Electronic filing of Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code, via https://www.pay.gov was made mandatory upon the release of Revenue Procedure 2022-08[1] on January 3, 2022.  A limited 90-day transition period will allow for some submissions to continue to be submitted on paper forms for a limited time.

The form is filed by the following organizations looking for recognition as a tax-exempt entity:

• Entities described in § 501(a) (other than those described in § 501(c)(3) or § 501(c)(4)) and

• Entities described in § 521 (for organizations seeking a determination letter recognizing exempt status who submit Form 1024 in lieu of filing Form 1028 along with Form 8718)[2]

Note: Organizations applying for §501(c)(3) exempt status on Form 1023 have been required to file that form electronically since early 2020 per Revenue Procedure 2020-8.

The procedure also modifies which individuals or representatives are allowed to sign the Form 1024 to allow more individuals associated with the organization to sign the form, but removes the ability to appoint a representative via a power of attorney to sign the application for the organization.

The procedure summarizes the revised submission process as follows:

The IRS has revised and updated Form 1024 and provided for it to be electronically submitted at www.pay.gov. Organizations seeking determination under section 501(a) (other than those described in § 501(c)(3) or § 501(c)(4) and those seeking group rulings), including those organizations that have been required to submit letter requests to seek their determination (including those described in § 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28) or (29), or under § 501(d)) are required to electronically submit the Form 1024 as of the effective date of this revenue procedure, except as provided in section 4. Organizations requesting determination under section 521 may also electronically submit the Form 1024 instead of Form 1028.

The electronic submission process for Form 1024 replaces the paper submission process for Form 1024 on January 3, 2022, subject to the transition relief provided in section 4 of this revenue procedure. Section 3 of this revenue procedure modifies Rev. Proc. 2022-5 to set forth procedures for issuing determination letters in response to electronically submitted Form 1024 applications. Unless otherwise modified in this revenue procedure, the provisions of Rev. Proc. 2022-5 continue to apply.[3]

The IRS news release issued at the same time as the notice provides the following additional information:

Organizations requesting determinations under Section 521 are now also able to use the electronic Form 1024 instead of Form 1028, Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code.

The required user fee for Form 1024 will remain $600 for 2022. Applicants must pay the fee through Pay.gov when submitting the form. Payment can be made directly from a bank account or by credit or debit card.[4]

Individuals or Representatives Who Can Sign Form 1024

Under prior guidance, the following individuals or representatives were allowed to sign a Form 1024:

• An officer,

• A trustee who is authorized to sign, or

• A representative authorized by a power of attorney.[5]

Now the list is expanded to include the following additional individuals:

• A director and

• An other official who is authorized to sign for the organization.[6]

As well, the notice removes the option to have a representative authorized under a power of attorney sign Form 1024.  The procedure provides:

The signature of a representative authorized by a power of attorney who is not an officer, director, trustee, or other official of the organization will not satisfy the signature requirement for Form 1024.[7]

The notice also directs organizations to “[s]ee the instructions to the form for more information on who may sign the application on behalf of an organization.”[8]

90 Day Transition Relief for Filing Paper Forms

The ruling notes that generally:

“…an organization seeking recognition of tax-exempt status under § 501(a) using Form 1024, including those that previously were required to submit a letter application but are required under section 3.02 to use Form 1024, must electronically submit the form and user fee online at www.pay.gov.”[9]

However, for a short period (90 days after January 3, 2022) the following transition relief applies:

For the 90-day period after the effective date of this revenue procedure, the Internal Revenue Service will accept for processing a completed paper Form 1024 from an organization that previously was required to submit the paper Form 1024 and is now required to submit the electronic Form 1024. For this period, the Service will also accept for processing a letter application from an organization that previously was required to submit a letter request and is now required to submit the electronic Form 1024. The paper Form 1024 or letter application must be accompanied by the correct user fee as described in Rev. Proc. 2022-5 prior to the modifications to the payment of user fees made by this revenue procedure and postmarked on or before the date that is 90 days after the effective date of this revenue procedure.[10]

[1] Revenue Procedure 2022-08, January 3, 2022, https://www.irs.gov/pub/irs-drop/rp-22-08.pdf (retrieved January 16, 2022)

[2] Revenue Procedure 2022-08, January 3, 2022

[3] Revenue Procedure 2022-08, January 3, 2022

[4] “IRS revises Form 1024, used by most types of organizations to apply for exempt status, to allow electronic filing,” IR-2022-2, January 3, 2022, https://www.irs.gov/newsroom/irs-revises-form-1024-used-by-most-types-of-organizations-to-apply-for-exempt-status-to-allow-electronic-filing (retrieved January 16, 2022)

[5] Revenue Procedure 2022-05, Section 4.02 before modification by Revenue Procedure 2022-08

[6] Revenue Procedure 2022-08, January 3, 2022

[7] Revenue Procedure 2022-08, January 3, 2022

[8] Revenue Procedure 2022-08, January 3, 2022

[9] Revenue Procedure 2022-08, January 3, 2022

[10] Revenue Procedure 2022-08, January 3, 2022