D.C. Exemption Affirmation Letter Requirement Dropped
Late last year, the D.C. Office of Tax and Revenue announced that all tax exempt organizations in the District would have to refile for exempt status in D.C. during 2019. The announcement also stated that any organization with an IRS determination letter more than four years old would have to submit an “affirmation letter” from the IRS confirming exempt status as part of their DC exemption application.
This requirement created much confusion and a flurry of activity by organizations requesting affirmation letters from the IRS.
In an apparent reversal of this policy, D.C. Deputy CFO Keith Richardson and Office of Tax and Revenue Assistant General Counsel Jessica Brown announced last week that D.C. would no longer require submission of the IRS affirmation letters with exemption applications. Going forward, D.C. will confirm IRS tax exempt status by checking Publication 78 data maintained on the online IRS Tax Exempt Organization Search.
Thus, organizations who have not yet reapplied for DC exempt status may ignore the affirmation requirement when submitting their applications.
However, the online system for applying for D.C. exemption still includes a field for uploading an IRS affirmation letter, but that field is no longer mandatory (if the IRS database does not list an organization as exempt, the organization will still bear the burden of proving its Federal exempt status to D.C. to receive the D.C. exemption).
Please contact us with any questions you may have on this matter.
By R. Michael Sorrells, CPA