Recently, the IRS placed a moratorium on ERC applications through December 31, 2023. The IRS plans to look into preparers and there are indications that MN Charters may be contacted as well. EdFinMN has sent multiple communications to the IRS seeking further clarification prior to the program's April 2024 expiration, but has not received more clarity than the 2021-20 guidance below.
For Minnesota Charter Schools, the eligibility question has hinged around the definition of a governmental instrumentality (see Notice 2021-20). The IRS uses 6 factors to assess
eligibility:
whether the organization is used for a governmental purpose and performs a governmental function;
whether performance of the organization’s function is on behalf of one or more States or political subdivisions;
whether there are any private interests involved, or whether the States or political subdivisions involved have the powers and interests of an owner;
whether control and supervision of the organization is vested in a public authority or authorities;
if express or implied statutory or other authority is necessary for the creation and/or use of such an instrumentality, and whether such authority exists; and
the degree of financial autonomy and the source of its operating expenses.
Multiple service providers, legal counsels and auditors have opined that MN Charters should be careful as the IRS has only referenced this guidance when asked to review current eligibility.
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