Definition of Exempt Operating Foundation |
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To qualify as an exempt operating foundation for a tax year, a private foundation must meet all the following requirements:
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It has been publicly supported for at least ten tax years or was a private operating foundation on January 1, 1983, or for its last tax year ending before January 1, 1983.
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Its governing body, at all times during the tax year, consists of individuals less than 25 percent of whom are disqualified individuals, and is broadly representative of the general public, and
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Determination letter required. A foundation wanting recognition of exempt operating foundation status must obtain a determination letter from the Internal Revenue Service determining that it has met the specific requirements of this special status. To claim exemption from the tax on net investment income, the foundation should attach a copy of this ruling letter to its annual returns, Forms 990-PF, for tax years for which the claim for exemption is made.
To obtain the ruling letter, the foundation should submit its request to Internal Revenue Service, at the address listed in Revenue Procedure 2009-4 (or latest update). Supporting documents and materials with the ruling request must demonstrate that requirements (1) through (4), listed at the beginning of this discussion, are met. Specifically, for purposes of requirements (3) and (4), the foundation must list all its officers and members of its governing body for the current year and identify any that are disqualified individuals.
Return to Life Cycle of a Private Foundation
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Page Last Reviewed or Updated: January 09, 2009