Update for Social Welfare Organizations

Date: April 13, 2016

The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) created the new IRS section 506. This section requires social welfare organizations (those claiming exemption under ยง 501(c)(4)) to provide notice to the IRS of their existence no later than 60 days after their formation.  

The PATH Act requires social welfare organizations that were in existence on or before December 18, 2015 to notify the IRS of their existence by June 15, 2016 unless they had submitted an IRS Form 1024 or Form 990 prior to December 18, 2015. 

An organization that fails to file the notice within 60 days of its formation is subject to a penalty of $20 for each day that it fails to submit the notice with a maximum penalty of $5000.

Notice 2016-09 extends the due date for these submissions to at least 60 days after the temporary regulations are issued.  The IRS has requested that social welfare organizations wait until the temporary regulations are issued to submit any information to the IRS.  The IRS will be developing a form for submitting the required notice and will also establish a user fee for this filing.