IRS Issues Temporary Regulations Eliminating Advance Ruling Process And Making Other Changes To Implement The New Form 990

Article by Tax-Exempt Organizations Practice Group

On September 8, 2008, the Internal Revenue Service issued temporary regulations that eliminate the advance ruling period for new Section 501(c)(3) organizations, thus simplifying the approval process for new organizations seeking to be classified as publicly supported charities. The temporary regulations also make other important changes to implement the redesigned Form 990.

Elimination of Advance Ruling Process

Under the old regulations, a new Section 501(c)(3) organization that had not completed its first tax year had to go through a two-step process to be recognized as a publicly supported charity: 1) it had to declare that it expected to be publicly supported and request an "advance ruling" from the IRS regarding its public charity status, and 2) at the end of the five-year advance ruling period, it had to file Form 8734 (Support Schedule for Advance Ruling Period) to establish that it met the public