PATH Act Imposes New Filing Requirement On I.R.C. §501(c)(4) Organizations

On December 18, 2015, President Obama signed the Protecting Americans From Tax Hikes Act of 2015 (PATH Act). The PATH Act contains more than 100 separate provisions and adds Section 506 to the Internal Revenue Code (I.R.C. §506). Section 506 imposes filing requirements (enforced by penalties) on new and certain existing I.R.C. §501(c)(4) organizations (the §506 Requirements). I.R.C. §506 calls into question the strategy of "self-declaring" I.R.C. §501(c)(4) status.

What are the I.R.C. §506 Requirements?

Under I.R.C. §506, organizations must file an initial notification (the Initial Notification) together with a user fee, and must provide supporting information (the Supporting Information) with the first Form 990-series return filed after submitting the Initial Notification.