IRS Announces that Group Ruling Holders Will No Longer Receive Reporting Reminders from IRS
By Fred Longwood, Senior Tax Manager
On March 20, 2019, the IRS announced that it has stopped mailing lists of organizations that are covered by an active group exemption to central organizations (group ruling holders) for verification. Up until now, the IRS has issued a list of group members to central organizations to review, revise if necessary, and then send back to the IRS to complete the confirmation process.
Central organizations are still required to comply with the annual reporting requirements set forth in Section 6 of Revenue Procedure 80-27; however, it is now up to them to initiate the process. The information required on the notification includes the names, addresses, and employer identification numbers of subordinate organizations that have terminated, disaffiliated from the group, been added to the group, or changed names or addresses. If there are no changes, the central organization must submit a statement to that effect to the IRS.
Failure to file the annual notification will result in the revocation of the group exemption. In that event, the subordinate group members will each need to separately file an application for federal income tax exempt status.
The notification should be submitted at least 90 days before the close of the central organization’s annual accounting period – for example, by October 1 for organizations with a calendar year end, and by April 1 for organizations with a June 30 year end. If there are no changes, you should still send a letter saying, “There are no changes.”
Group ruling holders should send their annual notifications to the following address by certified mail with a return receipt confirmation attached:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201
Please contact us with any questions you may have on this matter.