Democracy Policy Network
Tax Attorney Help on Late 501(c)3 & 4 Filings
We need help getting relief from fines for our late filings before a progressive policy summit..
Posted June 3, 2021
Immediate Problem
We’re in the very early stages of launching our organizations and would need to connect with a tax attorney to discuss our late (c)(3) and (c)(4) filings — and whether we’re able to prevent or request relief from fines.
Work & Deliverables
(1) Form 8967 and 1024-A for 501(c)(4) organizationForm 1024-A, Application for Recognition of Exemption
Under Section 501(c)(4) of the Internal Revenue CodeQuestionPart VIII: Notification Requirement Under Section 506:
-- We failed to file Form 8976 within the 60-day window after our incorporation date — which can incur a penalty up to a maximum of $5,000 ($20/day for each day the failure continues). Our plan is to file Form 8976 alongside our Form 1024-A and use this copy to answer the question in Part VIII, "Did you file Form 8976, Notice of Intent to Operate Under Section 501(c)(4) within 60 days if your formation? If “No,” explain": We incorporated the organization on 4/26/2020 and did not have plans to operate it until at least January 1, 2022. Since our incorporation, we have neither conducted any activities through the organization nor dedicated any resources to the organization.
-- Is this plan and language sufficient or should we dissolve this organization and create a fresh 501(c)(4) org to ensure we’re in full compliance? We’d love some on-the-ground perspective on how this requirement is being enforced/how fines are being assessed. Our understanding is that the two forms may be handled/processed separately, on different tracks. So regardless of us filing the two concurrently, there is a default notice of fine that goes out on the 8976 and then a subsequent opportunity to explain/request relief from the fine. This means that the explanation on the 1024-A will not be the only place where we need to explain the late filing, and we want to be consistent.
-- Alternatively, we’re also curious whether it be might worth simply dissolving this organization and creating a fresh 501(c)(4) org to ensure we are in full compliance. This is particularly urgent question as we in the early stages of possibly organizing a policy educational event with a national PAC for our audience of state legislators, staff and advocates and their audience of candidates and campaign staffers — so we’d like to know how to position ourselves for this.
(2) 2018 Form 990-EZ for 501(c)(3) organizationContext on DPN’s 2018 Form 990-EZ
-- We have yet to file our 2018 990-EZ for FY19, which covers our first three months of operation (March-June 2019), because we thought our first 990 would be needed for our first full-year of operation. DPN’s books run on a July-June timeline. We filed our 2019 990-N for FY20 in early November — within the deadline set by the IRS.QuestionsForm 990-EZ, B:
-- Do we leave "Initial Return" unchecked since we’ve already submitted our 2019 990-N for FY20? Our initial read of the instructions is that this would not be an “initial return” because we’ve already filed a 990-N for the following year, but this is just one interpretation. We’re curious how best to address the late filing to avoid any potential finals and whether there’s any upside to marking this as an initial return.
Abatement Request Statement: Can you help us draft an abatement request statement to include with our 990 laying out reasonable cause, controls to prevent this from happening again, etc.?
Democracy Policy Network
The Democracy Policy Network (DPN) is a new 501(c)(3) interstate organization campaigning to deepen democracy in statehouses across America so that everyone, everywhere is able to participate fully in the American democratic project. By organizing an army of policy researchers and experts from across the country alongside the next generation of bold statehouse leaders, DPN empowers people to assemble and champion a transformative, deep-dive policy agenda spanning every state issue. DPN works to respond to the multiple crises facing American democracy. As the COVID-19 crisis has starkly shown, the American political structure is in need of transformative change. Particularly, our structure, as it's currently arranged: erodes community connections; overly relies on the market for solving public problems; excludes most Americans from civic participation; fails to take seriously existential threats like climate change; and unnecessarily marginalizes millions of Americans (through health insecurity, housing insecurity, and mass incarceration). We need to respond to the crisis by deepening democracy: strengthening citizens and communities so they can fully participate in the American project; opening up power in our government and our economy to the participation of the people; and breaking down barriers so that our democratic promise can include every American. Without concrete policy alternatives that deepen democracy — and people ready to champion them — our democratic crisis is at risk of only worsening. Fortunately, ideas for deepening democracy are everywhere — from public banks in California to prison voting in DC, from democracy vouchers in Seattle to green co-ops in Cleveland — but they are disorganized and quarantined from one another: they exist only in one city or state or they’re stuck inside academic journals and white papers. In order to be useful to the movement, they need to be organized, fleshed out, and made accessible to every leader, in every state — America’s laboratories for democracy. DPN’s goal is to cohere those ideas into an organized agenda and amplify them through statehouse leaders by educating them on our policy resources. Statehouse leaders — legislators, staff, and advocates — are effective advocates for these ideas because their constituents often take their political cues from them and historically they are our nation’s “first-adopters” of transformative ideas (e.g., marriage equality, marijuana decriminalization, women’s suffrage, abolition). Two programs achieve this goal: our Policy Organizer program trains policy organizers to gather, package, organize and amplify policy kits — deep-dive, comprehensive resources about transformative ideas that deepen democracy — so that the movement’s ideas are made accessible; and our Statehouse Leadership program educates state legislators, staff, and advocates on our policy kits so that the movements ideas are amplified to more states in more ways.
Democracy Policy Network
The Democracy Policy Network (DPN) is a new 501(c)(3) interstate organization campaigning to deepen democracy in statehouses across America so that everyone, everywhere is able to participate fully in the American democratic project. By organizing an army of policy researchers and experts from across the country alongside the next generation of bold statehouse leaders, DPN empowers people to assemble and champion a transformative, deep-dive policy agenda spanning every state issue. DPN works to respond to the multiple crises facing American democracy. As the COVID-19 crisis has starkly shown, the American political structure is in need of transformative change. Particularly, our structure, as it's currently arranged: erodes community connections; overly relies on the market for solving public problems; excludes most Americans from civic participation; fails to take seriously existential threats like climate change; and unnecessarily marginalizes millions of Americans (through health insecurity, housing insecurity, and mass incarceration). We need to respond to the crisis by deepening democracy: strengthening citizens and communities so they can fully participate in the American project; opening up power in our government and our economy to the participation of the people; and breaking down barriers so that our democratic promise can include every American. Without concrete policy alternatives that deepen democracy — and people ready to champion them — our democratic crisis is at risk of only worsening. Fortunately, ideas for deepening democracy are everywhere — from public banks in California to prison voting in DC, from democracy vouchers in Seattle to green co-ops in Cleveland — but they are disorganized and quarantined from one another: they exist only in one city or state or they’re stuck inside academic journals and white papers. In order to be useful to the movement, they need to be organized, fleshed out, and made accessible to every leader, in every state — America’s laboratories for democracy. DPN’s goal is to cohere those ideas into an organized agenda and amplify them through statehouse leaders by educating them on our policy resources. Statehouse leaders — legislators, staff, and advocates — are effective advocates for these ideas because their constituents often take their political cues from them and historically they are our nation’s “first-adopters” of transformative ideas (e.g., marriage equality, marijuana decriminalization, women’s suffrage, abolition). Two programs achieve this goal: our Policy Organizer program trains policy organizers to gather, package, organize and amplify policy kits — deep-dive, comprehensive resources about transformative ideas that deepen democracy — so that the movement’s ideas are made accessible; and our Statehouse Leadership program educates state legislators, staff, and advocates on our policy kits so that the movements ideas are amplified to more states in more ways.