The IRS and the Treasury Department on Sept. 8 issued new regulations that will streamline the approval process for organizations seeking tax-exempt status as publicly supported charities.
The new regulations do away with the so-called “advance rulings” that granted public charity status for an initial five-year period but required exempt organizations to demonstrate, after the initial period, that they in fact received a substantial part of their support from public sources to receive a final determination letter. The IRS was able to eliminate the advance rulings process because of the recent redesign of Form 990, the tax return filed by organizations exempt from federal income tax.
Organizations that have already received an advance ruling under the old regime, but are still in their first five years of existence, can use their advance ruling letter as their final determination letter. In addition to the streamlined approval process, the new regulations include other modifications necessary to implement the redesigned Form 990. Read the press release.
