SEC. 2. BACKGROUND

.01 Section 6033(a)(1) of the Code generally requires all tax-exempt organizations to file an annual information return on Form 990.

.02 Section 6033(a)(2)(A) of the Code provides certain mandatory exceptions to this filing requirement, specifically for churches, their integrated auxiliaries, and conventions or associations of churches.

.03 Section 6033(a)(2)(B) of the Code provides discretionary exceptions from filing such returns where the Secretary ‘‘determines such filing is not necessary to the efficient administration of the internal revenue laws.’’ Section 1.6033–2(g)(6) of the Income Tax Regulations delegates authority to the Commissioner to excuse organizations from the filing requirement. It provides that ‘‘the Commissioner may relieve any organization or class of organizations from filing, in whole or in part, the annual information return required by section 6033 where he determines that such returns are not necessary for the efficient administration of the internal revenue laws.’’

.04 Section 1.6033–2(g)(1) of the regulations provides a partial list of organizations that are not required to file annual returns either because they are excepted by statute or because the Commissioner has exercised the authority referred to above in Sec. 2.03. A more complete list is contained in Rev. Proc. 83–23, 1983–1 C.B. 687.

.05 A return filing exception for certain church-affiliated organizations engaged exclusively in managing funds or maintaining retirement programs was announced originally in Notice 84–2, 1984–1 C.B. 331. That exemption was carried over into Rev. Proc. 86–23, which superseded Notice 84–2. Rev. Proc. 86–23 also defined what is an integrated auxiliary of a church for purposes of the filing exception provided in section 6033(a)(2)(A). Treas. Reg. § 1.6033–2(h) now has incorporated the definition of integrated auxiliary of a church, making Rev. Proc. 86–23 partially obsolete. Accordingly, this revenue procedure replaces Rev. Proc. 86–23, preserving the filing

exemption that remains in effect for certain church-affiliated organizations that manage funds and retirement programs and deleting those portions of Rev. Proc. 86–23 that are now part of the regulations. Some organizations exempted from filing by this revenue procedure may also qualify as integrated auxiliaries exempt from filing under section 6033(a)(2)(A).