FY2024 IRS Data Book Figures for Tax-Exempt Organizations

Despite the chaos in the federal government, the IRS continues to engage in its routine tasks, including issuing its most recent Data Book. It covers fiscal year 2024, which ended on September 30, 2024. Highlights for tax-exempt organizations include:

• Of 136,323 applications for tax-exempt status under section 501 closed, the IRS approved 118,656 (87.0%, comparable to the 86.3% approval rate reported for FY2023), disapproved 95 (0.07%, the same as for FY2023), and otherwise disposed of 17,572 (12.9%, as compared to 13.7% for FY2023). As usual, the bulk of these applications were under section 501(c)(3) (130,089 closed, 113,312 approved, 74 disapproved, 16,703 otherwise disposed), with only 501(c)(4), (c)(6), and (c)(7) having more than 1,000 applications each (and less than 2,000 each), which was also the case in FY2023. (Table 12)

• There were 3,386 notices of intent to operate under section 501(c)(4) received and 487 rejected. The Data Book notes "[e]xamples of notices that would be rejected include notices from organizations not required to file Form 8976 (e.g., organizations that filed [a Form 990 series return] or Form 1024 on or before July 8, 2016, or organizations already exempt under other Internal Revenue Code subsections) or where the IRS cannot confirm an organization’s Employer Identification Number." (Table 13)

• There were 2,025,795 tax-exempt organizations, nonexempt charitable trusts, and split-interest trusts, of which 1,873,538 were tax-exempt under section 501(c) and 1,548,798 under section 501(c)(3). (Table 14)

• The IRS examined 666 Forms 990, 990-EZ, and 990-N (Table 21), a sharp reduction from the 1,029 examined in FY2023. Since these are past year returns there is not a directly comparable number of such forms filed provided in the Data Book, but this figure almost certainly reflects an examination rate of less than 0.1%.

• Chief Counsel reported receiving 999 new tax law enforcement and litigation cases in TEGE Division Counsel, almost the exact number as in FY2023, as well as closing 921 cases and having 906 cases pending as of 9/30/24. (Table 30)

Lloyd Mayer