IRS 8718 Explained

What is IRS 8718?

IRS 8718 is a tax form that helps organizations apply for recognition as exempt organizations. It is specifically used by organizations seeking to obtainfederal tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Essentially, this form provides the IRS with the necessary information about the organization, such as its purposes and activities, which allows the IRS to determine whether the group qualifies for tax exemption. This form is essential for charities and nonprofit organizations as it ensures they meet IRS requirements and can operate without paying certain federal taxes.

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Purpose of IRS 8718

The primary purpose of IRS 8718 is to facilitate the application process for tax-exempt status for specific organizations. This form collects essential information about the organization’s structure, operations, and financial details. By providing this information, organizations can demonstrate compliance with federal guidelines regarding charitable activities and operations. The form also serves as a crucial step for organizations that wish to gain the benefits associated with tax exemption, including the ability to receive tax-deductible contributions and exemptions from certain federal income taxes.

Where is IRS 8718 used and by whom?

IRS 8718 is typically used by a variety of organizations, including:

1.

Nonprofit organizations: Most commonly, charities that seek tax-exempt status under Section 501(c)(3) use this form.
2.

Religious organizations: Churches and religious groups also need this form to establish their tax-exempt status.
3.

Educational organizations: Schools and educational institutions can use IRS 8718 to apply for tax exemptions related to their operations.
4.

Community groups: Local organizations or foundations providing community services may also utilize this form.

Each of these groups must articulate their purpose as it aligns with IRS regulations, making IRS 8718 a critical form for obtaining tax-exempt recognition.

Step-by-step: how to fill out IRS 8718

Filling out IRS 8718 requires careful attention to detail. Here’s a step-by-step guide:

1.

Contact Information: Begin by filling out your organization's name, address, and employer identification number (EIN).
2.

Organizational Structure: Specify your organization type, such as a corporation or association, and include relevant details.
3.

Purpose Statement: Clearly state the purpose of your organization. Describe the activities and services you provide to fulfill that purpose.
4.

Financial Data: Include information about your organization’s financial condition, including a proposed budget and projected revenues.
5.

Additional Information: Answer any additional questions the form may pose, ensuring thoroughness and accuracy.
6.

Review: Double-check all entries for clarity and correctness.
7.

Submission: Decide how you will submit your form (more detailed instructions are provided below).

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Who is required to complete IRS 8718?

Organizations that intend to operate as tax-exempt entities must complete IRS 8718. This includes:

1.

Any nonprofit seeking 501(c)(3) status must file this form.
2.

Groups formed for religious, charitable, or educational purposes must also use IRS 8718.
3.

Organizations that solicit donations or grants and need tax-exempt status are required to file.

Additionally, if any organization changes its structure or purpose, they may be obligated to resubmit this form to reflect the new changes.

Information you need to complete IRS 8718

Preparing to fill out IRS 8718 requires gathering specific information beforehand. Here is what you’ll need:

1.

Legal name of the organization
2.

Employer Identification Number (EIN)
3.

Description of the primary activities
4.

Mission statement
5.

Financial data, including income and expenses
6.

Board of directors or governing body details
7.

Any existing bylaws or governing documents

Having this information ready will simplify the filling process and help ensure accuracy on the form.

How to submit IRS 8718

Once you complete the IRS 8718 form, you have various submission options:

1.

Online Submission: Some organizations may have the option to submit electronically through the IRS website.
2.

Mail: You can also print the form and mail it to the address specified in the form instructions.
3.

Email: While not common, verify if email is an acceptable submission method for your specific case.

Ensure you check for deadlines associated with submissions, as tax-exempt status applications can have specific timelines. Typically, forms should be submitted well in advance of when you plan to solicit donations or grants to avoid interruption.

When to update or refile IRS 8718

It may be necessary to update or refile your IRS 8718 if certain circumstances arise. For example:

1.

If your organization changes its name or address, you may need to refile.
2.

Significant changes in the organizational structure, such as a merger or significant board changes, could require an update.
3.

Modifications to the purpose of the organization that deviate from what was originally stated on IRS 8718 may also necessitate a refile.

Being proactive in updating these details can help maintain compliance and avoid penalties.

What happens if you don’t file IRS 8718?

Failing to file IRS 8718 can lead to several negative consequences:

1.

Loss of Tax-Exempt Status: Without submitting the form, your organization may not receive tax-exempt status, affecting your ability to receive donations.
2.

Penalties: Organizations may incur financial penalties for failing to file on time or inaccurately.
3.

Compliance Issues: Not maintaining compliance with IRS regulations can lead to further scrutiny or audits from tax authorities.

It's crucial to meet filing requirements to safeguard your organization’s standing and ensure that you can continue your mission effectively.

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Frequently Asked Questions About the IRS 8718

What is the IRS 8718 form and why is it important?

The IRS 8718 form is a key document used to request approval for an increase in user fees for tax-exempt organizations. Understanding the IRS 8718 is critical for organizations as it directly impacts their financial obligations and compliance with IRS regulations. By submitting this form, organizations can ensure they are following proper procedures to maintain their tax-exempt status.

Who needs to file the IRS 8718?

Tax-exempt organizations that wish to increase their user fees must file the IRS 8718. If your organization anticipates changes in fee structures, it is essential to file this form. Failing to submit the IRS 8718 can lead to complications in maintaining your tax-exempt status, so it’s crucial for affected organizations to be aware of this requirement.

What are the consequences of not filing the IRS 8718 form?

Not filing the IRS 8718 form can result in serious consequences for tax-exempt organizations, including potential penalties and loss of tax-exempt status. The IRS may impose fees or disallow certain deductions if the form is not properly submitted. Therefore, ensuring compliance with the IRS 8718 is vital for the long-term financial health of your organization.

When is the deadline to submit the IRS 8718?

The deadline for submitting the IRS 8718 form generally coincides with the organization's filing date for their annual information return, such as Form 990 or Form 1120-POL. Ensuring timely submission of the IRS 8718 is crucial to avoid late fees and complications with tax status. It is advisable to check the IRS website for specific deadlines that pertain to your organization’s situation.

How do I fill out the IRS 8718 form correctly?

Filling out the IRS 8718 requires careful attention to detail. Make sure to include accurate information regarding your organization and proposed fee changes. Detailed instructions are typically available online on the IRS website, which can guide you step-by-step in completing the IRS 8718 accurately to avoid delays in processing.

Is there a fee associated with filing the IRS 8718?

Yes, submitting the IRS 8718 does involve a fee that is specified by the IRS guidelines. The amount of the fee may vary depending on the nature and size of the organization submitting the form. It’s essential to understand this financial obligation before filing to ensure your organization remains compliant with IRS requirements.

Where can I find more information about the IRS 8718?

Comprehensive information about the IRS 8718 can typically be found on the official IRS website. This resource includes detailed descriptions of the filing process, instructions, and frequently asked questions. Utilizing the IRS website is a good starting point for ensuring you have the most accurate and up-to-date information regarding the IRS 8718.

What should I do if my organization is denied approval after filing the IRS 8718?

If the IRS denies your organization’s request after submitting the IRS 8718, you have the right to appeal the decision. Review the specific reasons for the denial as detailed in the IRS communication. It may also be beneficial to consult a tax professional who can guide you through the appeal process and help rectify any issues with your submission.

Can I amend my IRS 8718 form after submission?

Yes, if changes are necessary after submitting the IRS 8718, organizations can file an amendment. However, it is crucial to submit this amendment as soon as possible to prevent further complications. Check the IRS guidelines for specific instructions on how to amend your IRS 8718 form properly.

How does the IRS 8718 affect tax-exempt status maintenance?

The IRS 8718 plays a significant role in the ongoing compliance of tax-exempt organizations. Properly submitting this form ensures that organizations can increase fees without jeopardizing their tax-exempt status. Complying with IRS requirements through the IRS 8718 is essential for maintaining public trust and financial integrity in the eyes of the IRS.

Author:

by Iryna Marchuk

Lead Writer/Blogs Manager at airSlate

Disclaimer: This content is for informational purposes only. It is not legal or other professional advice. airSlate provides this material on an "as-is" basis and disclaims all representations, guarantees, or warranties, whether express, implied, or statutory, including but not limited to warranties of merchantability, fitness for a particular purpose, or accuracy.