Association Address or Responsible Party Change
The IRS wants to know if your nonprofit organization has changed its mailing address or the identity of its responsible party. If so, and if either of these changes has never been reported, you should complete Form 8822-B by March 1, 2014.
The same form should be used for any future updates, and should be filed within 60 days after the change takes effect.
“While Form 8822-B applies to both for-profit businesses as well as nonprofit organizations, this rule is especially important for groups with volunteer leadership that turns over frequently, such as churches and smaller nonprofits,” says Karen Gries, a tax principal for CliftonLarsonAllen. “The IRS needs to have the correct contact person for future notices and other important communications.”
Although this new form could affect a large number of organizations in a small way, the good news is that it should be easy to fill out, even though you cannot e-file at this time.
Who is your responsible party?
Gries adds that the “responsible party” is generally the person who directly or indirectly controls, manages, or directs the entity and disposition of its funds and assets. That person’s title could be different in many exempt groups.
“In a church, the responsible party could be the pastor, treasurer, or church administrator,” Gries says. “For small nonprofits it generally would be the executive director, but could also be the treasurer.”
Gries stresses, “Many organizations that should file the form are not aware of this new requirement, so we’re making an effort to inform and assist organizations in any way we can.”
Consequences of not filing
The form is part of an effort by the IRS to maintain correct information for the quick resolution of tax-related matters. There aren’t penalties at this time for failing to file, but if the IRS doesn’t have your updated contact information, you may not receive tax notices such as a deficiency notice or a demand for payment in a timely manner. Any interest or penalties related to those misdirected notices would continue to accrue.
By Karen Gries, Clifton Larson Allen