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E-file 2012

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E-file 2012

E-file 2012 7. E-file 2012   Figuring Gross Profit Table of Contents Introduction Items To Check Testing Gross Profit AccuracyExample. E-file 2012 Additions to Gross Profit Introduction After you have figured the gross receipts from your business (chapter 5) and the cost of goods sold (chapter 6), you are ready to figure your gross profit. E-file 2012 You must determine gross profit before you can deduct any business expenses. E-file 2012 These expenses are discussed in chapter 8. E-file 2012 If you are filing Schedule C-EZ, your gross profit is your gross receipts plus certain other amounts, explained later under Additions to Gross Profit. E-file 2012 Businesses that sell products. E-file 2012   If you are filing Schedule C, figure your gross profit by first figuring your net receipts. E-file 2012 Figure net receipts (line 3) on Schedule C by subtracting any returns and allowances (line 2) from gross receipts (line 1). E-file 2012 Returns and allowances include cash or credit refunds you make to customers, rebates, and other allowances off the actual sales price. E-file 2012   Next, subtract the cost of goods sold (line 4) from net receipts (line 3). E-file 2012 The result is the gross profit from your business. E-file 2012 Businesses that sell services. E-file 2012   You do not have to figure the cost of goods sold if the sale of merchandise is not an income-producing factor for your business. E-file 2012 Your gross profit is the same as your net receipts (gross receipts minus any refunds, rebates, or other allowances). E-file 2012 Most professions and businesses that sell services rather than products can figure gross profit directly from net receipts in this way. E-file 2012 Illustration. E-file 2012   This illustration of the gross profit section of the income statement of a retail business shows how gross profit is figured. E-file 2012 Income Statement Year Ended December 31, 2013 Gross receipts $400,000 Minus: Returns and allowances 14,940 Net receipts $385,060 Minus: Cost of goods sold 288,140 Gross profit $96,920   The cost of goods sold for this business is figured as follows: Inventory at beginning of year $37,845 Plus: Purchases $285,900   Minus: Items withdrawn for personal use 2,650 283,250 Goods available for sale $321,095 Minus: Inventory at end of year 32,955 Cost of goods sold $288,140 Items To Check Consider the following items before figuring your gross profit. E-file 2012 Gross receipts. E-file 2012   At the end of each business day, make sure your records balance with your actual cash and credit receipts for the day. E-file 2012 You may find it helpful to use cash registers to keep track of receipts. E-file 2012 You should also use a proper invoicing system and keep a separate bank account for your business. E-file 2012 Sales tax collected. E-file 2012   Check to make sure your records show the correct sales tax collected. E-file 2012   If you collect state and local sales taxes imposed on you as the seller of goods or services from the buyer, you must include the amount collected in gross receipts. E-file 2012   If you are required to collect state and local taxes imposed on the buyer and turn them over to state or local governments, you generally do not include these amounts in income. E-file 2012 Inventory at beginning of year. E-file 2012   Compare this figure with last year's ending inventory. E-file 2012 The two amounts should usually be the same. E-file 2012 Purchases. E-file 2012   If you take any inventory items for your personal use (use them yourself, provide them to your family, or give them as personal gifts, etc. E-file 2012 ) be sure to remove them from the cost of goods sold. E-file 2012 For details on how to adjust cost of goods sold, see Merchandise withdrawn from sale in chapter 6. E-file 2012 Inventory at end of year. E-file 2012   Check to make sure your procedures for taking inventory are adequate. E-file 2012 These procedures should ensure all items have been included in inventory and proper pricing techniques have been used. E-file 2012   Use inventory forms and adding machine tapes as the only evidence for your inventory. E-file 2012 Inventory forms are available at office supply stores. E-file 2012 These forms have columns for recording the description, quantity, unit price, and value of each inventory item. E-file 2012 Each page has space to record who made the physical count, who priced the items, who made the extensions, and who proofread the calculations. E-file 2012 These forms will help satisfy you that the total inventory is accurate. E-file 2012 They will also provide you with a permanent record to support its validity. E-file 2012   Inventories are discussed in chapter 2. E-file 2012 Testing Gross Profit Accuracy If you are in a retail or wholesale business, you can check the accuracy of your gross profit figure. E-file 2012 First, divide gross profit by net receipts. E-file 2012 The resulting percentage measures the average spread between the merchandise cost of goods sold and the selling price. E-file 2012 Next, compare this percentage to your markup policy. E-file 2012 Little or no difference between these two percentages shows that your gross profit figure is accurate. E-file 2012 A large difference between these percentages may show that you did not accurately figure sales, purchases, inventory, or other items of cost. E-file 2012 You should determine the reason for the difference. E-file 2012 Example. E-file 2012   Joe Able operates a retail business. E-file 2012 On the average, he marks up his merchandise so that he will realize a gross profit of 331/3% on its sales. E-file 2012 The net receipts (gross receipts minus returns and allowances) shown on his income statement is $300,000. E-file 2012 His cost of goods sold is $200,000. E-file 2012 This results in a gross profit of $100,000 ($300,000 − $200,000). E-file 2012 To test the accuracy of this year's results, Joe divides gross profit ($100,000) by net receipts ($300,000). E-file 2012 The resulting 331/3% confirms his markup percentage of 331/3%. E-file 2012 Additions to Gross Profit If your business has income from a source other than its regular business operations, enter the income on line 6 of Schedule C and add it to gross profit. E-file 2012 The result is gross business income. E-file 2012 If you use Schedule C-EZ, include the income on line 1 of the schedule. E-file 2012 Some examples include income from an interest-bearing checking account, income from scrap sales, income from certain fuel tax credits and refunds, and amounts recovered from bad debts. E-file 2012 Prev  Up  Next   Home   More Online Publications

Tax Topic Index

Topic 123

These Tax Topics contain general individual and business tax information. If you don't find the answer to your question below, also check Frequently Asked Questions, Interactive Tax Assistant (ITA) and Tax Trails.

IRS Help Available Topic 100
IRS Services – Volunteer Tax Assistance, Outreach Programs and Identity Theft Topic 101
Tax Assistance for Individuals with Disabilities and the Deaf and Hard of Hearing Topic 102
Tax Help for Small Businesses and the Self-Employed Topic 103
Taxpayer Advocate Service – Your Voice at the IRS Topic 104
Armed Forces Tax Information Topic 105
Tax Relief in Disaster Situations Topic 107
IRS Procedures Topic 150
Your Appeal Rights Topic 151
Refund Information Topic 152
What To Do if You Haven't Filed Your Tax Return Topic 153
Form W-2 and Form 1099-R (What to Do if Incorrect or Not Received) Topic 154
Forms and Publications – How to Order Topic 155
Copy of Your Tax Return – How to Get One Topic 156
Change of Address – How to Notify the IRS Topic 157
Ensuring Proper Credit of Payments Topic 158
Prior Year(s) Form W-2 (How to Get a Copy) Topic 159
Form 1099-A (Acquisition or Abandonment of Secured Property) and Form 1099-C (Cancellation of Debt) Topic 160
Collection Topic 200
The Collection Process Topic 201
Tax Payment Options Topic 202
Refund Offsets for Unpaid Child Support, Certain Federal and State Debts, and Unemployment Compensation Debts Topic 203
Offers In Compromise Topic 204
Innocent Spouse Relief (Including Separation of Liability and Equitable Relief) Topic 205
Dishonored Payments Topic 206
Alternative Filing Methods Topic 250
Substitute Tax Forms Topic 253
How to Choose a Tax Return Preparer Topic 254
Self-Select PIN Signature Method for Online Registration Topic 255
General Information Topic 300
When, Where, and How to File Topic 301
Checklist of Common Errors When Preparing Your Tax Return Topic 303
Extensions of Time to File Your Tax Return Topic 304
Recordkeeping Topic 305
Penalty for Underpayment of Estimated Tax Topic 306
Backup Withholding Topic 307
Amended Returns Topic 308
Roth IRA Contributions Topic 309
Coverdell Education Savings Accounts Topic 310
Power of Attorney Information Topic 311
Disclosure Authorizations Topic 312
Qualified Tuition Programs (QTPs) Topic 313
Which Forms to File Topic 350
Which Form – 1040, 1040A, or 1040EZ? Topic 352
Decedents Topic 356
Types of Income Topic 400
Wages and Salaries Topic 401
Interest Received Topic 403
Dividends Topic 404
Business Income Topic 407
Capital Gains and Losses Topic 409
Pensions and Annuities Topic 410
Pensions – The General Rule and the Simplified Method Topic 411
Lump-Sum Distributions Topic 412
Rollovers from Retirement Plans Topic 413
Rental Income and Expenses Topic 414
Renting Residential and Vacation Property Topic 415
Farming and Fishing Income Topic 416
Earnings for Clergy Topic 417
Unemployment Compensation Topic 418
Gambling Income and Losses Topic 419
Bartering Income Topic 420
Scholarship and Fellowship Grants Topic 421
Social Security and Equivalent Railroad Retirement Benefits Topic 423
401(k) Plans Topic 424
Passive Activities – Losses and Credits Topic 425
Stock Options Topic 427
Traders in Securities (Information for Form 1040 Filers) Topic 429
Receipt of Stock in a Demutualization Topic 430
Canceled Debt – Is It Taxable or Not? Topic 431
Adjustments to Income Topic 450
Individual Retirement Arrangements (IRAs) Topic 451
Alimony Paid Topic 452
Bad Debt Deduction Topic 453
Moving Expenses Topic 455
Student Loan Interest Deduction Topic 456
Tuition and Fees Deduction Topic 457
Educator Expense Deduction Topic 458
Itemized Deductions Topic 500
Should I Itemize? Topic 501
Medical and Dental Expenses Topic 502
Deductible Taxes Topic 503
Home Mortgage Points Topic 504
Interest Expense Topic 505
Charitable Contributions Topic 506
Miscellaneous Expenses Topic 508
Business Use of Home Topic 509
Business Use of Car Topic 510
Business Travel Expenses Topic 511
Business Entertainment Expenses Topic 512
Educational Expenses Topic 513
Employee Business Expenses Topic 514
Casualty, Disaster, and Theft Losses (Including Federally Declared Disaster Areas) Topic 515
Tax Computation Topic 550
Standard Deduction Topic 551
Tax and Credits Figured by the IRS Topic 552
Tax on a Child's Investment Income Topic 553
Self-Employment Tax Topic 554
Alternative Minimum Tax Topic 556
Additional Tax on Early Distributions from Traditional and ROTH IRAs Topic 557
Additional Tax on Early Distributions from Retirement Plans, Other Than IRAs Topic 558
Net Investment Income Tax Topic 559
Additional Medicare Tax Topic 560
Tax Credits Topic 600
Earned Income Credit Topic 601
Child and Dependent Care Credit Topic 602
Adoption Credit and Adoption Assistance Programs Topic 607
Excess Social Security and RRTA Tax Withheld Topic 608
Retirement Savings Contributions Credit Topic 610
Repayment of the First-time Homebuyer Credit Topic 611
IRS Notices Topic 650
Notices – What to Do Topic 651
Notice of Underreported Income – CP-2000 Topic 652
IRS Notices and Bills, Penalties and Interest Charges Topic 653
Basis of Assets, Depreciation, and Sale of Assets Topic 700
Sale of Your Home Topic 701
Basis of Assets Topic 703
Depreciation Topic 704
Installment Sales Topic 705
Employer Tax Information Topic 750
Social Security and Medicare Withholding Rates Topic 751
Form W-2 – Where, When, and How to File Topic 752
Form W-4 – Employee's Withholding Allowance Certificate Topic 753
Employer Identification Number (EIN) – How to Apply Topic 755
Employment Taxes for Household Employees Topic 756
Forms 941 and 944 – Deposit Requirements Topic 757
Form 941 – Employer's Quarterly Federal Tax Return and Form 944 – Employer's Annual Federal Tax Return Topic 758
Form 940 – Employer's Annual Federal Unemployment (FUTA) Tax Return – Filing and Deposit Requirements Topic 759
Reporting and Deposit Requirements for Agricultural Employers Topic 760
Tips – Withholding and Reporting Topic 761
Independent Contractor vs. Employee Topic 762
The Affordable Care Act Topic 763
Electronic Media Filers – 1099 Series and Related Information Returns Topic 800
Who Must File Information Returns Electronically Topic 801
Applications, Forms, and Information Topic 802
Waivers and Extensions Topic 803
Test Files and Combined Federal and State Filing Topic 804
Electronic Filing of Information Returns Topic 805
Tax Information for Aliens and U.S. Citizens Living Abroad Topic 850
Resident and Nonresident Aliens Topic 851
Foreign Tax Credit Topic 856
Individual Taxpayer Identification Number (ITIN) – Form W-7 Topic 857
Alien Tax Clearance Topic 858
Tax Information for Residents of Puerto Rico Topic 900
Is a Person With Income from Puerto Rican Sources Required to File a U.S. Federal Income Tax Return? Topic 901
Credits and Deductions for Taxpayers With Puerto Rican Source Income That is Exempt From U.S. Tax Topic 902
Federal Employment Tax in Puerto Rico Topic 903
Tax Assistance for Residents of Puerto Rico Topic 904

Page Last Reviewed or Updated: March 20, 2014

The E-file 2012

E-file 2012 1. E-file 2012   Application, Approval, and Appeal Procedures Table of Contents Introduction Topics - This chapter discusses: Application ProceduresForms Required Required Inclusions Miscellaneous Procedures Rulings and Determination LettersEffective Date of Exemption Revocation or Modification of Exemption Appeal ProceduresAppeals Office Consideration EO Technical Consideration Administrative Remedies Appeal to Courts Group Exemption LetterCentral Organization Application Procedure Keeping the Group Exemption Letter in Force Events Causing Loss of Group Exemption Introduction If your organization is one of the organizations described in this publication and is seeking recognition of tax-exempt status from the IRS, you should follow the procedures described in this chapter and the instructions that accompany the appropriate application forms. E-file 2012 For information on section 501(c)(3) organizations, go to Section 501(c)(3) Organizations chapter 3. E-file 2012 If your organization is seeking exemption under one of the other paragraphs of section 501(c), see chapter 4. E-file 2012 Topics - This chapter discusses: Application procedures that generally apply to all organizations discussed in this publication, including the application forms; Rulings and determination letters (approvals/disapprovals); Appeal procedures available if an adverse determination letter is proposed; and Group exemption letters. E-file 2012 Application Procedures Oral requests for recognition of exemption will not be considered by the IRS. E-file 2012 Your application for tax-exempt status must be in writing using the appropriate forms as discussed below. E-file 2012 Forms Required If your organization is seeking recognition of exemption from federal income tax, it must use a specific application prescribed by the IRS in Revenue Procedure 2013–9, sec. E-file 2012 3. E-file 2012 If your organization is a central organization with exempt status, see Group Exemption Letter , later. E-file 2012 All applications must be signed by an authorized individual. E-file 2012 Form 1023, Application for Recognition of Exemption. E-file 2012   File Form 1023 if you are seeking recognition of exemption under section: 501(c)(3) Corporations, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports, or prevention of cruelty for children or animals, 501(e) Cooperative hospital service organization, 501(f) Cooperative service organization of operating educational organizations, 501(k) Certain organizations providing child care, 501(n) Charitable risk pools, and 501(q) Credit counseling organizations. E-file 2012 Form 1024, Application for Recognition of Exemption Under Section 501(a). E-file 2012    File Form 1024 if you are seeking recognition of exemption under section: 501(c)(2) Title holding corporations, 501(c)(4) Civic leagues, social welfare organizations, 501(c)(5) Labor, agricultural, or horticultural organizations, 501(c)(6) Business leagues, chambers of commerce, etc. E-file 2012 , 501(c)(7) Social clubs, 501(c)(8) Fraternal beneficiary societies, orders, or associations, 501(c)(9) Voluntary employees’ beneficiary associations, 501(c)(10) Domestic fraternal societies, orders, etc. E-file 2012 , 501(c)(12) Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies, 501(c)(13) Cemetery companies, 501(c)(15) Mutual insurance companies or associations, 501(c)(17) Trusts providing for the payment of supplemental unemployment compensation benefits, 501(c)(19) A post, organization, auxiliary unit, etc. E-file 2012 of past or present members of the Armed Forces of the United States, and 501(c)(25) Title holding corporations or trusts. E-file 2012  Form 8718, User Fee for Exempt Organization Determination Letter Request, must also be sent along with Form 1024. E-file 2012 Letter application. E-file 2012   If your organization is seeking recognition of exemption under section 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), or (29), submit a letter application with Form 8718. E-file 2012 See Required Inclusions for the information to include with the letter application. E-file 2012 Form 1028. E-file 2012   Use Form 1028 if your organization is a farmers’ cooperative seeking recognition of exemption under section 521. E-file 2012 You must also submit Form 8718. E-file 2012 Form 8871. E-file 2012    Use Form 8871 if you are a political party or campaign committee for a candidate for federal, state or local office seeking to be treated as tax-exempt under section 527. E-file 2012 See Political Organization Income Tax Return , later. E-file 2012    Some organizations do not have to use specific application forms. E-file 2012 The application your organization must use is specified in the chapter in this publication dealing with your kind of organization. E-file 2012 It is also shown in the Organization Reference Chart, later. E-file 2012 Power of attorney. E-file 2012   If your organization expects to be represented by an individual such as an attorney, CPA, officer or other person authorized to practice before the IRS, whether in person or by correspondence, you must file a Form 2848 with your exemption application. E-file 2012 The power of attorney must specifically authorize an individual to represent your organization. E-file 2012 You cannot name an organization, firm, etc. E-file 2012 as your representative. E-file 2012 Form 2848, Power of Attorney and Declaration of Representative, can be used for this purpose. E-file 2012 The categories of individuals who can represent you before the IRS are listed on the form. E-file 2012 Non-exemption for terrorist organizations. E-file 2012   An organization that is identified or designated as a terrorist organization within the meaning of section 501(p)(2) is not eligible to apply for recognition of exemption. E-file 2012 User fee. E-file 2012   The law requires the payment of a user fee for determination letter requests such as your application for recognition of tax-exempt status. E-file 2012 If you are filing Form 1023, user fee information is included in Part XI. E-file 2012 If you are required to apply for recognition of exemption by submitting Form 1024, a letter application, etc. E-file 2012 and you must pay a user fee, you should use Form 8718 to figure the amount of your user fee and to pay it. E-file 2012 Your payment must accompany your request. E-file 2012 The IRS will not process a request unless the fee has been paid. E-file 2012    For the current user fee amount and processing time for applications go to IRS. E-file 2012 gov and select “Charities and Non-Profits” from the buttons near the top. E-file 2012 Then select the underlined link “How to Apply To Be Tax-Exempt” for the latest user fees or I want to check the status of my application for more information. E-file 2012 You can also call 1-877-829-5500. E-file 2012 Required Inclusions Employer identification number (EIN). E-file 2012   Every exempt organization must have an EIN, whether or not it has any employees. E-file 2012 An EIN is required before an exemption application is submitted. E-file 2012 Information on how to apply for an EIN by using one of the following methods can be found at Employer ID Numbers (EIN): Online— This is the preferred method for requesting an EIN. E-file 2012 The EIN is issued immediately once the application information is validated. E-file 2012 By telephone at 1-800-829-4933, from 7:00 a. E-file 2012 m. E-file 2012 to 7:00 p. E-file 2012 m. E-file 2012 local time, Monday through Friday. E-file 2012 The EIN is provided over the phone to an authorized individual. E-file 2012 By mailing or faxing Form SS-4, Application for Employer Identification Number. E-file 2012 If the faxed Form SS-4 includes the taxpayer's fax number, a fax will be sent back with the EIN within four (4) business days. E-file 2012    Use only one method for each entity so you do not receive more than one EIN for an entity. E-file 2012   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. E-file 2012 Organizing documents. E-file 2012   Your application should include a copy of the organizing or enabling document that is signed by a principal officer or is accompanied by a written declaration signed by an authorized individual certifying that the document is a complete and accurate copy of the original or meets the requirements of a conformed copy. E-file 2012   If your organizing or enabling document are articles of incorporation, include evidence that it was filed and approved by a state official. E-file 2012 (For example, a stamped “Filed” copy dated by the Secretary of State is prima facie evidence that it was filed and approved by a state official. E-file 2012 ) A copy of the articles of incorporation can also be submitted with a written declaration signed by an authorized individual indicating the copy is complete and was filed and approved by the state, including the date filed. E-file 2012 Bylaws. E-file 2012   Bylaws alone are not organizing documents. E-file 2012 However, if your organization has adopted bylaws, include a current copy. E-file 2012 The bylaws need not be signed if submitted as an attachment. E-file 2012   If your organization's name has been officially changed by an amendment to your organizing instruments, you should also attach a conformed copy of that amendment to your application. E-file 2012    Bylaws may be considered an organizing document only if they are properly structured (includes name, purpose, signatures, and intent to form an organization). E-file 2012 Conformed copy. E-file 2012   A conformed copy is a copy that agrees with the original and all amendments to it. E-file 2012 If the original document required a signature, the copy should either be signed by a principal officer or, if not signed, be accompanied by a written declaration signed by an authorized officer of the organization. E-file 2012 With either option, the officer must certify that the document is a complete and accurate copy of the original. E-file 2012 A certificate of incorporation should be approved and dated by an appropriate state official. E-file 2012 Attachments. E-file 2012    When submitting attachments, every attachment should show your organization's name and EIN. E-file 2012 It should also state that it is an attachment to your application form and identify the part and line item number to which it applies. E-file 2012 Original documents. E-file 2012   Do not submit original documents because they become part of the IRS file and cannot be returned. E-file 2012 Description of activities. E-file 2012   Your application must include a full description of the proposed activities of your organization, including each of the fundraising activities of a section 501(c)(3) organization and a narrative description of anticipated receipts and contemplated expenditures. E-file 2012 When describing the activities in which your organization expects to engage, you must include the standards, criteria, procedures, or other means that your organization adopted or planned for carrying out those activities. E-file 2012   To determine the information you need to provide, you should study the part of this publication that applies to your organization. E-file 2012 The appropriate chapter will describe the purposes and activities that your organization must pursue, engage in, and include in your application in order to achieve exempt status. E-file 2012   Often, your organization's articles of organization (or other organizing instruments) contain descriptions of your organization's purposes and activities. E-file 2012   Your application should describe completely and in detail your past, present, and planned activities. E-file 2012 Financial data. E-file 2012   You must include in your application financial statements showing your receipts and expenditures and a balance sheet for the current year and the 3 preceding years (or for the number of years your organization was in existence, if less than 4 years). E-file 2012 For each accounting period, you must describe the sources of your receipts and the nature of your expenditures. E-file 2012   If you have not yet begun operations, or have operated for less than 1 year, a proposed budget for 2 full accounting periods and a current statement of assets and liabilities will be acceptable. E-file 2012 Exempt status established in application. E-file 2012   If your application and its supporting documents show that your organization meets the requirements for tax-exempt status under the Code section you applied, the IRS will issue a favorable determination letter or ruling. E-file 2012 Miscellaneous Procedures To help in processing your application, be sure to attach all schedules, statements, and other documents required by the application form. E-file 2012 If you do not attach them, you may have to resubmit your application or you may otherwise encounter a delay in processing your application. E-file 2012 Incomplete application. E-file 2012   If an application is not complete and does not contain all the required attachments found under Required Inclusions, the IRS may return it to you for completion. E-file 2012 The IRS may keep the application and send a letter requesting the missing information if most of the information has been received. E-file 2012   If the IRS returns the application or requests additional information from you, that application will be considered filed on the date the substantially completed application is postmarked, or if no postmark, received at the IRS. E-file 2012   Generally, the user fee will not be refunded if an incomplete application is filed. E-file 2012   Additional information may be requested if necessary to clarify the nature of your organization. E-file 2012 Application made under wrong paragraph of section 501(c). E-file 2012   Occasionally, an organization appears to qualify for exemption under a paragraph of section 501(c) that is different from the one for which the organization applied. E-file 2012 If the application was made on Form 1024, which applies to more than one paragraph of section 501(c), the organization can be recognized as exempt under any paragraph to which the form applies if the organization has agreed to have its application considered under that paragraph. E-file 2012 It must also supply any additional information required for the application under the new paragraph. E-file 2012 Different application form needed. E-file 2012   If a different application form is required for your organization, the IRS will so advise your organization and will provide the appropriate application form for your convenience in reapplying under that paragraph, if you wish to do so. E-file 2012 Although supporting information previously furnished need not be duplicated, you must provide any necessary additional information required for the application. E-file 2012 If your reply is not received within a limited time, your application will be processed only for the paragraph under which you originally applied. E-file 2012   When a specific application form is needed for the paragraph under which your organization qualifies, that form is required before a letter recognizing exemption can be issued. E-file 2012 This includes cases in which a determination letter is modified to recognize an organization's exempt status under a paragraph other than the paragraph under which it originally established exemption. E-file 2012 IRS responses. E-file 2012   Organizations that submit a complete application will receive an acknowledgment from the IRS. E-file 2012 Others will receive a letter requesting more information or returning an incomplete application. E-file 2012 Applicants also will be notified if the application is forwarded to EO Technical Office for consideration. E-file 2012 These letters will be sent out as soon as possible after receipt of the organization's application. E-file 2012 Withdrawal of application. E-file 2012   An application may be withdrawn at any time before the issuance of a ruling or determination letter upon the written request of a principal officer or authorized representative of your organization. E-file 2012 However, the withdrawal will not prevent the information contained in the application from being used by the IRS in any subsequent examination of your organization's returns. E-file 2012 The information forwarded with an application will not be returned to your organization and, generally, when an application is withdrawn, the user fee paid will not be refunded. E-file 2012 Requests for withholding of information from the public. E-file 2012   The law requires many exempt organizations and private foundations to make their application forms and annual information returns available for public inspection. E-file 2012 The law also requires the IRS to make available for public inspection, in accordance with section 6104 and the related regulations, your approved application for recognition of exemption (including any papers submitted in support of the application) and the ruling or determination letter (discussed later, under Rulings and Determination Letters . E-file 2012 )   Any information submitted in the application or in support of it that relates to any trade secret, patent, process, style of work, or apparatus, upon request, can be withheld from public inspection if the IRS determines that the disclosure of such information would adversely affect the organization. E-file 2012 Your request must: Identify the material to be withheld (the document, page, paragraph, and line) by clearly marking it “Not Subject To Public Inspection. E-file 2012 ” Include the reasons for your organization's position that the information is of the type that can be withheld from public inspection. E-file 2012 Be filed with the office where your organization files the documents in which the material to be withheld is contained. E-file 2012 Where to file. E-file 2012   Send your application for exempt status and Form 8718, (if required) to: Internal Revenue Service PO Box 12192 Covington, KY 41012-0192   Your application will be considered by EO Determinations, who will either issue a favorable determination letter to your organization, issue an adverse determination letter denying the exempt status claimed in the application, or refer the case to the Exempt Organizations Technical Office (EO Technical). E-file 2012    Form 8940, Request for Miscellaneous Determination. E-file 2012 You can request miscellaneous determinations under sections 507, 509(a), 4940, 4942, 4945, and 6033 with Form 8940. E-file 2012 Nonexempt charitable trusts also file Form 8940 for an initial determination of section 509(a)(3) status or change to their type. E-file 2012 See Form 8940 and instructions for more information. E-file 2012 Requests other than applications. E-file 2012 Requests other than applications for recognition of exemption or Form 8940 (for example, requests for rulings involving feeder organizations, application of excise taxes to activities of private foundations, taxation of unrelated business income, etc. E-file 2012 ) should be sent to: Internal Revenue Service  Attention: EO Letter Rulings PO Box 27720 McPherson Station Washington, DC 20038 These requests, similar to applications for recognition of exemption previously discussed, must be accompanied by the appropriate user fee. E-file 2012 The schedule for user fees, including those for requests other than applications, can be found in Revenue Procedure 2013-8, 2013-1 I. E-file 2012 R. E-file 2012 B. E-file 2012 237. E-file 2012 Referral to EO Technical. E-file 2012   EO Determinations will refer to EO Technical any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. E-file 2012 EO Determinations can request technical advice on any technical or procedural question that cannot be resolved on the basis of law, regulations, or a clearly applicable revenue ruling or other published precedent. E-file 2012 An organization can request that an issue be referred to EO Technical for technical advice if it feels that a lack of uniformity exists as to the disposition of the issue or if an issue is so unusual or complex as to warrant consideration by EO Technical. E-file 2012 If a determination letter is issued based on technical advice from EO Technical regarding qualification for exemption or foundation status, no further administrative appeal is available on the issue that was the subject of technical advice. E-file 2012 Reminder. E-file 2012   The law requires payment of a user fee for determination letter requests. E-file 2012 Go to IRS. E-file 2012 gov/Charities and select Current User Fees-Exempt Organizations to find the required payment. E-file 2012 Payment must accompany each request. E-file 2012 Rulings and Determination Letters Elimination of the advance public charity status. E-file 2012   New regulations eliminate the advance ruling process for a section 501(c)(3) organization. E-file 2012 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. E-file 2012 The new rules no longer require the organization to file Form 8734, Support Schedule for Advance Ruling Period, after completing its first 5 tax years. E-file 2012 See Elimination of the Advance Ruling Process . E-file 2012 An organization must describe fully the activities in which it expects to engage. E-file 2012 This includes standards, procedures, or other means adopted or planned by the organization for carrying out its activities, expected sources of funds, and the nature of its contemplated expenses. E-file 2012 When an organization does not supply the information previously mentioned under Application Procedures , or fails to furnish a sufficiently detailed description of its proposed activities to permit a conclusion that it will clearly be exempt, a proposed adverse determination letter or ruling may be issued. E-file 2012 Adverse determination. E-file 2012   A proposed adverse ruling or determination letter will be issued to an organization that has not provided sufficiently detailed information to establish that it qualifies for exemption or if the information provided establishes that it does not qualify for exemption. E-file 2012 An organization can appeal a proposed adverse ruling or determination letter. E-file 2012 See Appeal Procedures , later. E-file 2012 Effective Date of Exemption A ruling or determination letter recognizing exemption is usually effective as of the date of formation of an organization if, during the period before the date of the ruling or determination letter, its purposes and activities were those required by the law. E-file 2012 (See Application for Recognition of Exemption in chapter 3 for the special rule for organizations applying for recognition of exemption under section 501(c)(3). E-file 2012 ) Upon obtaining recognition of exemption, the organization can file a claim for a refund of income taxes paid for the period for which its exempt status is recognized. E-file 2012 If an organization is required to alter its activities or substantially amend its charter to qualify, the ruling or determination letter recognizing exemption will be effective as of the date specified in the letter. E-file 2012 If a nonsubstantive amendment is made, such as correction of a clerical error in the enabling instrument or the addition of a dissolution clause, exemption will ordinarily be recognized as of the date of formation if the activities of the organization before the ruling or determination are consistent with the exemption requirements. E-file 2012 A ruling or determination letter recognizing exemption cannot be relied on if there is a material change, inconsistent with exemption, in the character, the purpose, or the method of operation of the organization. E-file 2012 Also, a ruling or determination letter cannot be relied on if it is based on any inaccurate material factual representations. E-file 2012 Revocation or Modification of Exemption A ruling or determination letter recognizing exemption may be revoked or modified by: A notice to the organization to which the ruling or determination letter originally was issued, Enactment of legislation or ratification of a tax treaty, A decision of the United States Supreme Court, Issuance of temporary or final regulations, or Issuance of a revenue ruling, a revenue procedure, or other statement published in the Internal Revenue Bulletin or Cumulative Bulletin. E-file 2012 When revocation takes effect. E-file 2012   If the organization omitted or misstated a material fact, operated in a manner materially different from that originally represented, or, with regard to organizations to which section 503 applies, engaged in a prohibited transaction (such as diverting corpus or income from its exempt purpose), the revocation or modification may be retroactive. E-file 2012 Material change in organization. E-file 2012   If there is a material change, inconsistent with exemption, in the character, purpose, or method of operation of the organization, revocation or modification will ordinarily take effect as of the date of that material change. E-file 2012 Relief from retroactivity. E-file 2012   If a ruling or determination letter was issued in error or the IRS changed its position after issuing a letter or ruling, and if section 7805(b) relief is granted, retroactivity of the revocation or modification ordinarily will be limited to a date not earlier than that on which the original ruling or determination letter was modified or revoked. E-file 2012 For more information on requesting section 7805(b) relief, see Revenue Procedure 2013-4, 2013-1 I. E-file 2012 R. E-file 2012 B. E-file 2012 126, sec. E-file 2012 13 (or later update). E-file 2012 Foundations. E-file 2012   The determination of the effective date is the same for the revocation or modification of foundation status or operating foundation status unless the effective date is expressly covered by statute or regulations. E-file 2012 Written notice. E-file 2012   If an EO area manager concludes, as a result of examining an information return or considering information from any other source, that a ruling or determination letter should be revoked or modified, the organization will be advised in writing of the proposed action and the reasons for it. E-file 2012   The organization will also be advised of its right to protest the proposed action by requesting Appeals Office consideration. E-file 2012 The appeal procedures are discussed next. E-file 2012 Appeal Procedures If your organization applies for tax-exempt status and EO Determination decides your organization does not qualify, your organization will be advised of its rights to protest the determination by requesting Appeals Office consideration. E-file 2012 This process does not apply to determinations issued by EO Technical. E-file 2012 Your organization must submit a statement of its views fully explaining its reasoning. E-file 2012 The statement must be submitted within 30 days from the date of the adverse determination letter and must state whether it wishes Appeals Office consideration. E-file 2012 Representation. E-file 2012   A principal officer or trustee can represent an organization at any level of appeal within the IRS. E-file 2012 Also, an attorney, certified public accountant, or individual enrolled to practice before the IRS can represent the organization. E-file 2012   If the organization's representative attends a conference without a principal officer or trustee, the representative must file a proper power of attorney or a tax information authorization before receiving or inspecting confidential information. E-file 2012 Form 2848 or Form 8821, Tax Information Authorization, as appropriate (or any other properly written power of attorney or authorization), can be used for this purpose. E-file 2012 These forms can be obtained from the IRS. E-file 2012 For more information, see Publication 947, Practice Before the IRS and Power of Attorney. E-file 2012 Appeals Office Consideration EO Determinations will consider the statement protesting and appealing (hereinafter appealing) the adverse determination and decide if the information affects its determination. E-file 2012 If the appeal does not provide a basis to reconsider its adverse determination, it will forward the appeal and case file to the Appeals Office. E-file 2012 For more information about the role of the Appeals Office, see Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues. E-file 2012 The appeal should include the following information. E-file 2012 The organization's name, address, daytime telephone number, and employer identification number. E-file 2012 A statement that the organization wants to protest the determination. E-file 2012 A copy of the letter showing the determination you disagree with, or the date and symbols on the determination letter. E-file 2012 A statement of facts supporting the organization's position in any contested factual issue. E-file 2012 A statement outlining the law or other authority the organization is relying on. E-file 2012 A statement as to whether a conference at the Appeals Office is desired. E-file 2012 The statement of facts in item 4 must be declared true under penalties of perjury. E-file 2012 This may be done by adding to the protest the following signed declaration:   “Under penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and statements and, to the best of my knowledge and belief, it is true, correct, and complete. E-file 2012 ”           Signature. E-file 2012   If the organization's representative submits the appeal, a substitute declaration must be included, stating: That the representative prepared the appeal and accompanying documents, and Whether the representative knows personally that the statements of fact contained in the appeal and accompanying documents are true and correct. E-file 2012 Be sure the appeal contains all of the information requested. E-file 2012 Incomplete appeals will be returned for completion. E-file 2012 If a conference is requested, it will be held at the Appeals Office, unless the organization requests that the meeting be held at a field office convenient to both parties. E-file 2012 The Appeals Office, after considering the organization's appeal as well as information presented in any conference held, will notify the organization of its decision and issue an appropriate determination letter. E-file 2012 An adverse decision can be appealed to the courts (discussed later). E-file 2012 The Appeals Office must request technical advice from EO Technical on any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. E-file 2012 If an organization believes that its case involves such an issue, it should ask the Appeals Office to request technical advice. E-file 2012 Any determination letter issued on the basis of technical advice from EO Technical cannot be appealed to the Appeals Office for those issues that were the subject of the technical advice from EO Technical. E-file 2012 EO Technical Consideration If an application is referred to EO Technical for issuance of a ruling and an adverse ruling is issued, the organization will be informed of the basis for the conclusion, its right to file a protest within 30 days, and its right to have a conference with EO Technical. E-file 2012 Administrative Remedies In the case of an application under section 501(c)(3), all of the following actions, called administrative remedies, must be completed by your organization before an unfavorable ruling or determination letter from the IRS can be appealed to the courts. E-file 2012 The filing of a substantially completed application Form 1023 or group exemption request under section 501(c)(3) (described earlier in this chapter) or the filing of a request for a determination of foundation status (see Private Foundations and Public Charities in chapter 3). E-file 2012 In the case of a late-filed application, requesting relief under Regulations section 301. E-file 2012 9100 regarding applications for extensions of time for making an election or application for relief from tax (see Application for Recognition of Exemption in chapter 3). E-file 2012 The timely submission of all additional information requested to perfect an exemption application or request for determination of private foundation status. E-file 2012 Exhaustion of all administrative appeals available within the IRS, including protest of an adverse ruling issued by EO Technical in the case of an exemption application. E-file 2012 The actions just described will not be considered completed until the IRS has had a reasonable time to act upon the appeal or protest, as the case may be. E-file 2012 An organization will not be considered to have exhausted its administrative remedies before the earlier of: The completion of the steps just listed and the sending by certified or registered mail of a notice of final determination, or The expiration of the 270-day period in which the IRS has not issued a notice of final determination and the organization has taken, in a timely manner, all reasonable steps to secure a ruling or determination. E-file 2012 270-day period. E-file 2012   The 270-day period will be considered by the IRS to begin on the date a substantially completed Form 1023 or group exemption request is sent to the IRS. E-file 2012 See Application Procedures , earlier, for information needed to complete Form 1023. E-file 2012   If the application does not contain all of the required items, it will not be further processed and may be returned to the applicant for completion. E-file 2012 The 270-day period, in this event, will not be considered as starting until the date the application is remailed to the IRS with the requested information, or, if a postmark is not evident, on the date the IRS receives a substantially completed application. E-file 2012 Appeal to Courts If the IRS issues an unfavorable determination letter or ruling to your organization and you have exhausted all the administrative remedies just discussed, your organization can seek judicial remedies. E-file 2012 For example, if your organization has paid the tax resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a refund in a U. E-file 2012 S. E-file 2012 District Court or the U. E-file 2012 S. E-file 2012 Court of Federal Claims. E-file 2012 Or, if your organization elected not to pay the tax deficiency resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a redetermination of the tax deficiencies in the United States Tax Court. E-file 2012 For more information on these types of suits, get Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. E-file 2012 In certain situations, your organization can file suit for a declaratory judgment in the U. E-file 2012 S. E-file 2012 District Court for the District of Columbia, the U. E-file 2012 S. E-file 2012 Court of Federal Claims, or the U. E-file 2012 S. E-file 2012 Tax Court. E-file 2012 This remedy is available if your organization received an adverse notice of final determination, or if the IRS failed to make a timely determination on your initial or continuing qualification or classification as an exempt organization. E-file 2012 However, your exempt status claim must be as: An organization qualifying under section 501(c)(3), An organization to which a deduction for a contribution is allowed under section 170(c)(2), An organization that is a private foundation under section 509(a), A private operating foundation under section 4942(j)(3), or A cooperative organization that is exempt from tax under section 521. E-file 2012 Adverse notice of final determination. E-file 2012   The adverse notice of final determination referred to above is a ruling or determination letter sent by certified or registered mail holding that your organization: Is not described in section 501(c)(3) or section 170(c)(2), Is a private foundation as defined in section 4942(j)(3), or Is a public charity described in a part of section 509(a) or section 170(b)(1)(A) other than the part under which your organization requested classification. E-file 2012 Favorable court rulings - IRS procedure. E-file 2012   If a suit results in a final determination that your organization is exempt from tax, the IRS will issue a favorable ruling or determination letter, provided your organization has filed an application for exemption and submitted a statement that the underlying facts and applicable law are the same as in the period considered by the court. E-file 2012 Group Exemption Letter A group exemption letter is a ruling or determination letter issued to a central organization recognizing on a group basis the exemption under section 501(c) of subordinate organizations on whose behalf the central organization has applied for recognition of exemption. E-file 2012 A central organization is an organization that has one or more subordinates under its general supervision or control. E-file 2012 A subordinate organization is a chapter, local, post, or unit of a central organization. E-file 2012 A central organization may be a subordinate itself, such as a state organization that has subordinate units and is itself affiliated with a national (central) organization. E-file 2012 A subordinate organization may or may not be incorporated, but it must have an organizing document. E-file 2012 A subordinate that is organized and operated in a foreign country cannot be included in a group exemption letter. E-file 2012 A subordinate described in section 501(c)(3) cannot be included in a group exemption letter if it is a private foundation described in section 509(a). E-file 2012 If your organization is a subordinate controlled by a central organization (for example, a church, a veterans' organization, or a fraternal organization), you should check with the central organization to see if it has been issued a group exemption letter that covers your organization. E-file 2012 If it has, you do not have to file a separate application unless your organization no longer wants to be included in the group exemption letter. E-file 2012 If the group exemption letter does not cover your organization, ask your central organization about being included in the next annual group ruling update that it submits to the IRS. E-file 2012 Central Organization Application Procedure If your organization is a central organization with affiliated subordinates under its control, it can apply for a group exemption letter for its subordinates, provided it has obtained recognition of its own exemption before or concurrently with the group exemption. E-file 2012 You should make the application for such subordinates by letter instead of submitting either Form 1023 or 1024. E-file 2012 This procedure relieves each of the subordinates covered by a group exemption letter from filing its own application. E-file 2012 A central organization obtains its own recognition of exemption by sending its application to the IRS address shown on Form 8718 or Form 1023. E-file 2012 If the central organization has previously obtained recognition of its own exemption, it must indicate its employer identification number and the date of the letter recognizing its exemption. E-file 2012 It need not forward documents already submitted. E-file 2012 However, if it has not already done so, the central organization must submit a copy of any amendment to its governing instruments or internal regulations as well as any information about changes in its character, purposes, or method of operation. E-file 2012 Employer identification number. E-file 2012   The central organization must have an EIN before it submits a completed exemption or group exemption application. E-file 2012 Each subordinate must have its own EIN, even if it has no employees. E-file 2012 When submitting its group exemption application, the central organization must provide an EIN for each subordinate organization. E-file 2012 Information required for subordinate organizations. E-file 2012   In addition to the information required to obtain recognition of its own exemption, the central organization must submit information for those subordinates to be included in the group exemption letter. E-file 2012 The information should be forwarded in a letter signed by a principal officer of the central organization setting forth or including as attachments the following. E-file 2012 Information verifying that the subordinates: Are affiliated with the central organization at the close of its annual accounting period; Are subject to its general supervision or control; Are all eligible to qualify for exemption under the same paragraph of section 501(c), though not necessarily the paragraph under which the central organization itself is exempt; Are not private foundations if the application for a group exemption letter involves section 501(c)(3); Are all on the same accounting period as the central organization if they are to be included in group returns; and Are organizations that have been formed within the 15-month period preceding the date of submission of the group exemption application if they are claiming section 501(c)(3) status and are subject to the requirements of section 508(a) and wish to be recognized as exempt from their dates of creation (a group exemption letter may be issued covering subordinates, one or more of which have not been organized within the 15-month period preceding the date of submission, if all subordinates are willing to be recognized as exempt only from the date of application). E-file 2012 A detailed description of the purposes and activities of the subordinates, including the sources of receipts and the nature of expenditures. E-file 2012 A sample copy of a uniform governing instrument (such as a charter or articles of association) adopted by the subordinates, or, in its absence, copies of representative instruments. E-file 2012 An affirmation to the effect that, to the best of the officer's knowledge, the purposes and activities of the subordinates are as stated in (2) and (3), above. E-file 2012 A statement that each of the subordinates has provided a written authorization to the central organization, signed by an authorized officer of the subordinate, agreeing to be included in the group exemption (see also New 501(c)(3) organizations that want to be included , later in this section). E-file 2012 A list of subordinates to be included in the group exemption letter to which the IRS has issued an outstanding ruling or determination letter relating to exemption. E-file 2012 If the application for a group exemption letter involves section 501(c)(3) and is subject to the provisions of the Code requiring that it give timely notice that it is not a private foundation (see Private Foundations in chapter 3), an affirmation to the effect that, to the best of the officer's knowledge and belief, no subordinate to be included in the group exemption letter is a private foundation as defined in section 509(a). E-file 2012 For each subordinate that is a school claiming exemption under section 501(c)(3), the information required by Revenue Ruling 71-447, 1971-2 C. E-file 2012 B. E-file 2012 230 and Revenue Procedure 75-50, 1975-2 C. E-file 2012 B. E-file 2012 587 (these requirements are fully described in chapter 3, under Private Schools ; see also Schedule B, Form 1023). E-file 2012 For any school affiliated with a church, the information to show that the provisions of Revenue Ruling 75-231, 1975-1 C. E-file 2012 B. E-file 2012 158, have been met. E-file 2012 A list of the names, mailing addresses, actual addresses if different, and EINs of subordinates to be included in the group exemption letter. E-file 2012 A current directory of subordinates may be furnished instead of the list if it includes the required information and if the subordinates not to be included in the group exemption letter are identified. E-file 2012 New 501(c)(3) organizations that want to be included. E-file 2012   A new organization, described in section 501(c)(3), that wants to be included in a group exemption letter must submit its authorization (as explained in item number 5, earlier, under Information required for subordinate organizations ) to the central organization before the end of the 15th month after it was formed in order to satisfy the requirement of section 508(a). E-file 2012 The central organization must also include this subordinate in its next annual submission of information, as discussed later, under Information Required Annually . E-file 2012 Keeping the Group Exemption Letter in Force Continued effectiveness of a group exemption letter is based on the following conditions. E-file 2012 The continued existence of the central organization. E-file 2012 The continued qualification of the central organization for exemption under section 501(c). E-file 2012 The submission by the central organization of the information regarding its subordinate organizations that is required annually (described under Information Required Annually). E-file 2012 The annual filing of an information return (Form 990, for example) by the central organization if required. E-file 2012 The continued effectiveness of a group exemption letter as to a particular subordinate is based on these four conditions, as well as on the continued conformity by the subordinate to the requirements for inclusion in a group exemption letter, the authorization for inclusion, and the annual filing of any required information return for the subordinate. E-file 2012 Information Required Annually To maintain a group exemption letter, the central organization must submit annually, at least 90 days before the close of its annual accounting period, all of the following information. E-file 2012 Information about all changes in the purposes, character, or method of operation of the subordinates included in the group exemption letter. E-file 2012 A separate list (that includes the names, mailing addresses, actual addresses if different, and EINs of the affected subordinates) for each of the three following categories. E-file 2012 Subordinates that have changed their names or addresses during the year. E-file 2012 Subordinates no longer to be included in the group exemption letter because they no longer exist or have disaffiliated from or withdrawn their authorization to the central organization. E-file 2012 Subordinates to be added to the group exemption letter because they are newly organized or affiliated or because they have recently authorized the central organization to include them. E-file 2012 An annotated directory of subordinates will not be accepted for this purpose. E-file 2012 If there were none of the above changes, the central organization must submit a statement to that effect. E-file 2012 The same information about new subordinates that was required in the initial application for group exemption. E-file 2012 (This information is listed in items 1 through 10, under Information required for subordinate organizations. E-file 2012 , earlier. E-file 2012 ) If a new subordinate does not differ in any material respects from the subordinates included in the application for group exemption, however, a statement to this effect may be submitted in lieu of detailed information. E-file 2012 The organization should send this information to:   Ogden Service Center  Mail Stop 6271 Ogden, UT 84404-4749 Submitting the required information annually does not relieve the central organization or any of its subordinates of the duty to submit any other information that may be required by an EO area manager to determine whether the conditions for continued exemption are being met. E-file 2012 Events Causing Loss of Group Exemption A group exemption letter no longer has effect, for either a particular subordinate or the group as a whole, when: The central organization notifies the IRS that it is going out of existence, The central organization notifies the IRS, by its annual submission or otherwise, that any of its subordinates will no longer fulfill the conditions for continued effectiveness, explained earlier, or The IRS notifies the central organization or the affected subordinate that the group exemption letter will no longer have effect for some or all of the group because the conditions for continued effectiveness of a group exemption letter have not been fulfilled. E-file 2012 When notice is given under any of these three conditions, the IRS will no longer recognize the exempt status of the affected subordinates until they file separate applications on their own behalf or the central organization files complete supporting information for their reinclusion in the group exemption at the time of its annual submission. E-file 2012 However, when the notice is given by the IRS and the withdrawal of recognition is based on the failure of the organization to comply with the requirements for recognition of tax-exempt status under the particular subsection of section 501(c), the revocation will ordinarily take effect as of the date of that failure. E-file 2012 The notice, however, will be given only after the appeal procedures described earlier in this chapter are completed. E-file 2012 Prev  Up  Next   Home   More Online Publications