IRS Eliminates Advance Rulings Process


On September 8, 2008, the IRS issued new regulations that eliminate the public charity advance ruling process.  IR-2008-102, “IRS Streamlines Application Process for New Tax-Exempt Organizations,” stated in part:

  • The Internal Revenue Service and the Treasury Department today issued new regulations that do away with the so-called advance rulings that granted public charity status for an initial five-year period but required exempt organizations to demonstrate, after the initial period, that they in fact received a substantial part of their support from public sources to receive a final determination letter.

  • The IRS was able to eliminate the advance rulings process because of the recent redesign of the Form 990. “The revised Form 990 enhances transparency for exempt organizations and makes it easier for them to show that they are ‘publicly supported’ charities, rather than private foundations,” said IRS Commissioner Doug Shulman.

  • Organizations that have already received an advance ruling under the old regime, but are still in their first five years of existence, can use their advance ruling letter as their final determination letter.