Exempt organization inflation adjusted items for 2024

ARTICLE | November 13, 2023

Authored by RSM US LLP

Executive summary: Annual inflation adjustments for exempt organizations

Revenue Procedure 2023-34 provides annual inflation adjustments for tax year 2024, including those applicable to exempt organizations. Exempt organizations with fundraising, lobbying expenses, or annual dues paid by agricultural or horticultural organization members may be affected.

2024 adjustments

The IRS announced the annual inflation adjustments applicable to tax years beginning in 2024 (typically, returns filed in 2025) for more than 60 tax provisions, including those affecting exempt organizations, in Rev. Proc. 2023-34 and IR-2023-208.

Of particular interest to exempt organizations are the following items:

• The exemption of annual dues paid by members to agricultural or horticultural organizations increases from $191 (2023) to $201 (2024)
• Low cost articles, for purposes of defining an unrelated trade or business, increases from $12.50 or less (2023) to $13.20 or less (2024)
• Insubstantial benefits that may be received by a donor without reducing the value of the charitable contribution deduction increases from $12.50, $62.50 and $125 (2023) to $13.20, $66 and $132 (2024)
• The dues limitation to qualify for the reporting exception for nondeductible lobbying expenditures increases from $132 or less (2023) to $140 or less (2024)
• The penalty associated with a failure to file a 2024 Form 990-T within 60 days of the due date shall not be less than $510 or 100% of the amount required to be shown as tax
• The penalty associated with a failure to file a 2024 Form 990, Form 990-EZ or Form 990-PF increases as follows:
• Organizations with gross receipts of $1,274,000 or less: $25 per day, not to exceed the lesser of $12,500 or 5% of gross receipts
• Organizations with gross receipts exceeding $1,274,000: $125 per day, not to exceed $63,500