- New penalty provisions for nonfiling. For annual tax periods beginning after 2006, the law requires most tax-exempt organizations, other than churches, to file an annual Form 990, 990-EZ, or 990-PF with the Internal Revenue Service (IRS), or to submit an annual electronic notice, Form 990-N (e-Postcard), to the IRS. If an organization fails to file an annual return or submit an annual notice as required for 3 consecutive years, it will automatically lose its tax-exempt status.
- Redesigned Form 990 and Instructions. The Form 990 has been redesigned for 2008 and future years. The new form consists of an 11-page, 11-part core form that is required to be completed by all organizations that file Form 990. It also consists of 16 schedules to be completed by those organizations that satisfy the applicable requirements for each schedule.
- Elimination of the advance public charity status. New regulations eliminate the advance ruling process for a section 501(c)(3) organization. Under the new regulations, a new section 501(c)(3) organization will be classified as a publicly supported organization and not a private foundation if it can show when it applies for tax-exempt status that it reasonably can be expected to be publicly supported. The new rules no longer require the organization to file Form 8734 after completing its first 5 tax years. The new rules apply to organizations with advance rulings expiring on or after June 9, 2008.
- Report significant new or changed program services and changes to organizational documents. An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to the IRS Exempt Organizations Determinations (EO Determinations). EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents.
- Electronic filing requirement for large organizations. For tax years ending on or after December 31, 2006, only organizations that file 250 returns during the calendar year and that have total assets of $10 million or more are required to file Form 990 electronically.
- Section 501(c)(15) gross receipts. The definition of gross receipts for purposes of determining whether small insurance companies qualify as tax-exempt under section 501(c)(15) has changed. See Notice 2006-42, 2006-19 I.R.B. 878.
- Prohibited tax shelter transactions. New excise taxes are imposed under section 4965 on certain tax-exempt organizations entering into prohibited tax shelter transactions.
- Pension Protection Act of 2006 tax changes. The Pension Protection Act of 2006 made numerous changes to the tax law provisions affecting tax-exempt organizations. Unless otherwise noted, most of the changes became effective on August 17, 2006.
- Section 501(c)(3) organizations must make their Form 990-T open for public inspection for a period of 3 years from the date the Form 990-T is required to be filed (determined with regard to any extension of time for filing) or is actually filed, whichever is later.
- Increase in excise taxes relating to public charities, social welfare organizations, and private foundations.
- Additional standards for credit counseling organizations.
- Definition of convention or association of churches has been modified.
- Entities not required to file Form 990 or 990-EZ must file new Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ.
- Requirements of disclosure to state officials relating to exempt organizations has been modified.
- Excise taxes imposed on excess benefit transactions involving donor advised funds and sponsoring organizations.
- New excise taxes on Prohibited Tax Shelter Transactions.
This publication discusses the rules and procedures for organizations that seek recognition of exemption from federal income tax under section 501(a) of the Internal Revenue Code (the Code). It explains the procedures you must follow to obtain an appropriate ruling or determination letter recognizing your organization's exemption, as well as certain other information that applies generally to all exempt organizations. To qualify for exemption under the Code, your organization must be organized for one or more of the purposes specifically designated in the Code. Organizations that are exempt under section 501(a) include those organizations described in section 501(c). Section 501(c) organizations are covered in this publication.
Chapter 1 provides general information about the procedures for obtaining recognition of tax-exempt status.
Chapter 2 contains information about annual filing requirements and other matters that may affect your organization's tax-exempt status.
Chapter 3 contains detailed information on various matters affecting section 501(c)(3) organizations, including a section on the determination of private foundation status.
Chapter 4 includes separate sections for specific types of organizations described in section 501(c).
Chapter 5 provides information on when excise taxes may be imposed.taxmap/pubs/p557-000.htm#en_us_publink1000199813
Certain organizations that may qualify for exemption are not discussed in this publication, although they are included in the Organization Reference Chart
. These organizations (and the Code sections that apply to them) are as follows.
|Corporations organized under Acts of Congress||501(c)(1)|
|Teachers' retirement fund associations||501(c)(11)|
|Mutual insurance companies||501(c)(15)|
|Corporations organized to finance crop operations||501(c)(16)|
|Employee funded pension trusts (created before June 25, 1959)||501(c)(18)|
|Withdrawal liability payment fund||501(c)(22)|
|Veterans' organizations (created before 1880)||501(c)(23)|
|National Railroad Retirement Investment Trust||501(c)(28)|
|Religious and apostolic associations||501(d)|
|Cooperative hospital service organizations||501(e)|
|Cooperative service organizations of operating educational organizations||501(f)|
Section 501(c)(24) organizations (section 4049 ERISA trusts) are neither discussed in the text nor listed in the Organization Reference Chart.
Likewise, farmers' cooperative associations that qualify for exemption under section 521, qualified state tuition programs described in section 529, and pension, profit-sharing, and stock bonus plans described in section 401(a) are not discussed in this publication. If you think your organization falls within one of these categories, contact the IRS for any additional information you need. For telephone assistance, call 1-877-829-5500.
Check the Table of Contents at the beginning of this publication to determine whether your organization is described in this publication. If it is, read the chapter (or section) that applies to your type of organization for the specific information you must give when applying for recognition of exemption.taxmap/pubs/p557-000.htm#en_us_publink1000199815
This chart enables you to locate at a glance the section of the Code under which your organization might qualify for exemption. It also shows the required application form and, if your organization meets the exemption requirements, the annual return to be filed (if any), and whether or not a contribution to your organization will be deductible by a donor. It also describes each type of qualifying organization and the general nature of its activities.
You may use this chart to determine the Code section that you think applies to your organization. Any correspondence with the IRS (in requesting forms or otherwise) will be expedited if you indicate in your correspondence the appropriate Code section. Check the IRS website, IRS.gov, for the latest updates.taxmap/pubs/p557-000.htm#en_us_publink1000199816
We welcome your comments about this publication and your suggestions for future editions.
You can e-mail us while visiting our website at IRS.gov.
You can write to us at the following address:
Internal Revenue Service
TEGE and Specialty Forms and Publications Branch
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
If you wish telephone assistance, please call 1-877-829-5500. This toll-free telephone service is available Monday through Friday.