Changes proposed for group ruling exemption letters

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May 2020

Overview

The IRS on May 1 released Notice 2020-36, setting forth a proposed revenue procedure providing guidance to tax-exempt organizations described in Section 501(c) seeking to obtain a ‘group ruling’ exemption letter. The proposed revenue procedure would update guidance on how subordinate organizations, under the general supervision or control of a central organization, may obtain a group ruling exemption letter. The proposed revenue procedure also would update steps that a central organization must follow to maintain a group ruling.

The takeaway

Organizations planning to submit a group exemption letter request should consider filing before June 17, 2020. Similarly, central organizations with an existing group exemption letter should evaluate the impact of the proposed revenue procedure for maintaining the letter and the impact of adding additional subordinate organizations in the future.

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Rob Friz

Health Services Tax Leader, PwC US

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