SECTION 11. EFFECT OF

DETERMINATION LETTER RECOGNIZING EXEMPTION

Effective date of exemption

.01 A determination letter recognizing exemption of an organization described in § 501(c), other than § 501(c)(29), is usually effective as of the date of formation of an organization if: (1) its purposes and activities prior to the date of the determination letter have been consistent with the requirements for exemption; (2) it has not failed to file required Form 990 series returns or notices for three consecutive years; and (3) it has filed an application for recognition of exemption within 27 months from the end of the month in which it was organized. Special rules may apply to an organization applying for exemption under § 501(c)(3), (9) or (17). See §§ 505 and 508, and Treas. Reg. §§ 1.508–1(a)(2), 1.508–1(b)(7) and 301.9100–2(a)(2)(iii) and (iv). In addition, special rules apply with respect to organizations described in § 501(c)(29). See Rev. Proc. 2012–11, 2012–7 IRB 368.

(1) If the Service requires the organization to alter its activities or make substantive amendments to its enabling instrument, the exemption will be effective as of the date specified in the determination letter.

(2) If the Service requires the organization to make a nonsubstantive amendment, exemption will ordinarily be recognized as of the date of formation. Examples of nonsubstantive amendments include correction of a clerical error in the enabling instrument or the addition of a dissolution clause where the activities of the organization prior to the determination letter are consistent with the requirements for exemption.

(3) An organization that otherwise meets the requirements for tax-exempt status and the issuance of a determination letter that does not meet the requirements for recognition from date of formation will generally be recognized from the postmark date of its application.

(4) For Form 1023–EZ applications, an eligible organization applying under this revenue procedure that does not submit Form 1023–EZ within 27 months from the end of the month in which it was organized will generally be recognized as exempt from the submission date of its Form 1023–EZ. For this purpose, the submission date of Form 1023–EZ is determined without regard to the submission date of any previously submitted application for recognition of tax-exemption (including a Form 1023–EZ, Form 1023, or Form 1024) that has been withdrawn by the organization or not accepted for processing by the Service. Thus, if an eligible organization that has a Form 1023 pending with the Service files a Form 1023–EZ in accordance with section 6.02(1) outside the 27-month window, it will generally be recognized as exempt from the submission date of its Form 1023–EZ, not from the date it submitted its Form 1023. An organization that believes it qualifies for an earlier effective date may request the earlier date by sending correspondence to the address listed in the Instructions for Form 1023–EZ . The correspondence should include the organization’s name, EIN, the effective date the organization is requesting, an explanation of why the earlier date is warranted, and any supporting documents. This correspondence should be sent after the organization receives its determination letter. Alternatively, the organization may complete Form 1023 instead of completing Form 1023–EZ.

(5) For Form 1023–EZ applications, an eligible organization, other than a private foundation, that normally has gross receipts of $50,000 or less is not required to file an annual return, but must furnish notice on Form 990–N providing the information required by § 6033(i). See Rev. Proc. 2011–15, 2011–3 I.R.B. 322. An eligible organization (other than a private foundation) that applies for recognition of exempt status under this revenue procedure is not required to separately notify the Service that it is excepted from the

Sec. 11.01 Bulletin No. 2016–1 197 January 4, 2016

annual filing requirement under § 6033(a) if it is claiming a filing exemption solely on the basis that its gross receipts are normally $50,000 or less. However, if such an organization claims an exception from filing an annual return under § 6033(a) on a basis other than it being an organization (other than a private foundation) that normally has gross receipts of $50,000 or less, it must file a Form 8940, Request for Miscellaneous Determination, with the Service and provide a statement of all of the facts on which its claim is based. A separate user fee will be required when filing the Form 8940. Alternatively, such an organization may file a Form 1023 application and submit information supporting its claimed exemption from filing annual returns as part of that exemption application.

Reliance on determination letter

.02 A determination letter recognizing tax-exemption may not be relied upon by the organization submitting the application if there is a material change, inconsistent with exemption, in the character, the purpose, or the method of operation of the organization, or a change in the applicable law. Also, a determination letter issued to an organization that submitted an application in accordance with this revenue procedure may not be relied upon by the organization submitting the application if it was based on any inaccurate material information submitted by the organization. See section 12.01.

(1) Inaccurate material information includes an incorrect representation or attestation as to the organization’s organizational documents, the organization’s exempt purpose, the organization’s conduct of prohibited and restricted activities, or the organization’s eligibility to file Form 1023–EZ.

(2) While the procedures for obtaining a determination letter by submitting a Form 1023 application may differ from those for obtaining a determination letter by submitting a Form 1023–EZ application, grantors and contributors may rely on both determination letters to the same extent. See Rev. Proc. 2011–33, 2011–25 I.R.B. 887.