With 2015 in full swing, tax-exempt organization practitioners
should be aware of recently enacted changes to the Internal Revenue
Service's (IRS) internal operating procedures. Earlier this
month, the IRS issued Revenue Procedure 2015-9,
setting forth the procedures the IRS will follow in issuing,
revoking, and modifying determination letters for tax-exempt
organizations during 2015. This update supersedes last year's
Revenue Procedure 2014-9 and contains two noteworthy
modifications.
First, the Revenue Procedure clarifies that EO Rulings and
Agreements will not issue letter rulings or technical advice. The
Office of Associate Chief Counsel will instead issue Private Letter
Rulings (PLRs) and Technical Advice Memoranda (TAMs). This confirms
prior reports generated by public pronouncements of IRS officials
and Announcement 2014-34. A
significant consequence of this change in IRS procedure is a
substantial increase in the cost of obtaining a PLR. In Revenue Procedure 2015-1, the
IRS recently announced that the user fees for obtaining a PLR will
be $28,300, effective February 2, 2015.
Second, the Revenue Procedure reflects the newly created 1023-EZ application. As of
July 1, 2014, smaller organizations are permitted to seek
recognition of exempt status under section 501(c)(3) using a less
burdensome, streamlined application. 1023-EZ filers must complete
an eligibility worksheet certifying, among other things, that the
organization's total assets are less than $250,000 and that
their actual gross receipts were under $50,000 for the last three
years and are projected to remain the same or decrease over the
next three years. The activities in the applications are described
with codes, and no corporate documents are submitted. Although the
application procedures for Forms 1023 and 1023-EZ are different and
set forth in two different Revenue Procedures, the IRS notes it may
merge the two Revenue Procedures, 2015-5 and 2015-9, in a later
update.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.