IRS Launches Guide For Tax Exempt Bodies

by Leroy Baker, Tax-News.com, New York

02 July 2007

The Internal Revenue Service has launched four new 'Life Cycles' — web-based information tools — to help guide tax-exempt organizations through the federal tax rules and requirements that pertain to them.

The new tools, patterned after existing life cycles for public charities and private foundations, are designed to help social welfare organizations, labor organizations, agricultural and horticultural organizations such as farm bureaus, and trade associations and other business leagues.

Each 'life cycle' provides a graphical snapshot of five stages that organizations typically go through during their existence: starting the organization; applying for tax-exempt status; filing required returns and other documents; maintaining compliance; and terminating the organization.

“The exempt organizations community has enthusiastically embraced the life cycle concept for public charities and private foundations. We thought it made sense to develop similar helpful tools for other sectors of the exempt organizations community," explained Lois G. Lerner, director of the IRS’s Exempt Organizations division. “These Web pages are designed to be an easy-to-use service for this community.”

The new life cycles explain an array of issues, such as how to acquire an employer identification number; how to avoid jeopardizing an organization’s exemption; how political campaign involvement could affect the organization’s status and tax responsibilities; and how disclosure requirements must be met.

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