Many tax-exempt organizations are familiar with the IRS’s online tools for individuals, but fewer are aware that the IRS has expanded access to its Business Tax Account (BTA) platform to include tax-exempt organizations. The BTA is a secure online portal that allows authorized representatives of an organization to access certain IRS information and perform various tax administration functions electronically rather than relying solely on paper correspondence or phone calls with the IRS.
What Can Tax-Exempt Organizations Do Through a Business Tax Account?
The BTA allows users to:
- View certain IRS account information and business details on file with the IRS
- View account balances and payment history
- Make federal tax payments and deposits
- Access eligible tax transcripts and records
- Download certain IRS notices and correspondence
- Request or download a Tax Compliance Report
- Manage user access to the organization’s Business Tax Account
The IRS continues to expand the functionality available through the platform, making it an increasingly valuable resource for not-for-profit organizations.
Who Can Be a “Designated Official”?
To establish and manage a BTA for a tax-exempt organization, the IRS requires at least one individual to serve as a Designated Official. For tax-exempt organizations, the Designated Official generally must be one of the following:
- A current officer of the organization (such as president, vice president, treasurer, CEO, CFO, or COO)
- A current board chairperson
- A trustee of a trust
A Designated Official has full access to the organization’s Business Tax Account and can authorize additional users.
Adding “Designated Users”
Once a Designated Official has established access, the organization can add Designated Users. Designated Users may be granted access to specific tax periods and functions within the account, such as viewing records or making payments. This can help organizations ensure that key finance, accounting, tax, and administrative personnel have access to the information they need without requiring every individual to be a Designated Official.
Why This Matters: Tax Compliance Reports
Grantmakers, contracting agencies, and prospective donors are increasingly requesting copies of an organization’s IRS Tax Compliance Report as part of grant applications, vendor registrations, or due diligence procedures. The Tax Compliance Report provides a summary of an organization’s federal tax compliance status and can be downloaded directly from the IRS.
Importantly, at this time, the IRS only makes the Tax Compliance Report (Letter 6574) available through the organization’s Business Tax Account.
As a result, organizations that have not yet established a Business Tax Account or that have not properly set up Designated Officials and Designated Users may encounter delays when attempting to obtain a Tax Compliance Report in response to a grant application or donor request.
Recommendation
Tax-exempt organizations should consider establishing their IRS Business Tax Account now and confirming that the appropriate personnel have the necessary access. Taking these steps proactively can help avoid last-minute complications when important compliance documents are needed for grants, funding opportunities, contracts, audits, or other third-party requests.
Help avoid last-minute compliance delays by contacting CBIZ for guidance on establishing an IRS Business Tax Account and securing the appropriate access.
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