SECTION 12. APPLICABILITY — Internal Revenue Bulletin 2026-4

.01 New group exemption letters. This revenue procedure applies to group exemption letters applied for after January 20, 2026 . .02 Preexisting group exemption let- ters.

(1) In general. Except as otherwise provided in this section 12.02, this revenue procedure applies to:

(a) all central organizations with one or more preexisting group exemption letters;

(b) preexisting subordinate organizations; and

(2) Transition period for certain requirements applicable to preexisting group exemption letters and preexisting subordinate organizations.

(a) In general. Certain provisions of this revenue procedure do not apply to preexisting group exemption letters and preexisting subordinate organizations during the period that begins on the publication date and ends on January 22, 2027 (transition period). The sections of this revenue procedure described in this section 12.02(2) do not apply to preexisting group exemption letters and preexisting subordinate organizations during the transition period:

(i) Section 4.01(2) of this revenue procedure, providing that a central organization must have at least one subordinate organization to maintain a group exemption letter;

(ii) Section 4.01(3) of this revenue procedure, providing that a central organization can maintain only one group exemption letter;

(iii) Section 4.02 of this revenue procedure, describing the central organization’s relationship with its subordinate organizations, as it relates to the affiliation and general supervision or control requirements between a central organization and its preexisting subordinate organizations; and

(iv) Section 4.03(2)(a) of this revenue procedure, providing that all subordinate organizations initially included in a group application, or subsequently added to a

group exemption letter must be described in the same paragraph of § 501(c).

(b) Minimum number of subordinate organizations. Before the end of the transition period, a central organization that has a preexisting group exemption letter but does not have at least one subordinate organization must either:

(i) add at least one subordinate organization to its group exemption letter in accordance with section 7.02(2)(a)(iv) of this revenue procedure, or

(ii) terminate the group exemption letter in accordance with section 8.01(2) of this revenue procedure.

(c) More than one group exemption let- ter. Before the end of the transition period, a central organization that maintains more than one preexisting group exemption letter must terminate either all or all but one of its preexisting group exemption letters. The central organization must choose which, if any, preexisting group exemption letter it intends to maintain. The central organization must provide the IRS copies of all its preexisting group exemption letters and terminate the preexisting group exemption letters it does not intend to maintain in accordance with section 8.01(2) of this revenue procedure. (d) Central organization’s relationship with its subordinate organizations. Before the end of the transition period, a central organization must ensure that each preexisting subordinate organization is affiliated with and subject to its general supervision or control, within the meaning of section 4.02(2) and (3) or 4.02(4) of this revenue procedure. If a central organization is unable to ensure that a preexisting subordinate organization is affiliated with and subject to its general supervision or control, it must remove the subordinate organization from the group exemption letter in accordance with section 8.02(2) of this revenue procedure.

(e) Preexisting subordinate organiza- tions described in different paragraphs of § 501(c). Before the end of the transition period, a central organization that has a preexisting group exemption letter that includes preexisting subordinate organizations that are described in a paragraph of § 501(c) that is not the paragraph specified in the group application must remove the preexisting subordinate organizations that are not described in the paragraph of

§ 501(c) specified in the group application, in accordance with section 8.02(2) of this revenue procedure.

(f) Timing of actions. The actions required under this section 12.02(2) are accomplished through SGRI submissions and must be completed before the transition period ends on January 22, 2027.

(3) Certain requirements not applica- ble to preexisting subordinate organiza- tions. The sections of this revenue procedure described in this section 12.02(3) do not apply to preexisting subordinate organizations:

(a) Section 4.03(2)(b) of this revenue procedure, regarding the requirement that subordinate organizations sharing the same purpose have a uniform purpose statement;

(b) Section 4.04(3) of this revenue procedure, providing that a Type III supporting organization cannot be a subordinate organization;

(c) Section 4.04(4) of this revenue procedure, providing that a qualified nonprofit health insurance issuer described in § 501(c)(29) cannot be a subordinate organization; and

(d) Section 4.06(2) of this revenue procedure, regarding the requirement that the authorization for initial inclusion in a group application, or subsequent addition to a group exemption letter, described in section 4.06(1) of this revenue procedure acknowledge that the central organization may remove the subordinate organization from the group exemption letter with or without cause.

.03 Examples. The application of this section 12 is illustrated by the following examples.

(1) Example 1. Two preexisting group exemp- tion letters for subordinate organizations described in different paragraphs of § 501(c). Central organization B has two preexisting group exemption letters, one for subordinate organizations described in § 501(c)(3) and one for subordinate organizations described in § 501(c)(4). Under section 4.01(3) of this revenue procedure, a central organization may maintain only one preexisting group exemption letter. This requirement, however, does not apply until after the transition period (see section 12.02(2)(a)(ii) of this revenue procedure). Assuming B intends to maintain one of the two preexisting group exemption letters, before the end of the transition period B must identify the preexisting group exemption letter it intends to retain, provide copies of both group exemption letters to the IRS, and notify the IRS of the group exemption letter it will terminate. B (and not the IRS) is responsible for informing the sub

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ordinate organizations under the terminated group exemption letter that they may obtain recognition of exemption by taking an action described in section 9.05 of this revenue procedure (see section 9.02 of this revenue procedure, regarding the effect of termination).

(2) Example 2. One preexisting group exemption letter with no subordinate organizations. Central organization C has a single preexisting group exemption letter for subordinate organizations described in § 501(c)(3), but it currently does not have any subordinate organizations under the preexisting group exemption letter. Under section 4.01(2) of this revenue procedure, a central organization must have at least one subordinate organization to maintain a group exemption letter. This requirement, however, does not apply to preexisting group exemption letters until after the transition period (see section 12.02(2)(a)(i) of this revenue procedure). Before the end of the transition period, C must either add at least one subordinate organization described in § 501(c)(3) to the preexisting group exemption letter or notify the IRS that it will terminate the preexisting group exemption letter (see section 12.02(2)(b) of this revenue procedure). If C adds a subordinate organization to the preexisting group exemption letter, C must submit the SGRI described in section 7.02(3) of this revenue procedure before the end of the transition period. The subordinate organization that is added to the preexisting group exemption letter is not a preexisting subordinate organization. Accordingly, the requirements of section 4 of this revenue procedure (regarding the requirements to obtain and maintain a group exemption letter) apply, other than section 4.01 of this revenue procedure. In addition, because the subordinate organization that is added to the preexisting group exemption letter is not a preexisting subordinate organization, sections 12.02(2)(a)(iii) and (iv) and 12.02(3) of this revenue procedure do not apply.

(3) Example 3. One preexisting group exemption letter with subordinate organizations described in dif- ferent paragraphs of § 501(c). Central organization D has a preexisting group exemption letter with multiple subordinate organizations. The group application D filed pursuant to Rev. Proc. 80-27 stated that the subordinate organizations would be described in § 501(c) (3). In addition to subordinate organizations described in § 501(c)(3), some of the subordinate organizations under the preexisting group exemption letter are described in § 501(c)(4). Under section 4.03(2)(a) of this revenue procedure, all subordinate organizations must be described in the same paragraph of § 501(c). Before the end of the transition period, D must remove the subordinate organizations described in § 501(c) (4), in accordance with the removal provision in section 8.02(2) of this revenue procedure.

(4) Example 4. One preexisting group exemption letter with preexisting subordinate organizations described in the same paragraph of § 501(c). Central organization E has a preexisting group exemption letter for subordinate organizations described in § 501(c) (3). The preexisting group exemption letter has more than one preexisting subordinate organization. E is not required to make any changes to the group exemption letter during the transition period provided it has at least one subordinate organization, all the subordinate organizations are described in the same paragraph of § 501(c), and E’s relationship with its subordinate

organizations, as it relates to the affiliation and general supervision or control requirements, satisfies the requirements of section 4.02 of this revenue procedure. The preexisting subordinate organizations are subject to the requirements of this revenue procedure except as set forth in section 12.02(3) of this revenue procedure. If E adds a subordinate organization to the preexisting group exemption letter after the publication date, E must submit the SGRI described in section 7.02(3) of this revenue procedure. The subordinate organization that is added to the preexisting group exemption letter is not a preexisting subordinate organization. Accordingly, the requirements in section 4 of this revenue procedure (regarding the requirements to obtain and maintain a group exemption letter) apply to the subordinate organization that is added to the preexisting group exemption letter, other than section 4.01 of this revenue procedure. Furthermore, because the subordinate organization that is added to the preexisting group exemption letter is not a preexisting subordinate organization, sections 12.02(2)(a) (iii) and (iv) and 12.02(3) of this revenue procedure do not apply.

(5) Example 5. Removal of a preexisting subor- dinate organization from a preexisting group exemp- tion letter. Central organization F has a preexisting group exemption letter for subordinate organizations described in § 501(c)(3). There are multiple preexisting subordinate organizations under the preexisting group exemption letter. F removed one preexisting subordinate organization from the preexisting group exemption letter for failure to comply with one or more of the requirements of this revenue procedure. Under section 8.02(4) of this revenue procedure, the preexisting group exemption letter remains effective for all preexisting subordinate organizations that were not removed. Pursuant to section 9.05(2)(e) of this revenue procedure, the preexisting subordinate organization that was removed from the preexisting group exemption letter may obtain recognition of its exemption by being added back to the preexisting group exemption letter; however, if the preexisting subordinate organization was automatically revoked, it must be reinstated pursuant to Rev. Proc. 2014-11 first (see section 9.07 of this revenue procedure). If F adds the organization that was removed back to the preexisting group exemption letter, the organization that is added back to the preexisting group exemption letter is not a preexisting subordinate organization under the definition preexisting subordinate organization in section 3.10 of this revenue procedure. Accordingly, the requirements of section 4 of this revenue procedure (regarding the requirements to obtain and maintain a group exemption letter) apply to the organization that is added back to the preexisting group exemption letter, other than section 4.01 of this revenue procedure. Furthermore, because the organization that is added back to the preexisting group exemption letter is not a preexisting subordinate organization, sections 12.02(2)(a)(iii) and (iv) and 12.02(3) of this revenue procedure do not apply.