SECTION 10. EFFECTIVE DATE OF

EXEMPTION

.01 Initial inclusion. If all of the organizations initially included in a group exemption letter as subordinate organizations were organized within 27 months of the postmark date of the group exemption letter request, then the effective date of exemption for each organization initially included in a group exemption letter as a subordinate organization will be the organization’s date of formation, or, in the

Bulletin No. 2020–21 855 May 18, 2020

case of an organization that has had its exemption automatically revoked and subsequently reinstated after filing an application for reinstatement, the date on which the organization’s exemption was reinstated, determined in accordance with Rev. Proc. 2014-11. If any organization was organized more than 27 months before the postmark date of the group exemption letter request, was not previously recognized by the IRS as being described in § 501(c), and was not included in another group exemption letter, the effective date of all the organizations initially included in the group exemption letter as subordinate organizations will be the postmark date of the group exemption letter request.

.02 Subsequent addition. The effective date of exemption of an organization that is subsequently added to a group exemption letter as a subordinate organization depends on its exempt status immediately prior to its addition. If, at such time, the organization was not recognized by the IRS as being described in § 501(c) and was not included in another group exemption letter, the effective date of exemption will be the postmark date of the information required under section 6 of this revenue procedure, regardless of the organization’s date of formation. If, at such time, the organization was recognized by the IRS as being described in § 501(c) or was included in another group exemption letter, the effective date of exemption will be the same as prior to its addition to the group exemption letter.

.03 Termination or removal. (1) In general. Except as provided in section 10.03(2) or section 10.03(3) of this revenue procedure, if a group exemption letter is terminated, either with respect to all subordinate organizations or with respect to a particular subordinate organization, an organization required to apply for recognition of exemption under § 505 or § 508 must file an application within 27 months of the date on which the IRS terminated the group exemption letter to receive an effective date that is the same as the date of termination of the group exemption letter. An organization that files an application more than 27 months after termination of the group exemption letter will be recognized from the postmark date of its application, provided that it otherwise meets the requirement for tax-ex

empt status. In this case, the organization will be taxable from the date the IRS terminated the group exemption letter until the postmark date of its application. An organization that is not required to file an application may declare its exempt status (without obtaining recognition from the IRS) by continuing to file annual information returns or notices (see section 9.04(3) of this revenue procedure).

(2) Automatic revocation. In the case of a subordinate organization that has had its exemption automatically revoked, the effective date of exemption for such organization will be the date on which the organization’s exemption was reinstated after being automatically revoked, determined in accordance with Rev. Proc. 2014-11, as applicable.

(3) Declaratory judgment action. In certain circumstances, a subordinate organization may be able to file a declaratory judgment action under § 7428, in which case, the effective date of exemption for such organization will be determined by the outcome of the proceeding.