New Form 1024-A: Exemption Application for 501(c)(4) Organizations

The IRS has issued a new Form 1024-A, Application for Recognition of Exemption under Section 501(c)(4) of the Internal Revenue Code for an organization that chooses to apply for recognition of exempt status under Section 501(c)(4). Organizations described in Sections 501(c)(2), (5), (6), (7), (8), (9), (10), (12), (13), (15), (17), (19) or (25) will continue to file the traditional Form 1024.

Form 1024-A requires applicants to provide somewhat greater detail than Form 1024. For example, Form 1024-A requires organizations to disclose family or business relationships or agreements with any officers, directors, trustees, employees, members, independent contractors, or any entity they own or control. 

If the applicant compensates any of its officers, directors, trustees, employees, members, or independent contractors, it is required to disclose whether the compensated individuals will follow a conflict of interest policy and if they will be compensated through nonfixed payments. Lastly, the applicant is required to disclose if it will or plans to make foreign grants or conduct activities in any foreign country or countries.

It is important to read the instructions to Form 1024-A carefully to determine if additional attachments are required.

Form 1024-A filers must include Form 8718User Fee for Exempt Organization Determination Letter Request, and the correct user fee, which is currently $600.

Finally, Form 8976, Notice of Intent to Operate Under Section 501(c)(4) must be filed within sixty (60) days of formation; otherwise, a penalty may be assessed if not timely filed. Form 1024-A doesn’t satisfy this requirement.

Additional reading: What is a Group Exemption

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations.  Ellis is licensed to practice in Washington and Arizona and advises nonprofits on federal tax and fundraising regulations nationwide. Ellis also advises donors with regard to major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.

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