Wednesday, October 1, 2008

Advance Ruling Period Change in Process

On September 9, the IRS announced that they were simplifying the exempt organizations process. In the past, most organizations that wished to be recognized as being publicly supported, as opposed to being a private foundation, would receive an advance ruling period. They were given five years to prove that they were publicly supported. At the end of this time, a filing was required to show the public support.

The IRS has concluded that the information contained in the redesigned Form 990 is sufficient for this process, and that no separate filing at the end of the advance ruling period is necessary. Organizations that have already received an advance ruling may treat their letter as a final determination letter.

For organizations that have questions of whether they will be able to show their public support, this means that they need to pay close attention to the representations they are making on their Forms 990.

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