[Federal Register Volume 74, Number 140 (Thursday, July 23, 2009)]
[Rules and Regulations]
[Pages 36395-36397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17478]
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Rules and Regulations
Federal Register
________________________________________________________________________
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Federal Register / Vol. 74, No. 140 / Thursday, July 23, 2009 / Rules
and Regulations
[[Page 36395]]
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9454]
RIN 1545-BG37
Notification Requirement for Tax-Exempt Entities Not Currently
Required To File
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
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SUMMARY: This document contains final regulations as required by
section 6033(i)(1) describing the time and manner in which certain tax-
exempt organizations not currently required to file an annual
information return under section 6033(a)(1) are required to submit an
annual electronic notice including certain information required by
section 6033(i)(1)(A) through (F). These regulations affect tax-exempt
organizations whose annual gross receipts are not normally in excess of
$25,000.
DATES: Effective Date: These regulations are effective on July 23,
2009.
Applicability Date: These regulations are applicable to annual
periods beginning after 2006.
FOR FURTHER INFORMATION CONTACT: Monice Rosenbaum at (202) 622-6070
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to the Income Tax Regulations (26
CFR part 1) under section 6033(i)(1) relating to the notification
requirement for entities not currently required to file an annual
information return under section 6033(a)(1). Section 6033(i)(1) was
added by section 1223(a) of the Pension Protection Act of 2006, Public
Law 109-208, 120 Stat. 1090 (2006) (PPA 2006), effective for annual
periods beginning after 2006. Section 6033(i)(1) requires the Treasury
Secretary to promulgate regulations that describe the time and manner
in which certain tax-exempt organizations not currently required to
file an annual information return are to submit an annual electronic
notification including information set forth in section 6033(i)(1)(A)
through (F).
On November 15, 2007, temporary regulations (TD 9366, 2007-52 IRB
1232) were published in the Federal Register (72 FR 64147) satisfying
the requirement that the Treasury Secretary promulgate regulations as
described in the preceding paragraph. Those temporary regulations were
corrected on November 23, 2007 (72 FR 65667) and December 14, 2007 (72
FR 71060). A notice of proposed rulemaking (REG-104942-07, 2007-52 IRB
1264) cross-referencing the temporary regulations was published in the
Federal Register (72 FR 64174) on November 15, 2007.
The IRS and the Treasury Department received four written comments
from the public in response to the proposed and temporary regulations.
No hearing was requested or held. After consideration of the comments
received, it was determined that the proposed regulations would be
finalized without change. Accordingly, the proposed regulations are
adopted as amended by this Treasury decision and the corresponding
temporary regulations are removed. The final regulations retain the
provisions of the proposed and temporary regulations and make minor
typographical changes.
Explanation of Revisions and Summary of Comments
One comment pointed out that there is no de minimis rule regarding
the amount of income an organization receives during the year which
would exempt it from having to submit an electronic notification.
Section 6033(i) does not provide a de minimis rule, nor does it provide
discretionary authority for the IRS and the Treasury Department to
establish a de minimis exception for reporting under section
6033(i)(1).
Another comment objected to the requirement that the notification
be submitted electronically. The IRS and the Treasury Department note
that the statute requires that information be submitted electronically,
and makes no provision for paper notification. However, as stated in
the preamble to the temporary regulations, if an organization that is
required to submit an annual electronic notification files a complete
Form 990, ``Return of Organization Exempt from Income Tax,'' or Form
990-EZ, ``Short Form Return of Organization Exempt from Income Tax,''
the annual notification required under section 6033(i) shall be deemed
satisfied. The annual notification requirement is not satisfied if the
Form 990 or Form 990-EZ contains only those items of information that
would have been required by submitting the notification in electronic
form.
One comment asked about the intent of the regulations and the
application of the requirement to submit electronic notification to
organizations that are local chapters or clubs of larger organizations.
The intent of the regulations, which were required by statute, is to
provide the public with the most accurate information about tax-exempt
organizations. With respect to organizations that are local chapters or
clubs of larger organizations, if the organization is a subordinate of
a parent organization and the subordinate is included on the parent's
group return, the subordinate need not submit the electronic
notification. However, if an organization is not part of a group return
and is a separate legal entity that meets the criteria for submitting
the electronic notification, it must submit Form 990-N, ``Electronic
Notice (e-Postcard) for Tax-Exempt Organizations Not Required To File
Form 990 or 990-EZ.''
Finally, another comment asked about the applicability of the
electronic notification requirement to Qualified State and Local
Political Organizations (QSLPOs). QSLPOs are not organizations
described in section 501(c) that are required to file a return under
section 6033(a); therefore, the provisions of these final regulations
do not apply to them. However, QSLPOs may have other reporting
requirements under section 6033(g).
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It also has been
determined that section 553(b) of the Administrative Procedure
[[Page 36396]]
Act (5 U.S.C. chapter 5) does not apply to these regulations.
It is hereby certified that the collection of information in Sec.
1.6033-6 will not have a significant economic impact on a substantial
number of small entities. Accordingly, a regulatory flexibility
analysis under the Regulatory Flexibility Act (5 U.S.C. 601) is not
required. The effect of these regulations on small entities flows
directly from the statute these regulations implement. Section
6033(i)(1) requires that certain entities submit annual notification,
in electronic form, setting forth: The legal name of the organization;
any name under which such organization operates or does business; the
organization's mailing address and Internet Web site address (if any);
the organization's taxpayer identification number; the name and address
of a principal officer; and evidence of the continuing basis for the
organization's exemption from the filing requirements under section
6033(a)(1).
Pursuant to section 7805(f) of the Internal Revenue Code, these
regulations were submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on their impact on small
business.
Drafting Information
The principal author of these regulations is Monice Rosenbaum of
the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and
Government Entities). However, other personnel from the IRS and the
Treasury Department participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
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 * * *
Section 1.6033-6 also issued under 26 U.S.C. 6033(i)(1). * * *
0
Par. 2. Section 1.6033-6 is added to read as follows:
Sec. 1.6033-6 Notification requirement for entities not required to
file an annual information return under section 6033(a)(1) (taxable
years beginning after December 31, 2006).
(a) In general. Except as otherwise provided in this paragraph,
every organization exempt from taxation under section 501(a) that is
not required to file a return described in Sec. 1.6033-2(a)(2), other
than an organization described in section 401(a) or 501(d), shall
submit annually, in electronic form, a notification setting forth the
items described in paragraph (c) of this section and such other
information as may be prescribed in the instructions and publications
issued with respect to the notification.
(b) Organizations not required to submit annual electronic
notification. (1) An organization exempt from taxation under section
501(a) that is required to file or files an annual information return
under section 6033(a)(1) shall not submit an annual electronic
notification under section 6033(i). This includes the following types
of organizations:
(i) Any organization included in a group return for that year under
Sec. 1.6033-2(d).
(ii) All private foundations required to file under Sec. 1.6033-
2(a)(2)(i) Form 990-PF, ``Return of Private Foundation or Section
4947(a)(1) Nonexempt Charitable Trust Treated as a Private
Foundation.''
(iii) Section 509(a)(3) supporting organizations required to file
under Sec. 1.6033-2(a)(2)(i) Form 990, ``Return of Organization Exempt
From Income Tax,'' or Form 990-EZ, ``Short Form Return of Organization
Exempt From Income Tax.''
(iv) A section 501(c)(21) black lung trust required to file under
Sec. 1.6033-2(a)(2)(i) Form 990-BL, ``Information and Initial Excise
Tax Return for Black Lung Benefit Trusts and Certain Related Persons.''
(v) Any organization that is required to file or files an annual
information return under section 6033(a)(1) on any other form
prescribed by the Internal Revenue Service for that purpose.
(2) An organization exempt from taxation under section 501(a) that
is not required to file a return under section 6033(a)(1) is also not
required to submit an annual electronic notification under section
6033(i). This includes the following types of organizations:
(i) A church, an interchurch organization of local units of a
church, a convention or association of churches, or an integrated
auxiliary of a church (as defined in Sec. 1.6033-2(h)).
(ii) An exclusively religious activity of any religious order.
(iii) A mission society sponsored by or affiliated with one or more
churches or church denominations, more than one-half of the activities
of which society are conducted in, or directed at persons in, foreign
countries.
(iv) An educational organization (below college level) described in
section 170(b)(1)(A)(ii), that has a program of a general academic
nature, and that is affiliated (within the meaning of Sec. 1.6033-
2(h)(2)) with a church or operated by a religious order.
(v) A State institution, the income of which is excluded from gross
income under section 115(a).
(vi) An organization described in section 501(c)(1).
(vii) An organization that is a governmental unit or an affiliate
of a governmental unit exempt from Federal income tax under section
501(a).
(3) If an organization exempt from taxation under section 501(a) is
not described in paragraph (b)(1) or (2) of this section, the
organization must submit an annual electronic notification. Thus, a
black lung trust that normally has gross receipts of $25,000 or less is
not required to file Form 990-BL but is required to submit an annual
electronic notification. A section 509(a)(3) supporting organization of
a religious organization that normally has gross receipts of $5,000 or
less is not required to file Form 990 or Form 990-EZ but is required to
submit an annual electronic notification.
(c) Additional notification requirements--(1) In general. Any
organization described in paragraph (a) of this section shall submit an
annual electronic notification described in section 6033(i)(1). The
annual electronic notification shall--
(i) Be in electronic form; and
(ii) Set forth--
(A) The legal name of the organization;
(B) Any name under which the organization operates or does
business;
(C) The organization's mailing address and Internet Web site
address (if any);
(D) The organization's taxpayer identification number;
(E) The name and address of a principal officer;
(F) Evidence of the continuing basis for the organization's
exemption from the filing requirements under section 6033(a)(1); and
(G) Additional information necessary to process the notification.
(2) The mailing address required by section 6033(i)(1)(C) and
submitted in the annual electronic notification shall be the
organization's last known address as provided by Sec. 301.6212-2(a) of
this chapter. This last known address may be updated as provided under
Sec. 301.6212-2 of this chapter, or by clear and concise notification.
The Internal Revenue Service will use this last known address as the
organization's
[[Page 36397]]
address of record and will direct all mailings to this address.
(3) By submitting the annual electronic notification described in
paragraph (c)(1) of this section, an organization acknowledges that it
is not required to file a return under section 6033(a) because its
annual gross receipts are not normally in excess of $25,000. In order
to make this determination, the organization must keep records that
enable it to calculate its gross receipts. All organizations are
required to maintain records under section 6001. These records will
provide evidence of the continuing basis for the organization's
exemption from the filing requirements under section 6033(a)(1).
(4) If an organization that is required to submit an annual
electronic notification files a complete Form 990 or Form 990-EZ, the
annual electronic notification requirement shall be deemed satisfied.
The annual electronic notification requirement is not satisfied if the
Form 990 or Form 990-EZ contains only those items of information that
would have been required by submitting the notification in electronic
form. Also, the filing of a complete Form 990 or Form 990-EZ, rather
than the submission of an annual electronic notification, is the filing
of a return that starts the period of limitations for assessment under
section 6501(g)(2).
(d) No effect on other filing requirements. An organization that is
relieved from filing an information return under section 6033(a) is
still subject to the requirements of Sec. Sec. 1.6033-2(i) and (j),
concerning: notice regarding changes in character, operations, or
purpose; provision of additional information; duty to file other
returns of information; and duty to file unrelated business tax
returns. If an organization is required to file an unrelated business
tax return, Form 990-T, ``Exempt Organization Business Income Tax
Return,'' the filing of that return does not relieve the organization
from the requirement of submitting an annual electronic notification
under section 6033(i).
(e) Accounting period for submitting annual electronic
notification. An annual electronic notification required by this
section shall be on the basis of the established annual accounting
period of the organization. If the organization has no established
accounting period, the annual electronic notification shall be on the
basis of the calendar year.
(f) Time and place for submitting annual electronic notification.
The annual electronic notification required by this section shall be
submitted on or before the 15th day of the fifth calendar month
following the close of the period for which the notification is
required to be submitted. Thus, an organization with an accounting
period ending December 31, 2007, is required to submit an annual
electronic notification by May 15, 2008. The notification shall be
submitted in accordance with instructions and publications, including
those provided at the Internal Revenue Service Web site for exempt
organizations.
(g) Effective/applicability date. These regulations are applicable
to annual periods beginning after 2006.
Sec. 1.6033-6T [Removed]
0
Par. 3. Section 1.6033-6T is removed.
Approved: July 15, 2009.
Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
Michael Mundaca,
Acting Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E9-17478 Filed 7-22-09; 8:45 am]
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