Tax-exempt and governmental entities, including those that were generally unable to use tax credits previously, can now benefit from clean energy tax credits using new options enabled by the Inflation Reduction Act of 2022. Elective paymakes certain clean energy tax credits effectively refundable. With elective pay, for tax years beginning after December 31, 2022, an applicable entity that qualifies for an applicable clean energy tax credit can choose to make an elective payment election, which will treat certain credits as a payment against their federal income tax liabilities rather than as a nonrefundable credit. This payment will first offset any tax liability of the entity and any excess will be refundable.

Applicable entities generally include tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority and rural electric cooperatives.

The Internal Revenue Service has issued proposed regulations describing rules and definitions concerning elective payments for the clean energy tax credits. The IRS has also issued temporary regulations regarding the pre-filing registration requirements for taxpayers planning to make an elective payment election.

The pre-filing registration process must be completed, and a registration number received, prior to making an elective payment election or an election to transfer eligible credits. Applicable entities will need their own Employer Identification Number (EIN) or Tax Identification Number (TIN) to complete the pre-filing registration process. Applicable entities cannot use or borrow the EIN of a related entity. The IRS is continuing to work to implement the elective payment process and will provide more information, including about the pre-filing registration process, in late 2023.

For more information on elective pay, the IRS has posted Frequently Asked Questions that provide an overview and discuss eligibility, applicable credits, steps for making an election, and other rules. Additionally, the IRS has posted numerous concise publications with key information about elective pay specifically for various types of applicable entities that may make an elective payment election:

Elective Pay Overview, Publication 5817 PDF
Rural Electric Cooperatives, Publication 5817-A PDF
S. Territorial Governments, Publication 5817-B PDF
Alaska Native Corporations, Publication 5817-C PDF
Tax-Exempt Organizations, Publication 5817-D PDF
State and Local Government, Publication 5817-E PDF
Indian Tribal Governments, Publication 5817-F PDF
Clean Energy Tax Incentives: Elective Pay Eligible Tax Credits, Publication 5817-G PDF

Two New Technical Guides Published

Exempt Organizations and Government Entities has published two new Technical Guides (TG). These guides are comprehensive, issue-specific documents that update and combine the Audit Technique Guides (ATG) with other technical content. Once completed, the TGs replace corresponding ATGs.

The two latest TGs are:

TG 3-1 provides an overview of Section 501(c)(3) application, exemption, and filing requirements, as well as other considerations such as foundation status and employment tax requirements.

TG 13 discusses tax exemption of nonprofit cemetery and crematoria organizations described under Section 501(c)(13).

Payers may Receive Notices CP 2100 and CP 2100A

When businesses and other payers file information returns (e.g., Form W-2G, Form 1099-NEC, etc.) with data that doesn’t match IRS records, the IRS sends them a CP2100 or CP2100A notice. The notices tell payers that the information returns they submitted have a missing or incorrect Taxpayer Identification Number, name, or both.

The IRS sends CP2100 and CP2100A notices twice a year, in October and the following April. Each notice has a list of payees with the issues the IRS found.

See Tax Tip 2023-75 and CP2100 or CP2100A notice for further details.

E-file Form 8300: Reporting of Large Cash Transactions

Federal law requires persons to report cash transactions of more than $10,000 by filing Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. Tax-exempt organizations are also "persons" and may need to report certain transactions. A tax-exempt organization doesn't have to report a charitable cash contribution, but it may need to report certain other cash payments. For example, an exempt organization that receives more than $10,000 in cash for renting part of its building must report the transaction.

Effective Jan. 1, 2024, businesses must electronically file (e-file) Forms 8300 if they are required to e-file certain other information returns electronically, such as Forms 1099 series and Forms W-2. They must e-file Forms 8300 in a given calendar year if they are required to file at least 10 information returns of one or more types, other than Form 8300, beginning with the calendar year 2024. The number of Forms 8300 filed does not affect the information return threshold requirement.

See Fact Sheet 2023-19 for further details.

We’re Hiring! IRS Announces Entry-Level Internal Revenue Agent Positions

Build a career with purpose. The IRS announced openings across the country for GS-05 through GS-12 Internal Revenue Agent positions for candidates with the required accounting education.

The IRS offers competitive pay, generous health care and retirement plans, alternative work schedules, work/life balance and numerous other benefits. Learn more about these positions and apply today at irs.usajobs.gov. Please share this message with others who may be interested in these positions.

For the latest exempt organization news, connect via IRS Social Media and subscribe to this and other IRS Newsletters.

If you have a technical or procedural question about Exempt Organizations, visit the Charities and Nonprofits homepage on IRS.gov.

If you have a specific question about exempt organizations, please contact us.

Please do not reply to this message.

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need to use your email address to log in. If you have questions or problems with the subscription service, please contact subscriberhelp.govdelivery.com.

This service is provided to you at no charge by the IRS.