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8718 fee schedule Form: What You Should Know

Form 8718 (with payment of the user fee — see above) was not previously required for Tax Exempt status. This is due to legislative changes in the 1990 Tax Reform. The Form 8718 and request for recognition of tax·exempt status is used as a prerequisite to request a decision letter from the IRS for tax exemption for an organization (or its business activities or its property) that meet certain criteria. A determination letter for tax·exempt status is sent to those organizations that can and do meet the IRS criteria for exempt status. The organization may then elect to be recognized as such for tax purposes or not; the IRS decides based on the information it receives regarding the activities and ownership of the organization, or the income of the organization. In accordance with the law and the standards set out in Treasury Regulation 1.471R-1(f), all organizations are required to submit a Form 8718 to be entitled to be recognized as tax-free under section 501(c)(3) of the Internal Revenue Code. The organization must pay the actual user fee, a .5 percent of the organization's net income or gross receipts for tax reporting purposes. This is in addition to the 9.00 user fee for each application for a determination letter, see below. In general, a fee may be applied to the refund of fees paid to the IRS due to errors on Form 2748 or any other IRS return (such as the 1099 tax form). No user fee is payable for application for a determination letter under section 501(a) of the Internal Revenue Code (IRC). The applicant must pay the amount equal to 5 percent (5%) of the total amount of fees paid to the IRS for the payment of tax information returns (Form 5721, 843, and 940) under section 6034; (a.2) that fee need to be paid in the full amount of the Form 2748 fee; and (b) any remaining portion of the fee (10.5%) must be paid on Form 8718. There is no limit on the amount of fees that may be refunded for those that apply for a determination letter. A fee is not payable for an application for a determination letter. An organization wishing to be recognized as exempt under section 501(c)(3) of the IRC must pay 9 in a single payment.

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  1. On the site with all the document, click on Begin immediately along with complete for the editor.
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