from tax merely with and as a part of its application (or
www.irs.gov. because it is not organized and operated in such other manner as is prescribed in
for profit. In order to establish its guidance published in the Internal
Special Analyses Revenue Bulletin) a statement of all the
exemption, it is necessary that every
Certain IRS regulations, including such organization claiming exemption facts on which it bases its claim.
these, are exempt from the requirements file an application form as set forth * * * * *
of Executive Order 12866, as below with the appropriate office as (f) Effective/applicability date.
supplemented and reaffirmed by designated by the Commissioner in Paragraphs (a)(2), (b)(1), and (b)(3) of
Executive Order 13563. Therefore, a guidance published in the Internal this section apply on and after July 1,
regulatory impact assessment is not Revenue Bulletin, forms, or instructions 2014.
required. It is hereby certified that this to the applicable forms. Subject only to
rule will not have a significant Section 1.501(a)–1T [Removed].
the Commissioner’s inherent power to
economic impact on a substantial revoke rulings, including with ■ Par. 3. Section 1.501(a)–1T is
number of small entities. Although this retroactive effect as permitted under removed.
rule may affect a substantial number of section 7805(b), because of a change in ■ Par. 4. Section 1.501(c)(3)–1 is
eligible small entities that choose to use the law or regulations or for other good amended by revising paragraphs
Form 1023–EZ to apply for recognition cause, an organization that has been (b)(1)(v), (b)(6), and (h) to read as
of tax-exempt status under section determined by the Commissioner (or follows:
501(c)(3), the Form 1023–EZ streamlines previously by a district director) to be
the application process, thereby exempt under section 501(a) or the § 1.501(c)(3)–1 Organizations organized
reducing the economic impact on these corresponding provision of prior law and operated for religious, charitable,
entities. This rule merely permits use of may rely upon such determination so scientific, testing for public safety, literary,
or educational purposes, or for the
the streamlined form of application long as there are no substantial changes prevention of cruelty to children or animals.
available to satisfy the notice in the organization’s character,
requirements under section 508(a). purposes, or methods of operation. An * * * * *
Therefore, a Regulatory Flexibility organization that has been determined (b) * * *
Analysis under the Regulatory to be exempt under the provisions of the (1) * * *
Flexibility Act (5 U.S.C. chapter 6) is Internal Revenue Code of 1939 or prior (v) Unless otherwise prescribed by
not required. Pursuant to section law is not required to secure a new applicable regulations or other guidance
7805(f), the temporary and proposed determination of exemption merely published in the Internal Revenue
regulations preceding these final because of the enactment of the Internal Bulletin, an organization must, in order
regulations were submitted to the Chief Revenue Code of 1954 unless affected to establish its exemption, submit a
Counsel for Advocacy of the Small by substantive changes in law made by detailed statement of its proposed
Business Administration for comment such Code. activities with and as a part of its
on their impact on small business and application for exemption (see
* * * * *
no comments were received. (b) Additional proof by particular § 1.501(a)–1(b)).
classes of organizations—(1) Unless * * * * *
Drafting Information (6) Applicability of the organizational
otherwise prescribed by applicable
The principal author of these regulations or other guidance published test. A determination by the
regulations is Peter A. Holiat of the in the Internal Revenue Bulletin, Commissioner that an organization is
Office of Associate Chief Counsel (Tax organizations mentioned below shall described in section 501(c)(3) and
Exempt and Government Entities). submit with and as a part of their exempt under section 501(a) will not be
However, other personnel from the applications the following information: granted after July 26, 1959, regardless of
Treasury Department and the IRS (i) Mutual insurance companies shall when the application is filed, unless
participated in their development. submit copies of the policies or such organization meets the
certificates of membership issued by organizational test prescribed by this
List of Subjects in 26 CFR Part 1 paragraph (b). If, before July 27, 1959, an
them.
Income taxes, Reporting and (ii) In the case of title holding organization has been determined by the
recordkeeping requirements. companies described in section Commissioner or district director to be
501(c)(2), if the organization for which exempt as an organization described in
Adoption of Amendments to the section 501(c)(3) or in a corresponding
title is held has not been specifically
Regulations provision of prior law and such
notified in writing by the Internal
Accordingly, 26 CFR part 1 is Revenue Service that it is held to be determination has not been revoked
amended as follows: exempt under section 501(a), the title before such date, the fact that such
mstockstill on DSK30JT082PROD with RULES
holding company shall submit the organization does not meet the
PART 1—INCOME TAXES information indicated herein as organizational test prescribed by this
necessary for a determination of the paragraph (b) shall not be a basis for
■ Paragraph 1. The authority citation status of the organization for which title revoking such determination.
for part 1 continues to read in part as is held. Accordingly, an organization that has
follows: (iii) An organization described in been determined to be exempt before
Authority: 26 U.S.C. 7805 * * * section 501(c)(3) shall submit with, and July 27, 1959, and which does not seek
VerDate Sep<11>2014 17:26 Jun 29, 2017 Jkt 241001 PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 E:\FR\FM\30JNR1.SGM 30JNR1](https://thefederalregister.org/doc/82_FR_29855/page/3.svg)
![Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules and Regulations 29733
a new determination of exemption is not information requested by the DEPARTMENT OF THE TREASURY
required to amend its articles of Commissioner within the additional
organization to conform to the rules of time period allowed, the original notice Internal Revenue Service
this paragraph (b), but any organization will be considered timely.
that seeks a determination of exemption 26 CFR Parts 1 and 301
* * * * *
after July 26, 1959, must have articles of [TD 9809]
organization that meet the rules of this (b) * * *
paragraph (b). For the rules relating to (2) * * * RIN 1545–BL72
whether an organization determined to RIN 1545–BN79
(iv) Any organization filing notice
be exempt before July 27, 1959, is under this paragraph (b)(2)(iv) shall file Regulations Relating to Information
organized exclusively for one or more its notice by submitting a properly Reporting by Foreign Financial
exempt purposes, see 26 CFR (1939)
completed and executed Form 1023 (or, Institutions and Withholding on
39.101(6)–1 (Regulations 118) as made
if applicable, Form 1023–EZ) and Certain Payments to Foreign Financial
applicable to the Code by Treasury
providing information that it is not a Institutions and Other Foreign Entities;
Decision 6091, approved August 16,
private foundation. The organization Correction
1954 (19 FR 5167; 1954–2 CB 47).
shall also submit all information AGENCY: Internal Revenue Service (IRS),
* * * * *
required by the regulations under Treasury.
(h) Effective/applicability date.
section 170 or 509 (whichever is
Paragraphs (b)(1)(v) and (b)(6) of this ACTION: Final and temporary
section apply on and after July 1, 2014. applicable) necessary to establish
regulations; correction.
recognition of its classification as an
Section 1.501(c)(3)–1T [Removed]. organization described in section SUMMARY: This document contains a
■ Par. 5. Section 1.501(c)(3)–1T is 509(a)(1), (2), (3), or (4). The notice correction to final and temporary
removed. required by this paragraph (b)(2)(iv) regulations (TD 9809) that were
should be filed with the appropriate published in the Federal Register on
■ Par. 6. Section 1.508–1 is amended by
office as designated by the Friday, January 6, 2017 (82 FR 2124).
revising paragraphs (a)(2)(i), (a)(2)(ii),
Commissioner in guidance published in The final and temporary regulations
(b)(2)(iv), (b)(2)(v), and (c) to read as
the Internal Revenue Bulletin, forms, or under chapter 4 of Subtitle A (sections
follows:
instructions to the applicable forms. 1471 through 1474) of the Internal
§ 1.508–1 Notices. Revenue Code of 1986 (Code) relate to
(v) An extension of time for the filing
(a) * * * information reporting by foreign
of a notice under this paragraph (b)(2) financial institutions (FFIs) with respect
(2) Filing of notice—(i) For purposes may be granted by the office with which
of paragraph (a)(1) of this section, to U.S. accounts and withholding on
the notice is filed upon timely request certain payments to FFIs and other
except as provided in paragraph (a)(3) of by the organization, if the organization
this section, an organization seeking foreign entities.
demonstrates that additional time is DATES: This correction is effective June
exemption under section 501(c)(3) must
required. 30, 2017 and is applicable beginning
file the notice described in section
508(a) within 15 months from the end * * * * * January 6, 2017.
of the month in which the organization (c) Effective/applicability date. FOR FURTHER INFORMATION CONTACT:
was organized. Such notice is filed by Paragraphs (a)(2)(i), (a)(2)(ii), (b)(2)(iv), Kamela Nelan at (202) 317–6942 (not a
submitting a properly completed and and (b)(2)(v) of this section apply on toll-free number).
executed Form 1023 (or, if applicable, and after July 1, 2014. SUPPLEMENTARY INFORMATION:
Form 1023–EZ) exemption application.
Notice should be filed with the Section 1.508–1T [Removed]. Background
appropriate office as designated by the Par. 7. Section 1.508–1T is removed. The final and temporary regulations
Commissioner in guidance published in (TD 9809) that are subject of this
the Internal Revenue Bulletin, forms, or Kirsten B. Wielobob, correction are under sections 1471
instructions to the applicable forms. A Deputy Commissioner for Services and through 1474 of the Internal Revenue
request for extension of time for the Enforcement. Code.
filing of such notice should be Approved: June 9, 2017.
submitted to such appropriate office. Need for Correction
Thomas West,
Such request may be granted if it As published, the final and temporary
demonstrates that additional time is Tax Legislative Counsel. regulations (TD 9809) contain an error
required. [FR Doc. 2017–13866 Filed 6–29–17; 8:45 am] that proves to be misleading and is in
(ii) Although the information required BILLING CODE 4830–01–P need of clarification.
by either Form 1023 or Form 1023–EZ
Correction of Publication
must be submitted to satisfy the notice
required by this section, the failure to Accordingly, the final and temporary
supply, within the required time, all of regulations (TD 9809) that are the
the information required to complete subject of FR Doc. 2016–31601 are
such form is not alone sufficient to deny corrected as follows:
mstockstill on DSK30JT082PROD with RULES
exemption from the date of organization ■ On page 2192, column 1, under the
to the date such complete information title heading PART 301—PROCEDURE
for such form is submitted by the AND ADMINISTRATION, the first line,
organization. If the information that is the language ‘‘Par. 23. Need Authority’’
submitted within the required time is is corrected to read ‘‘Par. 23. The
incomplete, and the organization authority citation for part 301 continues
supplies the necessary additional to read in part as follows:
VerDate Sep<11>2014 17:26 Jun 29, 2017 Jkt 241001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:\FR\FM\30JNR1.SGM 30JNR1](https://thefederalregister.org/doc/82_FR_29855/page/4.svg)
Document Created: 2017-06-30 06:01:16
Document Modified: 2017-06-30 06:01:16
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final regulations and removal of temporary regulations. | |
| Dates | Effective Date: These regulations are effective on June 30, 2017. | |
| Contact | Peter A. Holiat at (202) 317-5800 (not a toll-free number). | |
| FR Citation | 82 FR 29730 | |
| RIN Number | 1545-BM06 | |
| CFR Associated | Income Taxes and Reporting and Recordkeeping Requirements |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR