IRS Issues Final Regulations On Form 990

The IRS substantially redesigned the Form 990 in 2008 and issued temporary regulations relating to those changes on Sept. 9, 2008. The IRS has now issued final regulations effective as of Sept. 8, 2011. All tax-exempt organizations required to file Form 990 are affected by these regulations.

Public Support Test. Under the prior regulations, an organization in existence for less than eight months when it filed its exemption application had to request an advance ruling on its publicly-supported status. Only organizations that had completed one tax year of at least eight months were allowed to request a definitive ruling. The proposed regulations eliminated the advance ruling process and changed the period for computing the public support to five years instead of four years. If an organization did not meet the public support test for a taxable year, it would be at risk of being classified as a private foundation as of the first day of the succeeding taxable year if