Frequently Asked Questions About the Elimination of the Advance Ruling Process |
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On September 9, 2008, the IRS issued temporary Income Tax Regulations, which eliminate the advance ruling process for a section 501(c)(3) organization's foundation status.
Under the new regulations, effective immediately, the IRS will automatically classify a new section 501(c)(3) organization as a public charity for its first five years if it can show in its application that it can reasonably be expected to be publicly supported.
After the first five years, the IRS will monitor the organization's public charity status using the public support information it reports annually on the Schedule A of its Form 990, Return of Organization Exempt From Income Tax. Its public support test is based on a five year computation period that consists of the current year and the four years immediately preceding the current year.
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Page Last Reviewed or Updated: December 23, 2008