The IRS Calls It “Streamlined”: New Regs for Applying for Status
The IRS and the Treasury Department have issued new regulations that they claim will “streamline” the approval process for organizations seeking tax-exempt status for publicly supported charities.
What the regs do, realistically, is eliminate advance rulings for public supported charities. This became possible after a recent redesign of the federal form 990 which allows charities to demonstrate public support in a transparent way.
While I was surprised to see the advanced rulings for publicly supported charities disappeared, it makes sense. Statistically, almost 95% that receive an advance ruling are granted status at the end of the five-year period. That’s an extremely high approval rate. The decision to abandon the advanced ruling period for publicly supported charities and rely instead on information gleaned from the form 990 is basically a confirmation that the initial approvals have been thoroughly vetted.
So, what does the new rule mean for organizations that are currently in the midst of an advance ruling period? It’s good news! You can use your advance ruling letter as a final determination letter. Just make sure that you properly file your federal form 990 - the new ones go into effect for the 2008 tax year.
Tags: form 990, IRS, tax-exempt statusRelated Stories
POSTED IN: Business affairs, Charity, Government
1 opinion for The IRS Calls It “Streamlined”: New Regs for Applying for Status
melanie
Sep 12, 2008 at 12:27 pm
WIll there be a new version of the 1023 issued soon?
http://www.charitynetusa.com/blog
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