AICPA Requests Simplification for Foreign Filings Made by Exempt Organizations
Washington, D.C. (January 30, 2025) – In a letter submitted to the Internal Revenue Service (IRS), the American Institute of CPAs (AICPA) requested that the Department of the Treasury and the IRS provide exemptions to, or streamlined reporting for, certain foreign filings required by tax-exempt organizations, namely Form 926, Form 8865, and Form 5471.
Most EOs with overseas investment interests have only small indirect ownership interests and do not earn taxable income from these investments. Uncertainty in the rules and fear of penalties lead them to file these intricate tax forms as a precaution, requiring input from both EO tax advisors and international tax specialists. Clear guidance and limited exceptions for EOs would be extremely beneficial to these organizations and their tax practitioners, thus freeing up valuable time and resources to be redirected toward mission-related activities and programs.
The AICPA’s recommendations will:
Simplify the filing process for tax-exempt organizations and tax practitioners;
Reduce duplicative reporting of certain information;
Eliminate unnecessary complexity and reduce the tax administrative burden for EOs; and
Reduce the administrative burden on the IRS related to collecting the required information.
“Gathering the relevant information, determining whether a filing is required, and then preparing and filing the forms is an administrative and compliance burden, both in terms of time spent and costs incurred,” says Daniel Hauffe, Senior Manager, AICPA Tax Policy & Advocacy. “This burden on tax-exempt organizations arguably outweighs any informational or tax dollar benefit the IRS and Treasury likely receive.”
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with 400,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.
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Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com