Exempt Organizations - Private Letter Rulings and Determination Letters |
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The IRS will rule on the tax consequence of proposed changes to an organization's purposes or activities. Thus, if you are unsure about whether proposed changes are consistent with your status as an exempt organization or as a public charity (if applicable), you may want to request a private letter ruling or determination letter. You may also obtain a determination letter on whether you are exempt from annual exempt organization returns. Revenue Procedure 2009-4 provides procedures for such requests.
In some areas, the law requires that an organization notify the Internal Revenue Service or receive an advance determination before undertaking a transaction resulting in certain tax consequences. Thus, an exempt organization must request a private letter ruling or determination with respect to the following issues:
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Certain determinations regarding application of the neighborhood land rule (Code section 514(b)(3))
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Establishment of a set-aside (Code section 4942(g)(2))
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Advance approval of private foundation voter registration activities (Code section 4945(f))
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Certain changes in an organization's accounting methods and periods (see Publication 4221-PC, at p. 8, for a general discussion of accounting methods and periods)
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Treatment of a grant as an unusual grant under sections 1.170A-9(e)(6)(ii) and 1.509(a)-3(c)(3) and related provisions of the Income Tax Regulations.
Return to Life Cycle of a Public Charity
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Page Last Reviewed or Updated: January 08, 2009