HIGHLIGHTS Bulletin No. 2020–21 OF THIS ISSUE May 18, 2020 These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

ADMINISTRATIVE obtained on a group basis for subordinate organizations af- filiated with and under the general supervision or control of a central organization. Rev. Proc. 2020-29, page 859. This procedure modifies Rev. Proc. 2020-1 temporarily to allow for the electronic submission of requests for letter INCOME TAX rulings, closing agreements, determination letters, and information letters issued by the Associate Chief Counsel Notice 2020-32, page 837. (Corporate), Associate Chief Counsel (Financial Institutions This notice provides guidance regarding the nonde- and Products), Associate Chief Counsel (Income Tax and ductibility of costs that are the subject of loan for- Accounting), Associate Chief Counsel (International), Asso- giveness under section 1106 of the Coronavirus Aid, ciate Chief Counsel (Passthroughs and Special Industries), Associate Chief Counsel (Procedure and Administration), Relief, and Economic Security Act (CARES Act), Public and Associate Chief Counsel (Employee Benefits, Exempt Law 116-136, 134 Stat. 281 (March 27, 2020). Organizations, and Employment Taxes). This procedure also contains revised procedures for determination letters Notice 2020-34, page 838. issued by the IRS Large Business and International Division. This notice provides the applicable reference price for qual- ified natural gas production from qualified marginal wells during taxable years beginning in calendar year 2019 for EXEMPT ORGANIZATIONS the purpose of determining the marginal well production credit under §45I. The applicable reference price for taxable Notice 2020-36, page 840. years beginning in calendar year 2019 is $2.55 per 1,000 This notice contains a proposed revenue procedure that cubic feet. The notice also provides the credit amount used sets forth updated procedures under which recognition of for the purpose of determining the marginal well production exemption from federal income tax for organizations de- credit. The credit amount for taxable years beginning in cal- scribed in § 501(c) of the Internal Revenue Code may be endar year 2019 is $0.08 per 1,000 cubic feet.

Finding Lists begin on page ii. The IRS Mission

Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and en- force the law with integrity and fairness to all. Introduction

The Internal Revenue Bulletin is the authoritative instrument against reaching the same conclusions in other cases unless of the Commissioner of Internal Revenue for announcing of- the facts and circumstances are substantially the same. ficial rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of The Bulletin is divided into four parts as follows: general interest. It is published weekly. Part I.—1986 Code. It is the policy of the Service to publish in the Bulletin all sub- This part includes rulings and decisions based on provisions stantive rulings necessary to promote a uniform application of the Internal Revenue Code of 1986. of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless other- Part II.—Treaties and Tax Legislation. wise indicated. Procedures relating solely to matters of inter- This part is divided into two subparts as follows: Subpart A, nal management are not published; however, statements of Tax Conventions and Other Related Items, and Subpart B, internal practices and procedures that affect the rights and Legislation and Related Committee Reports. duties of taxpayers are published.

Part III.—Administrative, Procedural, and Miscellaneous. Revenue rulings represent the conclusions of the Service To the extent practicable, pertinent cross references to these on the application of the law to the pivotal facts stated in subjects are contained in the other Parts and Subparts. Also the revenue ruling. In those based on positions taken in rul- included in this part are Bank Secrecy Act Administrative ings to taxpayers or technical advice to Service field offices, Rulings. Bank Secrecy Act Administrative Rulings are issued identifying details and information of a confidential nature are by the Department of the Treasury’s Office of the Assistant deleted to prevent unwarranted invasions of privacy and to Secretary (Enforcement). comply with statutory requirements.

Part IV.—Items of General Interest. Rulings and procedures reported in the Bulletin do not have the This part includes notices of proposed rulemakings, disbar- force and effect of Treasury Department Regulations, but they ment and suspension lists, and announcements. may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and The last Bulletin for each month includes a cumulative index procedures, the effect of subsequent legislation, regulations, for the matters published during the preceding months. These court decisions, rulings, and procedures must be considered, monthly indexes are cumulated on a semiannual basis, and are and Service personnel and others concerned are cautioned published in the last Bulletin of each semiannual period.

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May 18, 2020 Bulletin No. 2020–21 Part III Notice 2020-32 the 8-week “covered period” beginning on II. Deductibility of Eligible Section 1106 the covered loan’s origination date (each, Expenses an eligible section 1106 expense): (1) pay- PURPOSE roll costs, (2) any payment of interest on Neither section 1106(i) of the CARES any covered mortgage obligation, (3) any Act nor any other provision of the CARES This notice provides guidance regard- payment on any covered rent obligation, Act addresses whether deductions other- ing the deductibility for Federal income and (4) any covered utility payment. See wise allowable under the Code for pay- tax purposes of certain otherwise deduct- section 1106(a) (defining the terms “cov- ments of eligible section 1106 expenses ible expenses incurred in a taxpayer’s ered period”, “covered mortgage obliga- by a recipient of a covered loan are al- trade or business when the taxpayer re- tion,” “covered rent obligation,” “covered lowed if the covered loan is subsequent- ceives a loan (covered loan) pursuant to utility payment,” and “payroll costs”), (b) ly forgiven under section 1106(b) of the the Paycheck Protection Program under (regarding eligibility for covered loan for- CARES Act as a result of the payment of section 7(a)(36) of the Small Business giveness), and (g) (regarding covered loan those expenses. This Notice addresses the Act (15 U.S.C. 636(a)(36)). Specifically, forgiveness decisions). However, section effect of covered loan forgiveness on the this notice clarifies that no deduction is 1106(d) of the CARES Act provides that deductibility of payments of eligible sec- allowed under the Internal Revenue Code the amount of the covered loan forgive- tion 1106 expenses. (Code) for an expense that is otherwise ness is reduced if, during the covered pe- deductible if the payment of the expense riod, (1) the average number of full-time III. Summary of Relevant Law results in forgiveness of a covered loan equivalent employees of the recipient is pursuant to section 1106(b) of the Corona- reduced as compared to the number of Section 161 of the Code provides that, virus Aid, Relief, and Economic Security full-time employees in a specified base in computing taxable income under sec- Act (CARES Act), Public Law 116-136, period, or (2) the salary or wages of cer- tion 63 of the Code, there shall be allowed 134 Stat. 281, 286-93 (March 27, 2020) tain employees is reduced by more than 25 as deductions the items specified in part and the income associated with the for- percent as compared to the last full quar- VI, subchapter B, chapter 1 of the Code giveness is excluded from gross income ter before the covered period. In addition, (for example, sections 162 and 163). How- for purposes of the Code pursuant to sec- pursuant to an interim final rule issued by ever, section 161 of the Code provides tion 1106(i) of the CARES Act. the Small Business Administration, no that the allowance of these deductions is more than 25 percent of the amount for- subject to the exceptions provided in part BACKGROUND given can be attributable to non-payroll IX, subchapter B, chapter 1 of the Code. costs. See Q&A 2.o. in Part III of the in- These exceptions include section 265 of I. Paycheck Protection Program terim final rule, Business Loan Program the Code. See also section 261. Temporary Changes; Paycheck Protection In general, section 162 of the Code The Paycheck Protection Program was Program, Docket No. SBA-2020-0015, 85 provides for a deduction for all ordinary established by section 1102 of the CARES Fed. Reg. 20811, 20813-20814 (April 15, and necessary expenses paid or incurred Act. Under the Paycheck Protection Pro- 2020). during the taxable year in carrying on any gram, a recipient of a covered loan may Section 1106(i) of the CARES Act ad- trade or business. Covered rent obliga- use the proceeds to pay (1) payroll costs, dresses certain Federal income tax con- tions, covered utility payments, and pay- (2) certain employee benefits relating to sequences resulting from covered loan roll costs consisting of wages and benefits healthcare, (3) interest on mortgage obli- forgiveness. Specifically, that subsection paid to employees comprise typical trade gations, (4) rent, (5) utilities, and (6) inter- provides that, for purposes of the Code, or business expenses for which a deduc- est on any other existing debt obligations. any amount that (but for that subsection) tion under section 162 of the Code gen- See section 7(a)(36)(F) of the Small Busi- would be includible in gross income of erally is appropriate. Section 163(a) of ness Act (describing allowable uses of a the recipient by reason of forgiveness the Code provides a deduction for certain covered loan). See also Q&A 2.r. in Part described in section 1106(b) “shall be ex- interest paid or accrued during the taxable III of the interim final rule, Business Loan cluded from gross income.” Thus, section year on indebtedness, including interest Program Temporary Changes; Paycheck 1106(i) of the CARES Act operates to ex- paid or incurred on a mortgage obligation Protection Program, Docket No. SBA- clude from the gross income of a recipi- of a trade or business. 2020-0015, 85 Fed. Reg. 20811, 20814 ent any category of income that may arise However, section 265(a)(1) of the Code (April 15, 2020). from covered loan forgiveness, regardless and §1.265-1 of the Income Tax Regula- Under section 1106(b) of the Cares of whether such income would be (1) tions provide that no deduction is allowed Act, a recipient of a covered loan can properly characterized as income from the to a taxpayer for any amount otherwise receive forgiveness of indebtedness on discharge of indebtedness under section allowable as a deduction to such taxpay- the loan (covered loan forgiveness) in 61(a)(11) of the Code, or (2) otherwise in- er that is allocable to one or more classes an amount equal to the sum of payments cludible in gross income under section 61 of income other than interest (whether or made for the following expenses during of the Code. not any amount of income of that class or

Bulletin No. 2020–21 837 May 18, 2020 classes is received or accrued) wholly ex- The taxpayer did, however, deduct the the extent of the income excluded under empt from the taxes imposed by subtitle A entire cost of the flight training course, section 1106(i) of the CARES Act. of the Code. See generally section 265(a) including the portion that had been reim- The deductibility of payments of eli- (1); §1.265-1. The term “class of exempt bursed by the Veterans’ Administration. In gible section 1106 expenses that result in income” means any class of income a reviewed opinion, the court held that the loan forgiveness under section 1106(b) (whether or not any amount of income of reimbursed flight-training expenses were of the CARES Act is also subject to dis- such class is received or accrued) that is nondeductible under section 265(a)(1) of allowance under case law and published either wholly excluded from gross income the Code. rulings that deny deductions for otherwise under any provision of subtitle A of the deductible payments for which the tax- Code or wholly exempt from the taxes im- NON-DEDUCTIBILITY OF payer receives reimbursement. See, e.g., posed by subtitle A of the Code under the PAYMENTS TO THE EXTENT Burnett v. Commissioner, 356 F.2d 755, provisions of any other law. See §1.265- INCOME RESULTING FROM LOAN 759-60 (5th Cir. 1966); Wolfers v. Com- 1(b)(1). The purpose of section 265 of the FORGIVENESS IS EXCLUDED missioner, 69 T.C. 975 (1978); Charles Code is to prevent a double tax benefit. UNDER SECTION 1106(i) OF THE Baloian Co. v. Commissioner, 68 T.C. 620 Section 265(a)(1) of the Code ap- CARES ACT (1977); Rev. Rul. 80-348, 1980-2 C.B. 31; plies to otherwise deductible expenses Rev. Rul. 80-173, 1980-2 C.B. 60. incurred for the purpose of earning or To the extent that section 1106(i) of otherwise producing tax-exempt income. the CARES Act operates to exclude from CONTACT INFORMATION It also applies where tax exempt income gross income the amount of a covered is earmarked for a specific purpose and loan forgiven under section 1106(b) of The principal authors of this notice are deductions are incurred in carrying out the CARES Act, the application of section Sarah Daya and Patrick Clinton of the Of- that purpose. In such event, it is proper 1106(i) results in a “class of exempt in- fice of Associate Chief Counsel (Income to conclude that some or all of the de- come” under §1.265-1(b)(1) of the Regu- Tax & Accounting). For further informa- ductions are allocable to the tax-exempt lations. Accordingly, section 265(a)(1) of tion regarding the application of sections income. See Christian v. United States, the Code disallows any otherwise allow- 161, 162, 163, and 261 please contact Ms. 201 F. Supp. 155 (E.D. La. 1962) (school able deduction under any provision of the Daya at (202) 317-4891 (not a toll-free teacher was denied deductions for expens- Code, including sections 162 and 163, for call); for further information regarding the es incurred for a literary research trip to the amount of any payment of an eligible application of section 265, please contact England because the expenses were allo- section 1106 expense to the extent of the Mr. Clinton at (202) 317-7005 (not a toll- cable to a tax-exempt gift and fellowship resulting covered loan forgiveness (up to free number). grant); Banks v. Commissioner, 17 T.C. the aggregate amount forgiven) because 1386 (1952) (certain educational expenses such payment is allocable to tax-exempt paid by the Veterans’ Administration that income. Consistent with the purpose of were exempt from income tax, were not section 265, this treatment prevents a dou- Reference Price for Section deductible); Heffelfinger v. Commission- ble tax benefit. 45I Credit for Production of er, 5 T.C. 985 (1945), (Canadian income This conclusion is consistent with pri- Natural Gas from Marginal taxes on income exempt from U.S. tax are or guidance of the IRS that addresses the not deductible in computing U.S. taxable application of section 265(a) to otherwise Wells During Taxable Years income); and Rev. Rul. 74-140, 1974-1 deductible payments. In particular, Rev. Beginning in Calendar Year C.B. 50, (the portion of a state income Rul. 83-3, 1983-1 C.B. 72, provides that, 2019 tax paid by a taxpayer that is allocable to where tax exempt income is earmarked for the cost-of-living allowance, a class of in- a specific purpose, and deductions are in- come wholly exempt under section 912, is curred in carrying out that purpose, section Notice 2020-34 nondeductible under section 265). 265(a) applies because such deductions In Manocchio v. Commissioner, 78 are allocable to the tax-exempt income. SECTION 1. PURPOSE T.C. 989 (1982), a taxpayer attended a In accordance with the analysis set forth flight-training course that maintained and in Rev. Rul. 83-3, the direct link between This notice provides the applicable improved skills required in the taxpay- (1) the amount of tax exempt covered loan reference price for qualified natural gas er’s trade or business. As a veteran, the forgiveness that a recipient receives pursu- production from qualified marginal wells taxpayer was entitled to an educational ant to section 1106 of the CARES Act, and during taxable years beginning in cal- assistance allowance from the Veterans’ (2) an equivalent amount of the otherwise endar year 2019 for the purpose of de- Administration pursuant to 38 U.S.C. sec- deductible payments made by a recipient termining the marginal well production tion 1677 (1976) equal to 90 percent of for eligible section 1106 expenses, con- credit (MWC) under §45I of the Internal the costs incurred. Because the payments stitutes a sufficient connection for section Revenue Code. The applicable reference received were exempt from taxation un- 265(a) to apply to disallow deductions for price for taxable years beginning in cal- der 38 U.S.C. section 310(a) (1976), the such payments under any provision of the endar year 2019 is $2.55 per 1,000 cubic taxpayer did not report them as income. Code, including sections 162 and 163, to feet (Mcf).

May 18, 2020 838 Bulletin No. 2020–21 This notice also provides the credit number of wells on which a taxpayer may Section 45I(b)(2)(B) provides that in amount used for the purpose of determin- claim the MWC is not limited. the case of any taxable year beginning in a ing the MWC for taxable years beginning Section 45I(d)(2) provides that to calendar year after 2005, each of the dol- in calendar year 2019. The credit amount claim the credit a taxpayer must hold an lar amounts contained in § 45I(b)(2)(A) is determined using the 2019 inflation ad- operating interest in the qualified margin- will be increased to an amount equal to justment factor of 1.3015 and the applica- al well producing the natural gas to which such dollar amount multiplied by the in- ble reference price of $2.55 per Mcf. The the credit relates. Under § 45I(d)(1) if a flation adjustment factor for such calendar credit amount for taxable years beginning well is owned by more than one owner year (determined under § 43(b)(3)(B) by in calendar year 2019 is $0.08 per Mcf. and the natural gas production exceeds the substituting “2004” for “1990”). limitation under § 45I(c)(2), the qualify- SECTION 2. BACKGROUND ing natural gas production attributable to SECTION 3. INFLATION the taxpayer is determined on the basis of ADJUSTMENT FACTOR AND Section 45I(a), as it relates to quali- the ratio which taxpayer’s revenue interest REFERENCE PRICE fied natural gas production, provides that, in the production bears to the aggregate of for purposes of § 38, the MWC for any the revenue interests of all operating in- .1 Inflation Adjustment. The inflation taxable year is an amount equal to the terest owners in the production. Finally, adjustment factor under § 45I(b)(2)(B) for product of (1) the credit amount and (2) § 45I(d)(3) provides that the MWC is not calendar year 2019 is 1.3015. the qualified natural gas production that is allowable if the taxpayer is also eligible to .2 Reference Price. The Secretary’s attributable to the taxpayer. claim the § 45K nonconventional sources estimate of the calendar year 2018 an- Section 45I(c)(1) provides that “qual- credit for the taxable year, unless the tax- nual average wellhead price per Mcf for ified natural gas production” means- do payer elects not to claim the credit under § all domestic natural gas under § 45I(b) mestic natural gas produced from a qual- 45K for the well. (2)(C)(ii) was calculated by applying ified marginal well. Section 45I(c)(3)(A) For purposes of § 45I(a)(1), the credit the Producer Price Index commodity in- provides that a qualified marginal well is amount is 50 cents (adjusted for inflation) dex for “Natural Gas from the Wellhead” a domestic well (i) the production from per Mcf of qualified natural gas produc- (WPU053101051)1 published by the Bu- which during the taxable year is treated as tion (tentative credit amount). See § 45I(b) reau of Labor Statistics (BLS) as part of its marginal production under § 613A(c)(6), (1)(B) and (b)(2)(B). Producer Price Index program, to the 2017 or (ii) which, during the taxable year (I) Section 45I(b)(2)(A) and (B) provide annual average wellhead price ($2.68) has average production of not more than that the tentative credit amount (adjusted published in Notice 2019-37, 2019-37 25 barrel-of-oil equivalents per day, and for inflation) is reduced (but not below I.R.B. 629. The annual Producer Price (II) produces water at a rate not less than zero) to the extent that the applicable Index commodity index for natural gas 95 percent of total well effluent. reference price exceeds $1.67 (adjusted published by the BLS was 83.4 in 2017 Section 613A(c)(6)(D) and (E) provide for inflation). More specifically, § 45I(b) and 79.3 in 2018, which implies a ratio of that “marginal production” means domes- (2)(A) provides that the tentative credit 2018 to 2017 average wellhead prices of tic natural gas produced during any tax- amount (adjusted for inflation) is reduced 0.951 (79.3 / 83.4). Therefore, the Secre- able year from a property which is a strip- by an amount which bears the same ratio tary’s estimate of the calendar year 2018 per well property for the calendar year in to the tentative credit amount (adjusted annual average wellhead price per Mcf for which the taxable year begins. A “stripper for inflation) as the excess (if any) of the all domestic natural gas is $2.55 per Mcf well property” is, with respect to any cal- applicable reference price over $1.67 (ad- (0.951 x $2.68 per Mcf). endar year, any property producing not justed for inflation), bears to $0.33 (ad- For years after 2018, the Secretary in- more than 15 barrel equivalents per day, justed for inflation). As a result, the MWC tends to continue calculating the reference determined by dividing the average daily is not available if the applicable reference price by application of the Producer Price production of domestic crude oil and do- price for qualified natural gas production Index commodity index for “Natural Gas mestic natural gas from producing wells is $2.00 (adjusted for inflation) or more. from the Wellhead” (WPU053101051) on the property for such calendar year by Section 45I(b)(2)(A) also provides that published by the BLS to the previous the number of such wells. the applicable reference price for a taxable year’s reference price. Section 45I(c)(2)(A) provides that year is the reference price for the calendar generally only the first 1,095 barrels or year preceding the calendar year in which SECTION 4. CALCULATION OF barrel-of-oil equivalents (as defined in § the taxable year begins. Section 45I(b)(2) CREDIT AMOUNT 45K(d)(5)) produced during the taxable (C)(ii) provides that the term “reference year qualify for the MWC. This limitation price” means, with respect to any calendar Under § 45I(b)(1)(B) and (2)(B), the is proportionately reduced in the case of a year, in the case of qualified natural gas tentative credit amount used to calculate short taxable year or in the case of a well production, the Secretary’s estimate of the the MWC for taxable years beginning in that is not capable of production each day annual average wellhead price per Mcf for calendar year 2019 is 65 cents per Mcf of a taxable year. See § 45I(c)(2)(B). The all domestic natural gas. ($0.50 x 1.3015 inflation adjustment fac-

1 https://data.bls.gov/cgi-bin/srgate. The BLS publishes indexes and not actual or average prices.

Bulletin No. 2020–21 839 May 18, 2020 tor). To determine the credit amount for beginning in calendar year 2019 is re- ($1.67 x 1.3015 inflation adjustment fac- purposes of § 45I(a)(1), the tentative cred- duced (but not below zero) by an amount tor), bears to (ii) $0.43 ($0.33 x 1.3015 it amount must be reduced as provided by (§ 45I(b)(2) Reduction Amount) which inflation adjustment factor). According- § 45I(b)(2)(A). bears the same ratio to the tentative cred- ly, the § 45I(b)(2) Reduction Amount Pursuant to § 45I(b)(2)(A), the ten- it amount as (i) the excess (if any) of the (as adjusted for inflation) is computed as tative credit amount for taxable years applicable reference price over $2.17 follows:

§ 45I(b)(2) Red. Amount App. Ref. Price – 2.17 = 0.65 0.43

Solving for the § 45I(b)(2) Red. Amount yields the following formula:

0.65 x (App. Ref. Price – 2.17) § 45I(b)(2) Red. Amount = 0.43

Using the applicable reference price of obtained on a group basis for subordinate For example, Rev. Proc. 80-27 requires a $2.55, the § 45I(b)(2) Reduction Amount organizations affiliated with and under the central organization to submit certain in- is $0.57. Therefore, the credit amount general supervision or control of a cen- formation regarding its subordinate orga- used to calculate the MWC for taxable tral organization. The proposed revenue nizations to the IRS annually in advance years beginning in calendar year 2019 is procedure also sets forth updated proce- of the close of its accounting period. To $0.08 per mcf ($0.65 - $0.57). dures a central organization must follow facilitate the provision of information un- to maintain a group exemption letter. der this requirement, the IRS historically SECTION 5. EFFECTIVE DATE The proposed revenue procedure would mailed each central organization a list of modify and supersede Rev. Proc. 80-27, its subordinate organizations for verifica- This notice is effective for qualified 1980-1 C.B. 677 (as modified by Rev. tion and return. As of January 1, 2019, the natural gas production during taxable Proc. 96-40, 1996-2 C.B. 301). The Inter- IRS stopped providing these lists to cen- years beginning in calendar year 2019. nal Revenue Service (IRS) is issuing this tral organizations because the provision of guidance in proposed form to provide an such lists was not required and imposed SECTION 6. DRAFTING AND opportunity for public comment because a significant administrative burden on the CONTACT INFORMATION the IRS recognizes that, if finalized, the IRS. proposed revenue procedure would make Many of the IRS’s goals for the pro- The principal author of this notice is substantial changes to the procedures set gram are attainable only by updating the Charles Hyde of the Office of Associate forth in Rev. Proc. 80-27 and that the ap- procedures currently described in Rev. Chief Counsel (Passthroughs & Special plication of these new procedures may Proc. 80-27. Accordingly, this notice con- Industries). For further information re- impose an additional administrative bur- tains a proposed revenue procedure that garding this notice contact Mr. Hyde at den on central organizations with group would make such changes if it is finalized. (202) 317-6853 (not a toll-free number). exemption letters in existence on the date This notice discusses the changes the pro- the final revenue procedure is published in posed revenue procedure would make to the Internal Revenue Bulletin (preexisting Rev. Proc. 80-27 and explains the reasons group exemption letters). for the proposed changes and how the pro- Notice Proposing Revenue posed changes would affect preexisting Procedure Updating Group BACKGROUND group exemption letters. Exemption Letter Program The IRS oversees more than 4,000 SUMMARY AND EXPLANATION OF group exemption letters that include more CHANGES Notice 2020-36 than 440,000 subordinate organizations. The IRS has considered how to reduce In general PURPOSE the administrative burden and increase the efficiency of the group exemption letter The proposed revenue procedure is This notice contains a proposed rev- program, to improve the integrity of data intended to be a comprehensive resource enue procedure that sets forth updated collected for purposes of program over- regarding group exemption letters. Ac- procedures under which recognition of sight, to increase the transparency of the cordingly, information located in other exemption from federal income tax for program, and to increase compliance by guidance, such as in the Treasury Regu- organizations described in § 501(c) of the central organizations and subordinate or- lations or other revenue procedures, has Internal Revenue Code (Code) may be ganizations with program requirements. been incorporated into the proposed rev-

May 18, 2020 840 Bulletin No. 2020–21 enue procedure, including, but not limited ordinate organizations. Section 6033(j) Q (129 Stat. 2242 (2015)) (PATH Act). to, information with respect to the filing automatically revokes an organization’s Section 5.03(3)(c) of the proposed reve- of group returns (as described in section exemption if the organization fails to file nue procedure explains that a subordinate 7 of the proposed revenue procedure) and a required annual return or notice (as de- organization described in § 501(c)(4) that donor or contributor reliance on group ex- fined in section 2.05 of the proposed rev- is included in (or subsequently added to) emption letters (as described in section 12 enue procedure with reference to § 6033) a group exemption letter must follow the of the proposed revenue procedure). for three consecutive years. See Pension procedures described in Rev. Proc. 2016- The proposed revenue procedure uses Protection Act of 2006, Public Law 109- 41, 2016-30 I.R.B. 165, and submit a formatting similar to Rev. Proc. 2020-5, 280 (120 Stat. 780 (2006)). The proposed completed electronic Form 8976, “Notice 2020-1 I.R.B. 241 (updated annually) and revenue procedure explains that a subordi- of Intent to Operate Under Section 501(c) includes much of the same information but nate organization that has had its exemp- (4).” This section explains that a sub- specifically tailored to apply to group ex- tion automatically revoked (within the ordinate organization may authorize an emption letters. For example, the proposed meaning of section 2.06 of the proposed individual representing the central orga- revenue procedure states when the IRS will revenue procedure) and has not yet had nization to submit Form 8976 on the sub- issue a group exemption letter (see section its exemption reinstated after filing an ordinate organization’s behalf and to re- 4 of the proposed revenue procedure) and application for reinstatement (within the ceive any communications relating to the under what circumstances the IRS may meaning of section 2.07 of the proposed subordinate organization’s submission. terminate a group exemption letter (see revenue procedure) is not eligible for ini- section 8 of the proposed revenue proce- tial inclusion in or subsequent addition Proposed modifications to Rev. dure). The proposed revenue procedure to a group exemption letter (see section Proc. 80-27 describes how a subordinate organization 3.04(5) of the proposed revenue proce- may obtain recognition of exemption or dure). A subordinate organization will be The proposed revenue procedure would declare its exempt status (without obtain- removed from a group exemption letter make additional modifications to the pro- ing recognition from the IRS), as applica- if its exemption is automatically revoked cedures currently described in Rev. Proc. ble, if the IRS does not accept a request (see section 8.02(1)(c) of the proposed 80-27. In general, the changes are intend- for a group exemption letter or declines revenue procedure). When submitting the ed: to increase efficiency, transparency, to issue a group exemption letter or if the information required annually to maintain and compliance with the group exemption IRS or the central organization terminates a group exemption letter (supplemental letter program; to improve the central or- the group exemption letter (in its entirety group ruling information, or SGRI, dis- ganization’s ability to exercise general or only with respect to a particular subor- cussed in section 6 of the proposed rev- supervision or control over its subordinate dinate organization) (see section 9.04 of enue procedure), the central organization organizations; and to reduce the adminis- the proposed revenue procedure). The pro- must notify the IRS of any subordinate trative burden on the IRS. A transition rule posed revenue procedure explains how the organizations that are no longer includ- and a grandfather rule (both discussed in effective date of exemption is determined ed in the group exemption letter because the “Applicability” section of this notice in each of these circumstances (see section such subordinate organizations have had and in section 14 of the proposed revenue 10 of the proposed revenue procedure). In their exemption automatically revoked procedure) address how these changes particular, the proposed revenue procedure (see section 6.02(2)(a)(ii) of the proposed would apply to preexisting group exemp- explains that, if a group exemption letter is revenue procedure). Under the proposed tion letters. terminated with respect to all subordinate revenue procedure, the IRS may termi- (1) Central organization requirements organizations, a subordinate organization nate a group exemption letter with respect to obtain and maintain a group exemption required to file an application for recogni- to all subordinate organizations if more letter. tion of exemption has 27 months from the than half of the subordinate organizations The proposed revenue procedure in- date of termination to obtain recognition of have had their exemption automatically cludes two requirements a central orga- its exemption to avoid interruption of its revoked (see section 8.01(1)(g) of the pro- nization must satisfy to obtain and main- exempt status (see section 10.03(1) of the posed revenue procedure). tain a group exemption letter in addition proposed revenue procedure). (2) Notification of intent to operate as to the requirement set forth in Rev. Proc. an organization described in § 501(c)(4). 80-27 that a central organization must be Statutory changes Section 5.03(3)(c) of the proposed rev- described in § 501(c) or must be an in- enue procedure explains the application strumentality or an agency of a political The proposed revenue procedure up- of § 506 to subordinate organizations. subdivision. First, Rev. Proc. 80-27 does dates the procedures currently described Section 506 requires an organization de- not require a central organization to have in Rev. Proc. 80-27 by incorporating scribed in § 501(c)(4) to notify the Secre- a specific number of subordinate organi- changes to the Code enacted since its pub- tary that it is operating as an organization zations to obtain or to maintain a group lication in January of 1980. described in § 501(c)(4) no later than 60 exemption letter. Both Rev. Proc. 80-27 (1) Automatic revocation. days after the organization is established. and section 2.02 of the proposed revenue The proposed revenue procedure clar- See Protecting Americans from Tax Hikes procedure define the term “central organi- ifies the application of § 6033(j) to sub- Act of 2015, Public Law 114-113, Div. zation” as an organization that has one or

Bulletin No. 2020–21 841 May 18, 2020 more subordinate organizations under its of the proposed revenue procedure and for subordinate organizations described general supervision or control. Howev- § 1.6033-2(d) of the Treasury Regulations in any paragraph of § 501(c) (provided er, the administrative burden of process- (relating to group returns). that the eligibility requirements of section ing one group exemption letter request is (3) Organizations eligible for initial 3.03 of the proposed revenue procedure comparable to the administrative burden inclusion in or subsequent addition to a are met), as long as all the subordinate of processing four applications (as defined group exemption letter as subordinate or- organizations are described in the same in section 2.04 of the proposed revenue ganizations. paragraph of § 501(c) (see section 3.03(2) procedure). Furthermore, more than 300 The proposed revenue procedure de- (a)(i) of the proposed revenue procedure). group exemption letters in existence when scribes four new requirements that a sub- For example, a state college or university the project was conducted included no ordinate organization must meet for initial may obtain and maintain a group exemp- subordinate organizations but consider- inclusion in or subsequent addition to a tion letter for organizations described in able resources are required to administer group exemption letter. § 501(c)(3), provided that the state college the program for these group exemption (a) Matching requirements. or university can establish that it is a qual- letters. Accordingly, section 3.01(2) of Rev. Proc. 80-27 provides that the ified governmental agency. the proposed revenue procedure requires central organization must establish that (b) Foundation classification require- a central organization to have at least all subordinate organizations included in ment. five subordinate organizations to obtain a group exemption letter request are de- The second new requirement for initial a group exemption letter and at least one scribed in the same paragraph of § 501(c), inclusion in or subsequent addition to a subordinate organization to maintain the though not necessarily the paragraph group exemption letter introduced by the group exemption letter thereafter. in which the central organization is de- proposed revenue procedure involves the Second, Rev. Proc. 80-27 does not lim- scribed. Thus, under Rev. Proc. 80-27, a foundation classification of subordinate it the number of group exemption letters a central organization described in § 501(c) organizations described in § 501(c)(3). central organization may maintain. How- (3) may have a group exemption letter Rev. Proc. 80-27 does not require subor- ever, maintaining more than one group for subordinate organizations described dinate organizations described in § 501(c) exemption letter may adversely affect the in § 501(c)(4). Section 3.03(2)(a)(i) of (3) to have any particular foundation clas- central organization’s ability to exercise the proposed revenue procedure retains sification under § 509(a) (other than the general supervision or control over its the requirement that all subordinate orga- prohibition of subordinate organizations subordinate organizations. Traditionally, nizations be described in the same para- that are private foundations). Tradition- IRS electronic databases have not sys- graph of § 501(c). However, permitting a ally, IRS electronic databases have not temically tracked more than one group central organization to have subordinate systemically tracked multiple foundation exemption letter for each central organi- organizations described in a paragraph of classifications in connection with -a par zation. Accordingly, section 3.01(3) of the § 501(c) that is different from the para- ticular group exemption letter. This lim- proposed revenue procedure provides that graph describing the central organization itation reduces transparency, complicates a central organization may maintain only limits the central organization’s ability compliance, and increases the adminis- one group exemption letter. to exercise general supervision or con- trative burden because different foun- (2) The central organization’s relation- trol over its subordinate organizations. dation classifications have different- re ship with its subordinate organizations. Accordingly, section 3.03(2)(a)(ii) of the quirements. Accordingly, section 3.03(2) Consistent with Rev. Proc. 80-27, sec- proposed revenue procedure requires all (b)(i) of the proposed revenue procedure tion 3.02(1) of the proposed revenue pro- subordinate organizations initially includ- provides that, if the subordinate organiza- cedure requires a central organization to ed in or subsequently added to a group ex- tions initially included in or subsequent- establish that each subordinate organiza- emption letter to be described in the same ly added to a group exemption letter are tion to be included in the group exemption paragraph of § 501(c) as the central orga- described in § 501(c)(3), all such subor- letter be affiliated with the central organi- nization. For example, if a central organi- dinate organizations must be classified as zation and subject to its general supervi- zation is described in § 501(c)(3), all the public charities under the same paragraph sion or control. Rev. Proc. 80-27, howev- subordinate organizations initially includ- of § 509(a). er, does not define the terms “affiliation,” ed in or subsequently added to the group Subordinate organizations described in “general supervision,” or “control.” This exemption letter must be described in § 501(c)(3) and classified under § 509(a) lack of definition has caused confusion § 501(c)(3). Nonetheless, section 3.03(2) (1) are not required to be classified under and created a lack of consistency for both (a)(iii) of the proposed revenue procedure the same paragraph of § 170(b)(1)(A). For the IRS and central organizations. Ac- explains that, if the central organization is example, subordinate organizations de- cordingly, these terms are described in either an instrumentality or an agency of a scribed in § 501(c)(3) that are classified greater detail in sections 3.02(2), 3.02(3), political subdivision and is not described under § 509(a)(1) as churches described and 3.02(4) of the proposed revenue pro- in § 501(c), the matching requirement in in § 170(b)(1)(A)(i), educational organi- cedure. Further, section 3.02(5) of the section 3.03(2)(a)(ii) of the proposed rev- zations described in § 170(b)(1)(A)(ii), or proposed revenue procedure provides that enue procedure does not apply. Accord- hospitals described in § 170(b)(1)(A)(iii) the descriptions of “general supervision” ingly, such a central organization may ob- may all be initially included in or subse- and “control” apply only for purposes tain and maintain a group exemption letter quently added to the same group exemp-

May 18, 2020 842 Bulletin No. 2020–21 tion letter, provided that the other require- this case, the proposed revenue procedure proposed revenue procedure requires the ments of the proposed revenue procedure directs a central organization requesting a central organization to submit a copy of are satisfied. Nonetheless, the IRS is con- group exemption letter to visit the Urban the uniform governing instrument with sidering how, and the extent to which, this Institute, National Center for Charitable its request for a group exemption letter. requirement may affect a central organiza- Statistics, website at nccs.urban.org for a Representative instruments are no longer tion’s ability to exercise general supervi- complete list of NTEE codes. acceptable for this purpose. sion or control over its subordinate organi- The IRS has chosen to use NTEE Section 3.03(2)(d) of the proposed zations and, after an appropriate transition codes, rather than a different coding sys- revenue procedure includes an exception period, eventually may require all sub- tem, such as the North American Industry for subordinate organizations described ordinate organizations classified under Classification System, because the NTEE in § 501(c)(3) because, under the foun- § 509(a)(1) to be classified under the same codes were created specifically to describe dation classification requirement, such paragraph of § 170(b)(1)(A). the activities engaged in by exempt orga- subordinate organizations may have dif- Public support is calculated annually nizations that further one or more exempt ferent religious, charitable, educational, and may change from year to year. See purposes. Indeed, the IRS already requires or other exempt purposes and because the §§ 170(b)(1)(A)(vi) & 509(a)(1) & (2). organizations applying for recognition un- similar purpose requirement does not ap- Thus, for purposes of the foundation clas- der § 501(c)(3) to enter the NTEE code ply to subordinate organizations described sification requirement described in the that best describes the organization’s ac- in § 501(c)(3). Accordingly, the proposed proposed revenue procedure, a subordi- tivities on Form 1023-EZ, “Streamlined revenue procedure allows the governing nate organization classified under § 509(a) Application for Recognition of Exemption instruments of subordinate organizations (1) and described in § 170(b)(1)(A)(vi) Under Section 501(c)(3) of the Internal described in § 501(c)(3) to describe dif- will be considered as having the same Revenue Code.” ferent purposes. The proposed revenue foundation classification as a subordinate Subordinate organizations described in procedure further explains that, if a group organization classified under § 509(a)(2), § 501(c)(3) initially included in or subse- exemption letter includes subordinate or- and vice versa. quently added to a group exemption letter ganizations described in § 501(c)(3) with Additionally, subordinate organiza- are not required to have the same primary different purposes, the governing instru- tions described in § 501(c)(3) are not purpose (and therefore are not required ment describing each purpose should be a required to be classified under the same to provide an NTEE code), because, al- uniform governing instrument. For exam- paragraph of § 509(a) as the central or- though such subordinate organizations ple, if a group exemption letter includes ganization. For example, subordinate or- must be classified in the same paragraph of subordinate organizations that are schools ganizations classified as hospitals under § 509(a), such subordinate organizations and hospitals, all the subordinate orga- §§ 509(a)(1) and 170(b)(1)(A)(iii) may may have different religious, charitable, nizations that are schools should adopt a be included in a group exemption letter educational, or other exempt purposes. uniform governing instrument describing maintained by a central organization that (d) Uniform governing instrument re- their educational purpose and all the sub- is a Type III supporting organization de- quirement. ordinate organizations that are hospitals scribed in § 509(a)(3). The fourth new requirement for initial should adopt a uniform governing instru- (c) Similar purpose requirement. inclusion in or subsequent addition to a ment describing their charitable purpose. The third new requirement for ini- group exemption letter introduced by the (4) Organizations not eligible for in- tial inclusion in or subsequent addition proposed revenue procedure is a modi- clusion in or subsequent addition to a to a group exemption letter adheres to fication to the requirement in Rev. Proc. group exemption letter as subordinate or- the original intent of the group exemp- 80-27 directing a central organization to ganizations. tion letter program by requiring certain include a sample copy the governing in- Rev. Proc. 80-27 states that a group ex- subordinate organizations included in a strument adopted by the subordinate or- emption letter may not include any sub- group exemption letter to have the same ganizations with its request for a group ordinate organization that is organized or similar purposes. This requirement will exemption letter. If a uniform governing and operated in a foreign country or that facilitate the central organization’s exer- instrument is not used, Rev. Proc. 80-27 is described in § 501(c)(3) and classified cise of general supervision or control and requires the central organization to sub- as a private foundation under § 509(a). reduce the administrative burden of the mit copies of representative instruments. The proposed revenue procedure gener- group exemption letter program. There- However, governing instruments that are ally retains these requirements, except it fore, section 3.03(2)(c) of the proposed not uniform are not consistent with the permits a subordinate organization to op- revenue procedure requires all subordi- similar purpose requirement. Accordingly, erate in a foreign country, provided that nate organizations described in § 501(c) section 3.03(2)(d) of the proposed revenue it is organized in the United States. More (other than § 501(c)(3)) initially included procedure eliminates the option of submit- specifically, section 3.04(1) of the- pro in or subsequently added to a group ex- ting copies of representative instruments posed revenue procedure provides that a emption letter to be described by the same in the absence of a uniform governing subordinate organization that is organized National Taxonomy of Exempt Entities instrument and requires all subordinate in a foreign country may not be initially (NTEE) Code (as defined in section 2.08 organizations to adopt a uniform govern- included in or subsequently added to a of the proposed revenue procedure). In ing instrument. Section 5.03(2)(a) of the group exemption letter. A subordinate or-

Bulletin No. 2020–21 843 May 18, 2020 ganization that is organized in the United reinstatement and has had its exemption churches may, but is not required to, sub- States is subject to federal tax law even if reinstated, provided that it meets the oth- mit the SGRI. it operates in a foreign country, and a cen- er requirements of the proposed revenue (7) Declaratory judgment provisions of tral organization therefore should be able procedure. § 7428. to exercise general supervision or control (5) Authorization for initial inclusion In 1976, Congress enacted § 7428 to over such a subordinate organization. In in or subsequent addition to a group ex- permit organizations described in § 501(c) addition, section 3.04(2) of the proposed emption letter. (3) to file a declaratory judgment action in revenue procedure states that an organiza- Rev. Proc. 80-27 requires a subordi- the case of an actual controversy involv- tion described in § 501(c)(3) that is classi- nate organization to authorize the central ing determinations made by the IRS. See fied as a private foundation under § 509(a) organization to include it in the request for Tax Reform Act of 1976, Public Law 94- is not eligible for initial inclusion in or a group exemption letter. Section 3.05(1) 455 (90 Stat. 1520 (1976)). The PATH Act subsequent addition to a group exemption of the proposed revenue procedure retains extended application of § 7428 to all orga- letter as a subordinate organization. this requirement, but section 3.05(2) of nizations described in § 501(c). The proposed revenue procedure also the proposed revenue procedure adds the Rev. Proc. 80-27 does not address the provides that other types of organiza- requirement that the authorization permit application of § 7428 to either central or- tions may not be initially included in or the central organization to remove the ganizations or subordinate organizations. subsequently added to a group exemption subordinate organization from the group Nevertheless, questions exist regarding letter as subordinate organizations. Sec- exemption letter if the subordinate orga- how the statute applies in the context of tions 3.04(3) and 3.04(4) of the proposed nization fails to comply with the require- group exemption letters. Accordingly, sec- revenue procedure state that neither an ments of the proposed revenue procedure. tion 11 of the proposed revenue procedure organization described in § 501(c)(3) that Consistent with Rev. Proc. 80-27, section explains when § 7428 applies in the group is classified as a Type III supporting orga- 3.05(3) of the proposed revenue procedure exemption letter context. With respect to a nization under § 509(a)(3) nor a qualified requires the central organization to retain central organization, section 11.02 of the nonprofit health insurance issuer (QNHII) the authorization but clarifies that the cen- proposed revenue procedure clarifies that described in § 501(c)(29) is eligible for tral organization must retain the authoriza- section 10.02 of Rev. Proc. 2020-5 (or its initial inclusion in or subsequent addition tion only while the group exemption letter successor) describes when § 7428 applies. to a group exemption letter as a subordi- includes the particular subordinate organi- With respect to subordinate organizations, nate organization. Both Type III support- zation, rather than for the entire duration section 11.03 of the proposed revenue pro- ing organizations and QNHIIs are subject the group exemption letter is in effect. cedure describes the limited circumstanc- to complex requirements. Permitting these (6) Information required to maintain a es in which § 7428 applies. types of organizations to be subordinate group exemption letter. Section 11.03(1) of the proposed rev- organizations would not be in the sound Both Rev. Proc. 80-27 and the pro- enue procedure explains that § 7428 ap- interest of tax administration because of posed revenue procedure require a central plies to a final determination by the IRS the complexity of the rules governing such organization to submit certain information that a subordinate organization is no lon- organizations and, in the case of Type III (supplemental group ruling information, ger described in § 501(c) and therefore is supporting organizations, the history of or SGRI) annually to maintain a group ex- not exempt under § 501(a). Such a deter- abuse associated with such organizations. emption letter. Under section 6.01 of the mination occurs when the IRS terminates Additionally, section 3.04(5) of the proposed revenue procedure, a central or- a group exemption letter with respect to a proposed revenue procedure states that an ganization must submit the SGRI at least particular subordinate organization under organization that has had its exemption 30 days, rather than 90 days as required section 8.02(1)(b)(i) of the proposed rev- automatically revoked and that has not by Rev. Proc. 80-27, before the close of enue procedure. Section 11.03(2) of the yet had its exemption reinstated after fil- its annual accounting period. This change proposed revenue procedure explains that ing an application for reinstatement may is intended to increase the accuracy of the § 7428 also applies to a final determination not be initially included in or subsequent- SGRI submitted by the central organiza- by the IRS that a subordinate organization ly added to a group exemption letter as a tion. Nonetheless, the proposed revenue was not eligible for initial inclusion in or subordinate organization. An organization procedure explains that a central organi- subsequent addition to a group exemption that has had its exemption automatically zation may provide additional updates at letter under section 3.04 of the proposed revoked is required to apply for reinstate- any time. Section 6.05 of the proposed revenue procedure (other than under sec- ment under § 6033(j)(2). However, unlike revenue procedure includes the exception tion 3.04(5) of the proposed revenue pro- the other types of organizations that may to the SGRI filing requirement originally cedure regarding automatic revocation). not be initially included in or subsequent- included in Pub. 4573 for central organi- Such a determination occurs when the ly added to a group exemption letter as zations described in § 501(c)(3) that are IRS terminates a group exemption letter subordinate organizations, such as private churches or conventions or associations of with respect to a particular subordinate or- foundations, an organization that has had churches. More specifically, section 6.05 ganization under section 8.02(1)(b)(ii) of its exemption automatically revoked is of the proposed revenue procedure pro- the proposed revenue procedure. Section eligible to become a subordinate organi- vides that a central organization that is a 11.04 of the proposed revenue procedure zation after it has filed an application for church or a convention or association of explains that § 7428 does not apply to cer-

May 18, 2020 844 Bulletin No. 2020–21 tain other actions the IRS may take, such The proposed revenue procedure will to remove a subordinate organization in as not accepting a group exemption letter apply to all new subordinate organizations certain circumstances does not apply to request for a reason described in section added to a preexisting group exemption preexisting subordinate organizations. 4.02 of the proposed revenue procedure or letter (see sections 2.11 and 14.02(3) of The IRS recognizes that imposing this declining to issue a group exemption letter the proposed revenue procedure). Section requirement on preexisting group exemp- for a reason described in section 4.03 of 14.02(3)(b) of the proposed revenue pro- tion letters could require the central orga- the proposed revenue procedure. cedure describes the information a central nization to obtain new authorizations from Section 11.05 of the proposed revenue organization must submit the first time it all of its preexisting subordinate organiza- procedure explains that a subordinate or- adds one or more subordinate organiza- tions, which would likely impose a con- ganization must file the declaratory judg- tions to a preexisting group exemption siderable administrative burden on many ment action under § 7428 with respect to letter. central organizations. a determination affecting its own initial or The proposed revenue procedure gen- Although the definitions of “gener- continuing qualification or classification; erally will apply to preexisting subordi- al supervision” or “control” in sections the central organization may not file the nate organizations (as defined in section 3.02(3) and 3.02(4) of the proposed reve- declaratory judgment action under § 7428 2.10 of the proposed revenue procedure). nue procedure do not apply to preexisting on behalf of the subordinate organization. However, section 14.02(4)(b)(i) through group exemption letters, section 14.02(4) Similarly, a subordinate organization may (iii) of the proposed revenue procedure (e) of the proposed revenue procedure not file a declaratory judgment action un- provide a grandfather rule with respect to explains that a central organization that der § 7428 on behalf of its central organi- certain requirements in the proposed reve- meets the requirements of section 3.02(3) zation. nue procedure. In particular, the following or section 3.02(4) of the proposed revenue definitions and rules will not apply to pre- procedure with respect to a particular pre- Applicability existing subordinate organizations: existing subordinate organization will be • the definitions of “general supervi- deemed to exercise “general supervision” The proposed revenue procedure will sion” or “control” in sections 3.02(3) or “control,” as applicable, over that pre- apply to group exemption letters request- and 3.02(4) of the proposed revenue existing subordinate organization. ed and issued after the date the final rev- procedure; Finally, section 14.03 of the proposed enue procedure is published in the Internal • the matching, foundation classifica- revenue procedure provides examples of Revenue Bulletin and to preexisting group tion, similar purpose, and uniform how the grandfather and transition rules exemption letters (see sections 14.01 and governing instrument requirements in function. 14.02 of the proposed revenue procedure). section 3.03(2) of the proposed reve- However, section 14.02(2)(a) of the pro- nue procedure; and REQUEST FOR COMMENTS posed revenue procedure provides that the • the limitation applicable to Type III requirements that a central organization supporting organizations in section The IRS requests comments on all as- have at least one subordinate organization 3.04(3) of the proposed revenue pro- pects of the proposed revenue procedure, to maintain a group exemption letter (see cedure. including the grandfather and transition section 3.01(2) of the proposed revenue Instead, definitions and rules similar to rules. In particular, the IRS requests com- procedure) and that the central organiza- those contained in Rev. Proc. 80-27 will ments regarding: tion maintain only one group exemption apply. Section 14.02(4)(c) of the proposed • the administrative burden imposed letter (see section 3.01(3) of the proposed revenue procedure clarifies that preex- by the collections of information in revenue procedure) will apply after a one isting subordinate organizations must all sections 3.02(3) (certain information year transition period. Section 14.02(2)(b) be described in the same paragraph of a central organization that exercises of the proposed revenue procedure directs § 501(c), though not necessarily the same general supervision over its subor- a central organization with a preexisting paragraph as the central organization; dinate organizations must annually group exemption letter, but no preexisting preexisting subordinate organizations de- collect from its subordinate organiza- subordinate organizations, to add at least scribed in § 501(c)(3) may be classified tions and transmit to its subordinate one subordinate organization to the preex- in any paragraph of § 509(a) (including organizations), 3.05 (authorization isting group exemption letter or to notify § 509(a)(3)); and all preexisting subordi- for initial inclusion in or subsequent the IRS of its intent to terminate the group nate organizations may have different pri- addition to a group exemption letter exemption letter. Section 14.02(2)(c) of the mary purposes and unique, as opposed to as a subordinate organization), and 6 proposed revenue procedure directs a cen- “uniform,” governing instruments. (SGRI) of the proposed revenue pro- tral organization with more than one preex- Additionally, section 14.02(4)(b)(iv) of cedure; isting group exemption letter to determine, the proposed revenue procedure provides • factors indicating that a subordinate during the transition period, which, if any, that the requirement that the authorization organization is affiliated with a cen- preexisting group exemption letter it in- for initial inclusion in or subsequent addi- tral organization for purposes of sec- tends to maintain and to notify the IRS of tion to a group exemption letter described tion 3.02(2) of the proposed revenue its intent to terminate any additional preex- in section 3.05(1) of the proposed revenue procedure (description of affiliation); isting group exemption letters. procedure permit the central organization and

Bulletin No. 2020–21 845 May 18, 2020 • whether central organizations with Internal Revenue Service Bulletin, Rev. Proc. 80-27 continues to more than one preexisting group ex- Courier’s Desk apply. However, the IRS will not accept emption letter would benefit from 1111 Constitution Ave., N.W. any requests for group exemption let- procedures permitting the consolida- Washington, DC 20224 ters starting on June 17, 2020 (30 days tion or transfer of one or more preex- Attn: CC:PA:LPD:PR (Notice after publication of this notice in the isting group exemption letters. 2020-36) Internal Revenue Bulletin) until publi- Comments should be submitted on or Submissions may also be sent electron- cation of the final revenue procedure or before August 16, 2020. Please include ically to the following e-mail address: other guidance in the Internal Revenue Notice 2020-36 on the cover page. Com- Notice.Comments@irscounsel. ­Bulletin. ments should be sent to the following ad- treas.gov. dress: Please include “Notice 2020-36” in the DRAFTING INFORMATION Internal Revenue Service subject line. CC:PA:LPD:PR (Notice 2020- All comments will be available for The principal authors of this notice are 36), Room 5203 public inspection and copying. Seth J. Groman and Stephanie N. Robbins P.O. Box 7604 of the Office of Associate Chief Counsel Ben Franklin Station CONTINUED APPLICATION OF REV. (Employee Benefits, Exempt Organiza- Washington, DC 20044 PROC. 80-27 tions and Employment Taxes). For further Submissions may be hand delivered information regarding this notice contact Monday through Friday between the Pending publication of the final rev- Seth J. Groman at (202) 317-4086 (not a hours of 8 a.m. and 4 p.m. to: enue procedure in the Internal Revenue toll-free number).

May 18, 2020 846 Bulletin No. 2020–21 PROPOSED REVENUE PROCEDURE

TABLE OF CONTENTS

SECTION 1. PURPOSE

SECTION 2. DEFINITIONS

SECTION 3. REQUIREMENTS TO OBTAIN AND MAINTAIN A GROUP EXEMPTION LETTER .01 Central organization (1) Exemption (2) Minimum number of subordinate organizations (3) Only one group exemption letter .02 The central organization’s relationship with its subordinate organizations (1) In general (2) Affiliation (3) General supervision (4) Control (5) Application .03 Organizations eligible for initial inclusion in or subsequent addition to a group exemption letter as subordinate organizations (1) In general (2) Requirements for initial inclusion in or subsequent addition to a group exemption letter .04 Organizations not eligible for initial inclusion in or subsequent addition to a group exemption letter as subordinate organiza- tions .05 Authorization for initial inclusion in or subsequent addition to a group exemption letter as a subordinate organization (1) In general (2) Removal (3) Retention of the authorization by the central organization .06 Employer identification numbers (EINs) .07 Annual information return or notice

SECTION 4. ISSUANCE OF GROUP EXEMPTION LETTERS .01 Group exemption letter requests .02 Non-acceptance .03 Circumstances under which group exemption letters are not ordinarily issued

SECTION 5. INSTRUCTIONS FOR REQUESTING A GROUP EXEMPTION LETTER .01 Group exemption letter request .02 Information about the central organization .03 Information about the subordinate organizations (1) In general (2) Supporting information (3) Additional requirements .04 Request for a new group exemption letter after the termination of a group exemption letter

SECTION 6. INFORMATION REQUIRED TO MAINTAIN A GROUP EXEMPTION LETTER .01 Information required annually .02 Supplemental group ruling information (1) Changes in purposes or activities (2) Lists of certain changes, removals, or additions (3) Organizations to be added to the group exemption letter as subordinate organizations (4) No change (5) Intent to terminate the group exemption letter

Bulletin No. 2020–21 847 May 18, 2020 .03 Address .04 Additional information .05 Exception for central organizations that are churches or conventions or associations of churches

SECTION 7. ANNUAL FILING REQUIREMENT .01 In general .02 Group returns

SECTION 8. TERMINATION OF THE GROUP EXEMPTION LETTER .01 Termination of the group exemption letter with respect to all subordinate organizations (1) Termination by the IRS (2) Termination by the central organization .02 Termination of the group exemption letter with respect to a particular subordinate organization (1) Removal from the group exemption letter (2) Group exemption letter remains in effect

SECTION 9. EFFECT OF NON-ACCEPTANCE, NON-ISSUANCE, TERMINATION, OR REMOVAL .01 Effect of non-acceptance or non-issuance .02 Effect of termination (1) In general (2) Churches or conventions or associations of churches .03 Effect of removal .04 Subsequent recognition of exemption (1) In general (2) Organization required to file an application (3) Organization not required to file an application (4) Automatic revocation

SECTION 10. EFFECTIVE DATE OF EXEMPTION .01 Initial inclusion .02 Subsequent addition .03 Termination or removal (1) In general (2) Automatic revocation (3) Declaratory judgment action

SECTION 11. DECLARATORY JUDGMENT PROVISIONS OF § 7428 .01 In general .02 Application to central organizations .03 Application to subordinate organizations .04 Actions to which § 7428 does not apply .05 Who must file

SECTION 12. RELIANCE .01 By a central or subordinate organization .02 By grantors and contributors

SECTION 13. DISCLOSURE OF GROUP EXEMPTION LETTER REQUESTS AND GROUP EXEMPTION LETTERS

SECTION 14. APPLICABILITY .01 New group exemption letters .02 Preexisting group exemption letters (1) In general (2) Certain sections applicable to preexisting group exemption letters after a transition period (3) New subordinate organizations (4) Preexisting subordinate organizations .03 Examples

May 18, 2020 848 Bulletin No. 2020–21 (1) One preexisting group exemption letter for subordinate organizations described in a different paragraph of § 501(c) than the central organization (2) One preexisting group exemption letter for subordinate organizations described in the same paragraph of § 501(c) as the central organization (3) Two preexisting group exemption letters for subordinate organizations described in different paragraphs of § 501(c) (4) Central organization that is not described in § 501(c) with two preexisting group exemption letters for subordinate organizations described in different paragraphs of § 501(c) (5) One preexisting group exemption letter with no subordinate organizations (6) One preexisting group exemption letter with subordinate organizations described in different paragraphs of § 501(c)

SECTION 15. EFFECT ON OTHER REVENUE PROCEDURES

SECTION 16. EFFECTIVE DATE

Bulletin No. 2020–21 849 May 18, 2020 SECTION 1. PURPOSE ganization Exempt From Income Tax”; or (i) Described in § 501(c); Form 990-N, “Electronic Notice (e-Post- (ii) An instrumentality; or The purpose of this revenue procedure card) for Tax-Exempt Organizations Not Re- (iii) An agency of a political subdivi- is to modify and supersede Rev. Proc. 80- quired to File Form 990 or Form 990-EZ”). sion. 27, 1980-1 C.B. 677 (as modified by Rev. .06 The term “automatically revoked” (b) Recognition of exemption. A central Proc. 96-40, 1996-2 C.B. 301) by setting refers to an organization that has had its organization described in § 501(c) (see forth updated procedures under which rec- exemption automatically revoked by oper- section 3.01(1)(a)(i) of this revenue proce- ognition of exemption from federal income ation of § 6033(j) for failure to file an an- dure) must obtain recognition of exemp- tax for organizations described in § 501(c) nual information return or notice for three tion from the IRS by filing an application of the Internal Revenue Code (Code) may consecutive years. or, in the case of a central organization be obtained on a group basis for subordi- .07 The term “application for reinstate- that has had its exemption automatically nate organizations affiliated with and under ment” means an application filed in the revoked, by filing an application for rein- the general supervision or control of a cen- manner described by Rev. Proc. 2014-11, statement. tral organization. This revenue procedure 2014-3 I.R.B. 411, as supplemented by (2) Minimum number of subordinate relieves each subordinate organization Rev. Proc. 2020-5 (or its successor), after organizations. A central organization covered by a group exemption letter from an organization’s exemption has been au- must have at least five subordinate - or filing its own application for recognition tomatically revoked. ganizations to obtain a group exemp- of exemption. This revenue procedure also .08 The term “National Taxonomy of Ex- tion letter, and it must have at least one sets forth updated procedures a central or- empt Entities code” or “NTEE code” means subordinate organization to maintain the ganization must follow to maintain a group a three-character series of letters and num- group exemption letter thereafter (except exemption letter. This revenue procedure is bers that is used to classify an organization. as provided in section 14.02(2)(a)(i) of provided as a matter of sound tax adminis- For a complete list of NTEE codes, visit the this revenue procedure, which provides tration for the administrative convenience Urban Institute, National Center for Charita- a transition period for preexisting group of central organizations and the Internal ble Statistics website at nccs.urban.org. exemption letters). Revenue Service (IRS). .09 The term “preexisting group ex- (3) Only one group exemption letter. emption letter” means a group exemption A central organization may maintain only SECTION 2. DEFINITIONS letter in existence on the date the final rev- one group exemption letter (except as enue procedure is published in the Internal provided in section 14.02(2)(a)(ii) of this .01 The term “group exemption letter” Revenue Bulletin. revenue procedure, which provides a tran- means a letter issued to a central organi- .10 The term “preexisting subordinate sition period for preexisting group exemp- zation recognizing on a group basis the organization” means, with respect to a tion letters). exemption of subordinate organizations preexisting group exemption letter, a sub- .02 The central organization’s relation- described in § 501(c) on whose behalf the ordinate organization included in the pre- ship with its subordinate organizations. central organization has applied for rec- existing group exemption letter on or be- (1) In general. A central organization must ognition of exemption in accordance with fore the date the final revenue procedure is establish that each subordinate organiza- this revenue procedure. published in the Internal Revenue Bulletin. tion to be included in the group exemption .02 The term “central organization” .11 The term “new subordinate organi- letter is affiliated with the central organi- means an organization that has one or zation” means a subordinate organization zation (as described in section 3.02(2) of more subordinate organizations under its subsequently added to a preexisting group this revenue procedure) and subject to its general supervision or control. exemption letter after the date the final general supervision (as described in sec- .03 The term “subordinate organiza- revenue procedure is published in the In- tion 3.02(3) of this revenue procedure) or tion” means a chapter, local, post, or unit ternal Revenue Bulletin. control (as described in section 3.02(4) of of a central organization. It may or may .12 The term “supplemental group rul- this revenue procedure). not be incorporated, but it must have an ing information” or “SGRI” means the (2) Affiliation. A subordinate organiza- organizing document (see section 3.03(2) information described in section 6 of this tion’s affiliation with the central organi- (d) of this revenue procedure). revenue procedure that a central organi- zation is demonstrated by the entirety of .04 The term “application” means a re- zation must submit annually to the IRS the information required to be submitted quest for recognition of exemption from about its subordinate organizations unless in section 5.03 of this revenue procedure. federal income tax under § 501 in the an exception applies. (3) General supervision. A subordi- manner described by Rev. Proc. 2020-5, nate organization is subject to the central 2020-1 I.R.B. 241 (or its successor). SECTION 3. REQUIREMENTS TO organization’s general supervision if the .05 The term “annual information return OBTAIN AND MAINTAIN A GROUP central organization— or notice” means the return or notice an orga- EXEMPTION LETTER (a) annually obtains, reviews, and re- nization must file annually under § 6033(a) tains information on the subordinate orga- or § 6033(i) (that is, Form 990, “Return of .01 Central organization. (1) Exemp- nization’s finances, activities, and compli- Organization Exempt From Income Tax”; tion. (a) In general. A central organization ance with annual filing requirements (see Form 990-EZ, “Short Form Return of Or- must be— section 7 of this revenue procedure), and

May 18, 2020 850 Bulletin No. 2020–21 (b) transmits written information to must be described in the same paragraph (ii), and hospitals described in § 170(b)(1) (or otherwise educates) the subordinate of § 501(c) as the central organization, (A)(iii). organization about the requirements to including a central organization that is ei- (iii) Publicly supported subordinate maintain tax-exempt status under the ap- ther an instrumentality or an agency of a organizations. Because public support un- propriate paragraph of § 501(c), including political subdivision and that is described der §§ 509(a)(1) and 170(b)(1)(A)(vi) or annual filing requirements (see section 7 in § 501(c). For example, if a central orga- under § 509(a)(2) is determined annually of this revenue procedure). nization is described in § 501(c)(3), all the (and therefore may change), subordinate (4) Control. A subordinate organiza- subordinate organizations initially includ- organizations that are classified as a pub- tion is subject to the central organization’s ed in or subsequently added to the group licly supported organizations either un- control if— exemption letter must also be described in der §§ 509(a)(1) and 170(b)(1)(A)(vi) or (a) The central organization appoints a § 501(c)(3). under § 509(a)(2) will be considered, for majority of the subordinate organization’s (iii) Central organization not described purposes of section 3.03(2)(b)(i) of this officers, directors, or trustees; or in § 501(c). If the central organization is revenue procedure, to be classified in the (b) A majority of the subordinate orga- either an instrumentality or an agency of a same paragraph of § 509(a). nization’s officers, directors, or trustees political subdivision and is not described (iv) Foundation classification of the are officers, directors, or trustees of the in § 501(c), the matching requirement central organization may differ from the central organization. described in section 3.03(2)(a)(ii) of this foundation classification of its subordinate (5) Application. The term “general su- revenue procedure does not apply. In this organizations. Subordinate organizations pervision” described in section 3.02(3) of case, such a central organization may have described in § 501(c)(3) are not required this revenue procedure and the term “con- subordinate organizations described in to be classified under the same paragraph trol” described in section 3.02(4) of this any paragraph of § 501(c), provided that of § 509(a) as the central organization. revenue procedure apply only for purpos- the organizations are eligible to be subor- For example, a central organization that es of this revenue procedure and § 1.6033- dinate organizations (see section 3.04 of is classified as a Type III supporting- or 2(d) of the Treasury Regulations (relating this revenue procedure) and the subordi- ganization under § 509(a)(3) may have a to group returns). nate organizations initially included in or group exemption letter with subordinate .03 Organizations eligible for initial subsequently added to the group exemp- organizations classified under § 509(a)(1). inclusion in or subsequent addition to a tion letter are all described in the same (c) Similar purpose requirement. The group exemption letter as subordinate paragraph of § 501(c) (see section 3.03(2) primary purpose of all the subordinate organizations. (1) In general. Unless de- (a)(i) of this revenue procedure). organizations described in § 501(c) (oth- scribed in section 3.04 of this revenue pro- (b) Foundation classification require- er than § 501(c)(3)) initially included in cedure and subject to the requirements de- ment. (i) In general. Except as provided or subsequently added to a group exemp- scribed in section 3.03(2) of this revenue in section 3.03(2)(b)(iii) of this revenue tion letter must be described by the same procedure, an organization described in procedure, all subordinate organizations NTEE code. § 501(c) may be eligible for initial inclu- described in § 501(c)(3) that are initially (d) Uniform governing instrument. All sion in or subsequent addition to a group included in or subsequently added to a subordinate organizations must adopt a exemption letter as a subordinate organi- group exemption letter must be classified uniform governing instrument (charter, zation. as public charities under the same para- trust indenture, articles of association, (2) Requirements for initial inclusion graph of § 509(a) (but see section 3.04(3) etc.). Representative instruments are not in or subsequent addition to a group ex- of this revenue procedure, which provides acceptable for this purpose. However, if emption letter. All subordinate organiza- that an organization described in § 501(c) a group exemption letter includes subor- tions initially included in or subsequently (3) that is classified as a Type III support- dinate organizations described in § 501(c) added to a group exemption letter must ing organization is not eligible to be ini- (3) with different purposes, the governing meet the following requirements (except tially included in or subsequently added to instrument describing each distinct chari- as provided in section 14.02(4) of this rev- a group exemption letter as a subordinate table, educational, scientific, etc. purpose enue procedure regarding preexisting sub- organization). must be a uniform governing instrument. ordinate organizations). (ii) Classification under §§ 509(a)(1) For example, if a group exemption letter (a) Matching requirements. (i) Subor- and 170(b)(1)(A). Subordinate organiza- includes subordinate organizations that dinate organizations. All subordinate or- tions classified as public charities under are schools and hospitals, all the subordi- ganizations initially included in or subse- § 509(a)(1) are not required to be classified nate organizations that are schools must quently added to a group exemption letter under the same paragraph of § 170(b)(1) adopt a uniform governing instrument must be described in the same paragraph (A). For example, a central organization describing their educational purpose and of § 501(c). described in § 501(c)(3) may have subor- all the subordinate organizations that are (ii) Central organization described dinate organizations described in § 501(c) hospitals must adopt a uniform governing in § 501(c). If the central organization is (3) that are classified as public charities instrument describing their charitable pur- described in § 501(c), all subordinate or- under § 509(a)(1) but are churches de- pose. ganizations initially included in or subse- scribed in § 170(b)(1)(A)(i), educational .04 Organizations not eligible for ini- quently added to a group exemption letter organizations described in § 170(b)(1)(A) tial inclusion in or subsequent addition to

Bulletin No. 2020–21 851 May 18, 2020 a group exemption letter as subordinate nate organization’s behalf) must obtain include its name, address, and EIN; and organizations. The following organiza- its own EIN prior to initial inclusion in or information establishing that it is de- tions are not eligible to be initially includ- subsequent addition to a group exemption scribed in section 3.01(1)(a) of this reve- ed in or subsequently added to a group letter. nue procedure. A central organization that exemption letter as subordinate organiza- .07 Annual information return or no- has not obtained recognition of exemption tions: tice. A central organization and all subor- at the time it requests a group exemption (1) An organization that is organized in dinate organizations initially included in letter, as required by section 3.01(1)(b) a foreign country. or subsequently added to a group exemp- of this revenue procedure, may submit (2) An organization described in tion letter must comply with the annual such request concurrently with its own § 501(c)(3) that is classified as a private filing requirement described in section 7 application, or, in the case of a central foundation under § 509(a). of this revenue procedure. organization that has had its exemption (3) An organization described in automatically revoked, its application for § 501(c)(3) that is classified as a Type III SECTION 4. ISSUANCE OF GROUP reinstatement (see section 4.02(7)(a)(ii) of supporting organization under § 509(a) EXEMPTION LETTERS Rev. Proc. 2020-5 (or its successor) and (3). section 3.01(1)(b) of this revenue proce- (4) A qualified nonprofit health insur- .01 Group exemption letter requests. dure). ance issuer (QNHII) described in § 501(c) The IRS will consider requests from cen- .03 Information about the subordinate (29). tral organizations for group exemption organizations. (1) In general. The central (5) An organization that has had its ex- letters made in the manner required by organization must include the following emption automatically revoked and that section 5.01 of this revenue procedure and statements, representations, and informa- has not yet had its exemption reinstated Rev. Proc. 2020-5 (or its successor). tion on behalf of its subordinate organiza- after filing an application for reinstate- .02 Non-acceptance. A group exemp- tions: ment. tion letter request that is missing any item (a) Information verifying that each .05 Authorization for initial inclusion of information required by section 5 of subordinate organization is affiliated with in or subsequent addition to a group ex- this revenue procedure will not be consid- and subject to the central organization’s emption letter as a subordinate orga- ered substantially complete and will not general supervision or control (see section nization. (1) In general. A subordinate be accepted by the IRS. 3.02 of this revenue procedure). organization must authorize the central .03 Circumstances under which group (b) A representation that the subordi- organization in writing to include the sub- exemption letters are not ordinarily is- nate organizations are all described in the ordinate organization in the request for the sued. The IRS may decline to issue a group same paragraph of § 501(c) as the central group exemption letter or to add the sub- exemption letter where the activities de- organization (see sections 3.03(2)(a)(i) ordinate organization to an existing group scribed in the group exemption letter re- and 3.03(2)(a)(ii) of this revenue proce- exemption letter. The authorization must quest involve complex facts and circum- dure) or, if the central organization is ei- be signed by a duly authorized officer of stances that, in the interest of sound tax ther an instrumentality or an agency of a the subordinate organization. administration, are more appropriate for political subdivision and is not described (2) Removal. The authorization de- determination on an organization-by-or- in § 501(c), the paragraph of § 501(c) in scribed in section 3.05(1) of this revenue ganization basis. which all subordinate organizations are or procedure must acknowledge that the cen- will be described (see sections 3.03(2)(a) tral organization may remove the subordi- SECTION 5. INSTRUCTIONS FOR (i) and 3.03(2)(a)(iii) of this revenue pro- nate organization from the group exemp- REQUESTING A GROUP EXEMPTION cedure). tion letter if the subordinate organization LETTER (c) If the subordinate organizations are fails to comply with the requirements of or will be described in § 501(c)(3), the this revenue procedure. .01 Group exemption letter request. A foundation classification of all the subor- (3) Retention of the authorization by group exemption letter request must be dinate organizations (see section 3.03(2) the central organization. The authoriza- made in the manner described by Rev. (b) of this revenue procedure). tion described in section 3.05(1) of this Proc. 2020-5 (or its successor). In addi- (d) A representation that no subordi- revenue procedure must be retained by the tion, the group exemption letter request nate organization is organized in a foreign central organization while the group ex- must include all of the information de- country (see section 3.04(1) of this reve- emption letter is in effect with respect to scribed in sections 5.02, 5.03, and, if ap- nue procedure). the authorizing subordinate organization. plicable, 5.04 of this revenue procedure. (e) If the subordinate organizations .06 Employer identification numbers A subordinate organization included in a are or will be described in § 501(c)(3), a (EINs). The central organization and each group exemption letter should not apply representation that no subordinate organi- subordinate organization must have its separately for recognition of exemption zation is classified as a private foundation own EIN. The central organization must (except in the circumstances described in under § 509(a) or a Type III supporting obtain its own EIN prior to filing an appli- section 9 of this revenue procedure). organization under § 509(a)(3) (see sec- cation, and each subordinate organization .02 Information about the central or- tions 3.04(2) and 3.04(3) of this revenue (or the central organization on a subordi- ganization. The central organization must procedure).

May 18, 2020 852 Bulletin No. 2020–21 (f) A summary of the subordinate orga- included in the group exemption letter are sion. In its request for the group exemp- nizations’ purposes and activities, includ- identified). tion letter, the central organization must ing the sources of their receipts and the (c) If applicable, a list of subordinate represent that each subordinate organiza- nature of their expenditures. organizations to be included in the group tion described in § 501(c)(4) has submit- (g) A representation that the primary exemption letter to which the IRS has is- ted or will submit Form 8976 (unless an purpose of all the subordinate organiza- sued determination letters that are still ef- exception applies). tions described in § 501(c) (other than fective (that is, have not been automatical- .04 Request for a new group exemp- § 501(c)(3)) is described by the same ly or otherwise revoked). tion letter after the termination of a group NTEE code and the NTEE code describ- (3) Additional requirements. In cer- exemption letter. If the IRS terminates a ing the subordinate organizations’ primary tain cases, the central organization must group exemption letter as described in purpose (see section 3.03(2)(c) of this rev- submit information establishing that its section 8.01(1) of this revenue procedure, enue procedure). subordinate organizations meet additional the central organization may request a (h) A statement that each subordinate requirements. For example, a central or- new group exemption letter in the man- organization has furnished written autho- ganization with subordinate organizations ner described in sections 5.01 through rization described in section 3.05 of this that are private schools, charitable hospi- 5.03 of this revenue procedure, but also revenue procedure to the central organiza- tals, or social welfare organizations must must include a description of the policies tion. submit the information described in this or procedures it intends to implement or (i) A statement confirming that all section 5.03(3), as applicable, in addition has implemented to ensure the continued subordinate organizations were orga- to the information generally required by effectiveness of the new group exemption nized within 27 months of the post- section 5 of this revenue procedure. letter. mark date of the group exemption let- (a) Private schools. If the group ex- ter request, or, if any such subordinate emption letter request involves subor- SECTION 6. INFORMATION organizations have been organized for dinate organizations that are or will be REQUIRED TO MAINTAIN A GROUP more than 27 months and were not pre- private schools described in § 501(c)(3), EXEMPTION LETTER viously recognized by the IRS as being the central organization must include the described in § 501(c) or included in a information required by Rev. Proc. 75- .01 Information required annually. The different group exemption letter, a state- 50, 1975-2 C.B. 587, as modified by Rev. central organization must submit the in- ment that all subordinate organizations Proc. 2019-22 , 2019-22 I.R.B. 1260, and formation described in section 6.02 of this are willing to be recognized as exempt such other information necessary to es- revenue procedure to the IRS annually at from the postmark date of the group ex- tablish that the subordinate organizations least 30 days before the close of its annual emption letter request (see section 10.01 comply with the requirements of Rev. Rul. accounting period. A central organization of this revenue procedure). 71-447, 1971-2 C.B. 230. may provide additional updates at any (j) If applicable, a statement that any (b) Charitable hospitals. If the group time. subordinate organizations on behalf of exemption letter request involves subordi- .02 Supplemental group ruling in- which the central organization will file nate organizations that are or will be hos- formation. (1) Changes in purposes or group returns, as described in section 7.02 pital organizations or facilities described activities. In the case of subordinate or- of this revenue procedure, are on the same in § 501(c)(3), the central organization ganizations described in § 501(c) (other accounting period as the central organiza- must provide the information necessary than § 501(c)(3)), the central organiza- tion. to establish that each subordinate organi- tion must submit a detailed description (2) Supporting information. The central zation meets the requirements of § 501(r) of any change in the purposes of all of organization must provide the following and Rev. Rul. 69-545, 1969-2 C.B. 117. its subordinate organizations (see section supporting information as attachments: (c) Social welfare organizations. A 3.03(2)(c) of this revenue procedure). In (a) A sample copy of the uniform gov- subordinate organization described in the case of subordinate organizations de- erning instrument or, if the subordinate § 501(c)(4) that is included in or subse- scribed in § 501(c)(3), the central organi- organizations are described in § 501(c)(3) quently added to a group exemption letter zation must submit a detailed description and have different purposes, sample cop- must, no later than 60 days after the date of any change in the purpose or purposes ies of the uniform instrument describing on which the organization was formed as a of any of its subordinate organizations. each distinct purpose (see section 3.03(2) legal entity, submit a completed electronic In the case of subordinate organizations (d) of this revenue procedure). Form 8976 to the IRS in the manner de- described in any paragraph of § 501(c), (b) A list of the names, mailing address- scribed in Rev. Proc. 2016-41, 2016-30 the central organization must submit a es, EINs, and dates of formation or incor- I.R.B. 165 (unless an exception applies). detailed description of any change in the poration of subordinate organizations to A subordinate organization may autho- activities of its subordinate organizations. be included in the group exemption letter rize an individual representing the central (2) Lists of certain changes, removals, (a current directory of subordinate orga- organization to submit Form 8976 on the or additions. (a) List categories. The cen- nizations may be furnished in lieu of the subordinate organization’s behalf and to tral organization must submit a separate list if it includes the required information receive any communications relating to list for each of the following categories and if the subordinate organizations to be the subordinate organization’s submis- (as applicable):

Bulletin No. 2020–21 853 May 18, 2020 (i) Subordinate organizations that have (5) Intent to terminate the group ex- file a group return on Form 990 for two changed their names or mailing addresses emption letter. If a central organization in- or more of its subordinate organizations. during the year. tends to terminate its group exemption let- When filing the group return, the central (ii) Subordinate organizations no lon- ter, the central organization must submit a organization must use a special EIN (sep- ger to be included in the group exemption statement to that effect (see section 9.02 arate from the central organization’s EIN) letter (see section 8.02 of this revenue pro- of this revenue procedure for the effect of that is issued solely for the purpose of the cedure). such termination on any subordinate orga- group return. A group return is consid- (iii) Subordinate organizations to be nization). The central organization should ered the return of each subordinate orga- added to the group exemption letter (see notify each subordinate of the termination nization included in the group return and section 6.02(3) of this revenue procedure). and provide information regarding how therefore relieves each subordinate orga- (b) Required information. Each list de- the subordinate organization may apply nization included in the group return of scribed in section 6.02(2)(a) of this rev- for or obtain recognition of its exemption the requirement to file a separate annual enue procedure must include the name, (see section 9.04 of this revenue proce- information return or notice described in mailing address, EIN, and date of forma- dure). section 7.01 of this revenue procedure. tion or incorporation of the affected subor- .03 Address. The information required dinate organizations. by section 6.01 of this revenue procedure SECTION 8. TERMINATION OF THE (c) No annotated directories. An anno- must be sent to: GROUP EXEMPTION LETTER tated directory of subordinate organiza- Ogden Service Center tions is not acceptable for purposes of sec- Mail Stop 6271 .01 Termination of the group exemption tion 6.02(2)(a) of this revenue procedure. 1000 South 1200 letter with respect to all subordinate or- (3) Organizations to be added to the Ogden, UT 84404-4749 ganizations. (1) Termination by the IRS. group exemption letter as subordinate .04 Additional information. Submis- The IRS may terminate a group exemp- organizations. The central organization sion of the information required by this tion letter with respect to all subordinate must submit the following information section does not relieve the central organi- organizations if— with respect to any organizations being zation or any of its subordinate organiza- (a) The central organization notifies the added to the group exemption letter as tions of the duty to submit such additional IRS that it is going out of existence; subordinate organizations, as described in information as the IRS may require to de- (b) The IRS determines that the cen- section 6.02(2)(a)(iii) of this revenue pro- termine whether the conditions for contin- tral organization is no longer described in cedure: ued exemption are being met. See § 6001 § 501(c) and therefore is not exempt under (a) A statement that the information and the regulations thereunder. § 501(a); upon which the group exemption letter .05 Exception for central organiza- (c) The central organization’s exemp- was based (see section 5.03 of this reve- tions that are churches or conventions or tion is automatically revoked; nue procedure) is applicable in all material associations of churches. A central orga- (d) The central organization fails to respects to the subordinate organizations nization described in § 501(c)(3) that is submit a timely SGRI (see section 6 of being added to the group exemption letter. a church or convention or association of this revenue procedure); (b) With respect to subordinate organi- churches and that maintains a group ex- (e) The central organization has no zations being added to the group exemption emption letter, may, but is not required to, subordinate organizations (see section letter, the information required by sections submit the information described in sec- 3.01(2) of this revenue procedure); 5.03(1)(h) (statement regarding written tion 6.01 of this revenue procedure. (f) The central organization fails to authorization for inclusion in the group exercise general supervision (see section exemption letter), 5.03(1)(j) (statement re- SECTION 7. ANNUAL FILING 3.02(3) of this revenue procedure) or con- garding the accounting period of subordi- REQUIREMENT trol (see section 3.02(4) of this revenue nate organizations on behalf of which the procedure) over one or more subordinate central organization will file group returns), .01 In general. A group exemption let- organizations; 5.03(2)(c) (list of subordinate organizations ter does not change the general require- (g) More than half of the subordinate with determination letters), and 5.03(3) ment described in § 6033(a)(1) that every organizations have had their exemption (any additional information as applica- organization exempt from federal income automatically revoked; ble) of this revenue procedure (see section tax under § 501(a) must file an annual in- (h) More than half of the subordinate 10.02 of this revenue procedure regarding formation return or notice, as applicable. organizations fail to meet the requirements effective date of exemption for a subordi- Accordingly, unless a filing exception for initial inclusion in or subsequent addi- nate organization subsequently added to a applies, the central organization and each tion to a group exemption letter (see sec- group exemption letter). subordinate organization must file an an- tion 3.03(2) of this revenue procedure); or (4) No change. If the central organiza- nual information return or notice. (i) The central organization otherwise tion has no changes described in section .02 Group returns. Section 1.6033-2(d) fails to meet the requirements of this rev- 6.02(1) or section 6.02(2) of this revenue provides that, in addition to the annual in- enue procedure. procedure to report, the central organiza- formation return or notice filed on its own (2) Termination by the central organi- tion must submit a statement to that effect. behalf, a central organization may also zation. The central organization may ter-

May 18, 2020 854 Bulletin No. 2020–21 minate its group exemption letter at any declines to issue a group exemption let- § 505 or § 508 may obtain recognition of time by providing the notice described in ter (see section 4.03 of this revenue pro- its exemption by— section 6.02(5) of this revenue procedure. cedure), the IRS will not recognize the (a) Filing an application; .02 Termination of the group exemption exemption of any organization initially (b) Being added to a group exemption letter with respect to a particular subor- included in the group exemption letter re- letter maintained by another central orga- dinate organization. (1) Removal from the quest as a subordinate organization, unless nization; group exemption letter. A subordinate or- the IRS previously issued a determination (c) Being included by another central ganization will be removed from a group letter to such subordinate organization and organization in a request for a new group exemption letter if— that determination letter is still effective exemption letter; or (a) The central organization notifies the (that is, it has not been automatically or (d) Being included by the same central IRS that the subordinate organization will otherwise revoked) on the date of non-ac- organization in a request for a new group no longer be included in the group exemp- ceptance or non-issuance, as applicable, exemption letter. tion letter (see section 6.02(2)(a)(ii) of this except as provided in section 9.04 of this (3) Organization not required to file revenue procedure); revenue procedure. an application. An organization that is (b) The IRS determines that— .02 Effect of termination. (1) In gener- not required to apply for recognition of (i) The subordinate organization is no al. When the IRS or the central organiza- exemption under § 505 or § 508 may ob- longer described in § 501(c) and therefore tion terminates a group exemption letter tain recognition of its exemption in the is not exempt under § 501(a); or with respect to all subordinate organiza- same manner described in section 9.04(2) (ii) The subordinate organization is an tions (see section 8.01 of this revenue pro- of this revenue procedure. Alternatively, organization not eligible for initial inclu- cedure), the IRS will not thereafter recog- such a subordinate organization may de- sion in or subsequent addition to a group nize the exempt status of any subordinate clare its exempt status (without obtaining exemption letter because it is an organiza- organization included in the group exemp- recognition from the IRS) by filing annual tion described in section 3.04(1) (foreign tion letter, except as provided in section information returns or notices (see section organization), section 3.04(2) (private 9.04 of this revenue procedure. 7 of this revenue procedure). In certain cir- foundation), section 3.04(3) (Type III sup- (2) Churches or conventions or associ- cumstances, an organization that intends porting organization), or section 3.04(4) ations of churches. Notwithstanding sec- to operate as an organization described in (QNHII) of this revenue procedure; tion 9.02(1) of this revenue procedure, the section 501(c)(4) may be required to file (c) The subordinate organization’s ex- termination of a group exemption letter Form 8976 (see section 5.03(3)(c) of this emption is automatically revoked (see will not affect the exempt status of subor- revenue procedure). section 3.04(5) of this revenue procedure); dinate organizations that are churches or (4) Automatic revocation. Notwith- or conventions or associations of churches, standing section 9.04(3) of this revenue (d) The subordinate organization fails described in § 501(c)(3). See § 508(c). procedure, a subordinate organization to satisfy one or more of the matching, Nonetheless, a subordinate organization must file an application for reinstate- foundation classification, or similar - pur that is a church or a convention or associ- ment if the subordinate organization was pose requirements (see sections 3.03(2) ation of churches may obtain recognition removed from a group exemption letter (a), 3.03(2)(b), and 3.03(2)(c) of this rev- of its exemption from the IRS by complet- because its exemption was automatically enue procedure). ing one of the actions described in section revoked (see section 8.02(1)(c) of this rev- (2) Group exemption letter remains in 9.04(2) of this revenue procedure. enue procedure). A central organization effect. The group exemption letter will re- .03 Effect of removal. If the IRS or the may not add the subordinate organization main in effect with respect to all non-af- central organization notifies a particular to a group exemption letter (see section fected subordinate organizations after the subordinate organization that it has been 3.04(5) of this revenue procedure) unless removal of one or more subordinate or- removed from a group exemption letter, and until the IRS has reinstated the subor- ganizations under section 8.02(1) of this the IRS will not thereafter recognize the dinate organization’s exemption. revenue procedure unless the IRS has ter- exempt status of the affected subordinate minated the group exemption letter with organization, except as provided in sec- SECTION 10. EFFECTIVE DATE OF respect to all subordinate organizations tion 9.04 of this revenue procedure. EXEMPTION under section 8.01 of this revenue proce- .04 Subsequent recognition of exemp- dure. tion. (1) In general. Notwithstanding sec- .01 Initial inclusion. If all of the or- tions 9.01, 9.02, and 9.03 of this revenue ganizations initially included in a group SECTION 9. EFFECT OF NON- procedure, an organization may obtain exemption letter as subordinate organiza- ACCEPTANCE, NON-ISSUANCE, recognition of its exempt status or may tions were organized within 27 months of TERMINATION, OR REMOVAL declare its exempt status, as applicable, by the postmark date of the group exemption completing an action described in section letter request, then the effective date of .01 Effect of non-acceptance or non-is- 9.04(2) or 9.04(3). exemption for each organization initially suance. When the IRS does not accept a (2) Organization required to file an included in a group exemption letter as a group exemption letter request (see sec- application. An organization required to subordinate organization will be the or- tion 4.02 of this revenue procedure) or apply for recognition of exemption under ganization’s date of formation, or, in the

Bulletin No. 2020–21 855 May 18, 2020 case of an organization that has had its ex- empt status. In this case, the organization (QNHII) of the proposed revenue proce- emption automatically revoked and subse- will be taxable from the date the IRS ter- dure (see section 8.02(1)(b)(ii) of this rev- quently reinstated after filing an applica- minated the group exemption letter until enue procedure). tion for reinstatement, the date on which the postmark date of its application. An .04 Actions to which § 7428 does not the organization’s exemption was reinstat- organization that is not required to file an apply. Section 7428 does not apply to the ed, determined in accordance with Rev. application may declare its exempt status following actions: Proc. 2014-11. If any organization was (without obtaining recognition from the (1) Non-acceptance of a group exemp- organized more than 27 months before the IRS) by continuing to file annual informa- tion letter request (see section 4.02 of this postmark date of the group exemption let- tion returns or notices (see section 9.04(3) revenue procedure). ter request, was not previously recognized of this revenue procedure). (2) Non-issuance of a group exemption by the IRS as being described in § 501(c), (2) Automatic revocation. In the case of letter (see section 4.03 of this revenue pro- and was not included in another group a subordinate organization that has had its cedure). exemption letter, the effective date of all exemption automatically revoked, the ef- (3) Termination of a group exemption the organizations initially included in the fective date of exemption for such organi- letter for a reason described in section group exemption letter as subordinate or- zation will be the date on which the orga- 8.01(1), other than section 8.01(1)(b) ganizations will be the postmark date of nization’s exemption was reinstated after (determination by the IRS that the cen- the group exemption letter request. being automatically revoked, determined tral organization is no longer described .02 Subsequent addition. The effective in accordance with Rev. Proc. 2014-11, as in § 501(c), in which case § 7428 would date of exemption of an organization that applicable. apply to the central organization), of this is subsequently added to a group exemp- (3) Declaratory judgment action. In revenue procedure. tion letter as a subordinate organization certain circumstances, a subordinate orga- (4) Removal of a subordinate organi- depends on its exempt status immediately nization may be able to file a declaratory zation from a group exemption letter as prior to its addition. If, at such time, the judgment action under § 7428, in which described in section 8.02(1), other than organization was not recognized by the case, the effective date of exemption for section 8.02(1)(b)(ii) (determination by IRS as being described in § 501(c) and such organization will be determined by the IRS that an organization is not eligi- was not included in another group exemp- the outcome of the proceeding. ble for initial inclusion in or subsequent tion letter, the effective date of exemption addition to a group exemption letter as a will be the postmark date of the infor- SECTION 11. DECLARATORY subordinate organization), of this revenue mation required under section 6 of this JUDGMENT PROVISIONS OF § 7428 procedure. revenue procedure, regardless of the or- .05 Who must file. A subordinate or- ganization’s date of formation. If, at such .01 In general. Section 10 of Rev. Proc. ganization must file the declaratory judg- time, the organization was recognized by 2020-5 (or its successor) generally ex- ment action under § 7428 on its own the IRS as being described in § 501(c) or plains when and how a declaratory judg- behalf with respect to a determination af- was included in another group exemption ment proceeding under § 7428 may be fecting its own initial or continuing qual- letter, the effective date of exemption will filed in the United States Tax Court, the ification or classification. Accordingly, a be the same as prior to its addition to the United States Court of Federal Claims, or central organization may not file a declar- group exemption letter. the District Court of the United States for atory judgment action under § 7428 on .03 Termination or removal. (1) In the District of Columbia. behalf of one or more of its subordinate general. Except as provided in section .02 Application to central organiza- organizations. Conversely, a subordinate 10.03(2) or section 10.03(3) of this rev- tions. Section 10.02 of Rev. Proc. 2020-5 organization may not file the declaratory enue procedure, if a group exemption (or its successor) describes when § 7428 judgment action under § 7428 on behalf letter is terminated, either with respect applies to a central organization. of its central organization. For more in- to all subordinate organizations or with .03 Application to subordinate orga- formation on the application of § 7428, respect to a particular subordinate organi- nizations. Section 7428 applies to a final see section 10 of Rev. Proc. 2020-5 (or zation, an organization required to apply determination by the IRS that a particular its successor). for recognition of exemption under § 505 subordinate organization— or § 508 must file an application within (1) Is no longer described in § 501(c) SECTION 12. RELIANCE 27 months of the date on which the IRS and therefore is not exempt under § 501(a) terminated the group exemption letter to (see section 8.02(1)(b)(i) of this revenue .01 By a central or subordinate orga- receive an effective date that is the same procedure); or nization. In general, a central organization as the date of termination of the group ex- (2) Was not eligible for initial inclusion and its subordinate organizations may rely emption letter. An organization that files in or subsequent addition to a group ex- on a group exemption letter that continues an application more than 27 months after emption letter because it is an organiza- to meet the requirements of this revenue termination of the group exemption letter tion described in section 3.04(1) (foreign procedure (except as provided in section will be recognized from the postmark date organization), section 3.04(2) (private 14.02(2) of this revenue procedure, which of its application, provided that it other- foundation), section 3.04(3) (Type III sup- provides a transition period for preexist- wise meets the requirement for tax-ex- porting organization), or section 3.04(4) ing group exemption letters). However,

May 18, 2020 856 Bulletin No. 2020–21 see section 11.02 of Rev. Proc. 2020-5 (or nue procedure is published in the Internal Therefore, the first time after the effective its successor) regarding limitations on re- Revenue Bulletin (transition period): date of this revenue procedure (see section liance. (i) Section 3.01(2) of this revenue pro- 16 of this revenue procedure) that a central .02 By grantors and contributors. To cedure (requiring a central organization to organization adds any new subordinate or- verify that contributions to a subordinate have at least one subordinate organization ganizations to a preexisting group exemp- organization are deductible under § 170, a to maintain a group exemption letter). tion letter, such central organization must donor should consult the central organiza- (ii) Section 3.01(3) of this revenue pro- provide the information required by sec- tion’s listing in Tax Exempt Organization cedure (permitting central organizations tion 5.03 of this revenue procedure about Search (Pub. 78 Data), which will indicate to hold only one group exemption letter). its new subordinate organizations. Upon that contributions to its subordinate orga- (b) Minimum number of subordinate the second, and any subsequent, addition nizations are also deductible. Section 3.02 organizations. If a central organization of new subordinate organizations to the of Rev. Proc. 2018-32, 2018-23 I.R.B. has a preexisting group exemption letter preexisting group exemption letter, such 739. The donor should then confirm that but does not have at least one subordi- central organization must provide only the the subordinate organization is covered by nate organization, the central organization information required by section 6.02(3) of the group exemption letter by contacting must add, during the transition period, this revenue procedure. the central organization. See generally at least one subordinate organization to (4) Preexisting subordinate organiza- section 6.03 of Rev. Proc. 2018-32. Do- its group exemption letter (see sections tions. (a) In general. Except as provided nors may rely on the central organization’s 6.02(2)(a)(iii) and 6.02(3) of this revenue in sections 14.02(4)(b) and 14.02(4)(c) of written verification with respect to deduct- procedure regarding information that must this revenue procedure, the requirements ibility of contributions to one or more sub- be submitted to the IRS) or notify the IRS of this revenue procedure apply to preex- ordinate organizations included in a group of its intent to terminate the group ex- isting subordinate organizations. exemption letter. emption letter (see section 6.02(5) of this (b) Certain sections not applicable. revenue procedure). The central organiza- The following sections of this revenue SECTION 13. DISCLOSURE OF tion may submit this information with its procedure do not apply to preexisting sub- GROUP EXEMPTION LETTER SGRI if its SGRI is due before the end of ordinate organizations: REQUESTS AND GROUP the transition period. (i) Sections 3.02(3), 3.02(4), and EXEMPTION LETTERS (c) More than one group exemption let- 3.02(5) of this revenue procedure (defin- ter. During the transition period, a central ing, and describing the applicability of, A group exemption letter, the request organization that maintains more than one the terms “general supervision” and “con- for that group exemption letter, and any preexisting group exemption letter must trol”). supporting documents included with that terminate all but one of its preexisting (ii) Sections 3.03(2)(a)(ii), 3.02(2)(b), request are open to public inspection un- group exemption letters. The central or- 3.02(2)(c), and 3.03(2)(d) of this revenue der § 6104(a) and (d). See § 301.6104(a)- ganization must determine which preex- procedure (describing the matching, foun- 1(a) & (e)(3); § 301.6104(d)-1(f)(1). See isting group exemption letter it intends to dation classification, similar purpose, and Rev. Proc. 2020-5 (or its successor) for maintain and notify the IRS of its intent to uniform governing instrument require- rules regarding the disclosure of applica- terminate any additional preexisting group ments). tions and determination letters. exemption letters (see section 6.02(5) (re- (iii) Section 3.04(3) of this revenue garding notification of intent to terminate) procedure (stating that Type III support- SECTION 14. APPLICABILITY of this revenue procedure). ing organizations are not permitted to be (3) New subordinate organizations. (a) subordinate organizations). .01 New group exemption letters. This In general. This revenue procedure ap- (iv) Section 3.05(2) of this revenue revenue procedure applies to all group plies to all new subordinate organizations; procedure (requiring that the authorization exemption letters requested and issued no transition period is provided. for initial inclusion in or subsequent addi- after the date the final revenue procedure (b) Information required the first time tion to a group exemption letter described is published in the Internal Revenue Bul- new subordinate organizations are added in section 3.05(1) of this revenue proce- letin. to a preexisting group exemption letter. dure permit the central organization to .02 Preexisting group exemption let- In the case of a central organization with remove the subordinate organization from ters. (1) In general. Except as otherwise a preexisting group exemption letter, the the group exemption letter if the subordi- provided in this section 14.02, this reve- information the central organization was nate organization fails to comply with the nue procedure applies to all preexisting required to submit about its subordinate requirements of this revenue procedure). group exemption letters. organizations under previous revenue pro- (c) Requirements for preexisting subor- (2) Certain sections applicable to pre- cedures was different than the information dinate organizations. Preexisting subordi- existing group exemption letters after a required by this revenue procedure. How- nate organizations— transition period. (a) In general. The fol- ever, this revenue procedure applies to all (i) Must all be described in the same lowing sections of this revenue procedure new subordinate organizations of a preex- paragraph of § 501(c), though not neces- apply to preexisting group exemption let- isting group exemption letter (see section sarily the same paragraph as the central ters one year after the date the final reve- 14.02(3)(a) of this revenue procedure). organization;

Bulletin No. 2020–21 857 May 18, 2020 (ii) If described in § 501(c)(3), may be tion letter for subordinate organizations subordinate organizations that are de- classified in any paragraph of § 509 (in- described in § 501(c)(4), as was permitted scribed in § 501(c)(3) to its preexisting cluding § 509(a)(3)); by Rev. Proc. 80-27. The central organi- group exemption letter because it satisfies (iii) May have different primary pur- zation may continue to maintain the pre- the matching requirements – all of the poses; and existing group exemption letter because subordinate organizations are described (iv) May have unique (as opposed to the central organization’s preexisting sub- in the same paragraph of § 501(c) (see “uniform”) governing instruments (char- ordinate organizations are not required sections 3.03(2)(a)(i) and 14.02(3)(a) of ters, trust indentures, articles of associa- to be described in the same paragraph of this revenue procedure) and the central tion, etc.). § 501(c) as the central organization (see organization and all of its new subordi- (d) Preexisting subordinate organiza- section 14.02(4)(c)(i) of this revenue pro- nate organizations are described in the tions described in different paragraphs of cedure). However, the central organization same paragraph of § 501(c) (see sections § 501(c). If a preexisting group exemption may not add any new subordinate organi- 3.03(2)(a)(ii) and 14.02(3)(a) of this reve- letter includes preexisting subordinate zations because, in this case, the addition nue procedure). Nonetheless, if the central organizations that are described in dif- of new subordinate organizations would organization adds new subordinate organi- ferent paragraphs of § 501(c), the central violate the matching requirements. In par- zations described in § 501(c)(3) to the pre- organization must remove the preexisting ticular, if the central organization added existing group exemption letter, the new subordinate organizations described in the new subordinate organizations described subordinate organizations must have the paragraph of § 501(c) different from the in § 501(c)(3), the central organization same foundation classification, although paragraph in which the central organiza- would satisfy the requirement that new not necessarily the same foundation clas- tion stated that the subordinate organiza- subordinate organizations be described sification as the central organization (see tions would be described in its group ex- in the same paragraph of § 501(c) as the sections 3.03(2)(b) and 14.02(3)(a) of this emption letter request (see section 4.02(3) central organization (see sections 3.03(2) revenue procedure). of Rev. Proc. 80-27) during the transition (a)(ii) and 14.02(3)(a) of this revenue pro- (3) Two preexisting group exemption period. For example, if a central organi- cedure) but would violate the requirement letters for subordinate organizations zation has a preexisting group exemption that all subordinate organizations be de- described in different paragraphs of letter for subordinate organizations de- scribed in the same paragraph of § 501(c) § 501(c). A central organization described scribed in § 501(c)(3), but has subordinate (see sections 3.03(2)(a)(i) and 14.02(3) in § 501(c)(3) has two preexisting group organizations described in both § 501(c) (a), of this revenue procedure) because exemption letters – one for subordinate (3) and 501(c)(4), the central organization the central organization would have sub- organizations described in § 501(c)(3) must remove the subordinate organiza- ordinate organizations described both and one for subordinate organizations tions described in § 501(c)(4) (see section section § 501(c)(3) and (4). If the central described in § 501(c)(4) – which was not 6.02(2)(a)(ii) of this revenue procedure organization added new subordinate or- prohibited by Rev. Proc. 80-27. The cen- regarding subordinate organizations no ganizations described in § 501(c)(4), the tral organization may only keep one pre- longer to be included in a group exemp- central organization would satisfy the re- existing group exemption letter because tion letter). quirement that all subordinate organiza- this revenue procedure does not permit (e) General supervision or control. The tions be described in the same paragraph a central organization to maintain more definitions of “general supervision” and of § 501(c) (see sections 3.03(2)(a)(i) and than one group exemption letter (see sec- “control” in sections 3.02(3) and 3.02(4) 14.02(3)(a) of this revenue procedure) but tions 3.01(3) and 14.02(1) of this revenue of this revenue procedure do not apply would violate the requirement that all new procedure). However, this requirement to preexisting subordinate organizations. subordinate organizations be described does not apply until after the transition Nonetheless, a central organization that in the same paragraph of § 501(c) as the period (see section 14.02(2)(a)(ii) of this meets the requirements of section 3.02(3) central organization (see sections 3.03(2) revenue procedure). During the transition or section 3.02(4) of this revenue proce- (a)(ii) and 14.02(3)(a) of this revenue pro- period, the central organization must de- dure with respect to a particular preexist- cedure). termine which preexisting group exemp- ing subordinate organization per se exer- (2) One preexisting group exemption tion letter it intends to keep and notify the cises “general supervision” or “control,” letter for subordinate organizations de- IRS regarding which preexisting group as applicable, over that preexisting subor- scribed in the same paragraph of § 501(c) exemption letter it intends to terminate dinate organization. as the central organization. A central or- (see section 14.02(2)(c) of this revenue .03 Examples. The application of this ganization described in § 501(c)(3) has a procedure). Like Example 1, if the cen- section 14 is illustrated by the following single preexisting group exemption letter tral organization chooses to maintain the examples. for subordinate organizations described group exemption letter for subordinate or- (1) One preexisting group exemp- in § 501(c)(3). The preexisting subor- ganizations described in § 501(c)(4), the tion letter for subordinate organizations dinate organizations (none are private central organization may not add any new described in a different paragraph of foundations) all have different founda- subordinate organizations. Like Example § 501(c) than the central organization. A tion classifications under § 509(a), which 2, if the central organization chooses to central organization described in § 501(c) was not prohibited by Rev. Proc. 80-27. maintain the group exemption letter for (3) has a single preexisting group exemp- The central organization may add new subordinate organizations described in

May 18, 2020 858 Bulletin No. 2020–21 § 501(c)(3), the central organization may ing group exemption letter (see section 26 CFR 601.201: Rulings and determination letters add new subordinate organizations but the 14.02(2)(c) of this revenue procedure). If new subordinate organizations must have the central organization adds a subordi- Rev. Proc. 2020-29 the same foundation classification as each nate organization to the preexisting group other, although not necessarily the same exemption letter, the central organization SECTION 1. PURPOSE as the central organization. Either way, a must submit the information described in subordinate organization that is removed section 14.02(3)(b) of this revenue proce- This revenue procedure modifies from the group exemption letter may dure. Even though the group exemption the procedures in Rev. Proc. 2020‑1, maintain its exempt status by taking an letter is a preexisting group exemption 2020‑1 I.R.B. 1 (Jan. 2, 2020), tempo- action in section 9.04(2) or section 9.04(3) letter, after the transition period, this rev- rarily to allow for the electronic submis- of this revenue procedure (see section enue procedure will apply to the preexist- sion of requests for letter rulings, closing 9.02 of this revenue procedure regarding ing group exemption letter as if it is a new agreements, determination letters, and in- the effect of termination). group exemption letter described in sec- formation letters under the jurisdiction of (4) Central organization that is not de- tion 14.01 of this section because there are the Internal Revenue Service (IRS) Office scribed in § 501(c) with two preexisting no preexisting subordinate organizations. of Chief Counsel, and for determination group exemption letters for subordinate (6) One preexisting group exemp- letters issued by the IRS Large Business organizations described in different para- tion letter with subordinate organiza- and International Division (LB&I). Un- graphs of § 501(c). Assume the same facts tions described in different paragraphs til this revenue procedure is modified or as Example 3 except that the central or- of § 501(c). A central organization de- superseded, both paper and electronic re- ganization is an agency of a political sub- scribed in § 501(c)(3) has a preexisting quests for advice described in section 2.01 division and is not described in § 501(c). group exemption letter with subordinates of this revenue procedure provided by As- Like Example 3, the central organization described in § 501(c)(3) and (4). Nei- sociate Chief Counsel Offices and LB&I, may only keep one group exemption letter ther Rev. Proc. 80-27 nor this revenue as defined in section 2.02 of this revenue (see sections 3.01(3) and 14.02(1) of this procedure permit a central organization procedure, will be accepted. revenue procedure). However, unlike Ex- to maintain a group exemption letter for ample 3, the central organization may add subordinate organizations described in SECTION 2. BACKGROUND new subordinate organizations to which- different paragraphs of § 501(c). Assum- ever preexisting group exemption letter it ing that the group exemption letter was .01 Revenue Procedure 2020-1 pro- chooses to maintain because the matching intended for subordinate organizations vides detailed information on how tax- requirement described in section 3.03(2) described in § 501(c)(3), the central or- payers can request advice from the IRS (a)(ii) of this revenue procedure does not ganization must remove the subordinate in the form of letter rulings (including apply to a central organization that is an organizations described in § 501(c)(4) non-automatic requests for changes in instrumentality or an agency of a political by submitting the information required methods of accounting and non-auto- subdivision and that is not described in by section 6.02(2)(a)(ii) of this revenue matic requests for changes in accounting § 501(c) (see section 3.03(2)(a)(iii) of this procedure. A subordinate organization periods), closing agreements, determina- revenue procedure). described in § 501(c)(4) that is removed tion letters, and information letters (to- (5) One preexisting group exemption from the group exemption letter either gether, requests for advice). Rev. Proc. letter with no subordinate organizations. A may obtain recognition of or declare its 2020-1 generally requires taxpayers to central organization described in § 501(c) exempt status by taking an action in sec- submit paper copies of written materials (3) has a single preexisting group exemp- tion 9.04(3) of this revenue procedure with wet signatures. tion letter for subordinate organizations (see section 9.02 of this revenue proce- .02 For purposes of this revenue pro- described in § 501(c)(3) but currently does dure regarding the effect of termination). cedure, the term “Associate Chief Coun- not have any subordinate organizations. sel Offices and LB&I” collectively refers Under this revenue procedure, a central SECTION 15. EFFECT ON OTHER to the following Associate Chief Counsel organization must have at least one sub- REVENUE PROCEDURES offices and LB&I: the Associate Chief ordinate organization to maintain a group Counsel (Corporate), the Associate Chief exemption letter (see section 3.01(2) of Rev. Proc. 80-27 (as modified by Rev. Counsel (Financial Institutions and Prod- this revenue procedure). However, this Proc. 96-40) is modified and superseded. ucts), the Associate Chief Counsel (In- requirement does not apply to preexisting come Tax and Accounting), the Associate group exemption letters during the transi- SECTION 16. EFFECTIVE DATE Chief Counsel (International), the Associ- tion period (see section 14.02(2)(a)(i) of ate Chief Counsel (Passthroughs and Spe- this section). During the transition period, This revenue procedure is effective on cial Industries), the Associate Chief Coun- the central organization either must add and after the date the final revenue proce- sel (Procedure and Administration), and at least one subordinate organization de- dure is published in the Internal Revenue the Associate Chief Counsel (Employee scribed in § 501(c)(3) to the preexisting Bulletin. Benefits, Exempt Organizations, and Em- group exemption letter or must notify the ployment Taxes). IRS of its intent to terminate the preexist-

Bulletin No. 2020–21 859 May 18, 2020 SECTION 3. OPTIONS FOR The secure electronic facsimile line for (1) Compression utilities will request SUBMISSION OF REQUESTS FOR submitting determination letter requests that the sender/ taxpayer create a password ADVICE under the jurisdiction of LB&I is (844) for the recipient/ IRS to use to decrypt the 249-6231. To use the secure electron- attachments. The password should never .01 Scope. This revenue procedure ic facsimile method, first submit the full be sent in the same email with the encrypt- modifies Rev. Proc. 2020-1 to permit the user fee payment set forth in Appendix A ed attachment. Instead, it should be pro- electronic submission of requests for ad- of Rev. Proc. 2020-1 through www.pay. vided to the IRS in a separate email with a vice from the Associate Chief Counsel Of- gov. The request package must include a subject line that makes it easy to connect fices and LB&I. This revenue procedure copy of the receipt that is generated on the password to the encrypted email. does not modify procedures for determi- the last page of www.pay.gov with the (2) The package for a request transmit- nation letters issued by the IRS’s Small completed form, a cover sheet, and the ted through email must include electronic Business/Self Employed Division, Wage materials specified in Rev. Proc. 2020-1, images of the Acknowledgement of Risks and Investment Division, or Tax Exempt as modified by this revenue procedure. of Email (see Attachment A to this reve- and Government Entities Division. Those Provide clear titles for the documents and nue procedure) signed by the taxpayer or procedures are outlined in sections 7 and distinguish files containing administrative officer of the taxpayer (note this requires 12 of Rev. Proc. 2020-1, in Rev. Proc. forms and receipts from files that contain the signature of the taxpayer, not the rep- 2020‑4, 2020-1 I.R.B. 148 (Jan. 2, 2020), the request itself and from supplemen- resentative), the receipt that is generated and in Rev. Proc. 2020-5, 2020-1 I.R.B. tal materials. Transmit the full package, on the last page of www.pay.gov, and all 241 (Jan. 2, 2020). along with a cover sheet, to the IRS at materials specified in Rev. Proc. 2020-1, .02 Option for electronic submission. the number indicated above for the office as modified by this revenue procedure. The IRS will accept electronic submis- with jurisdiction over the request. If the Provide clear titles for the documents and sions for requests for advice made for submission is over 10 MB or over 50 pag- distinguish files containing administrative matters under the jurisdiction of Associate es, break it into smaller components and forms and receipts from files containing Chief Counsel Offices and LB&I if the number the components sequentially with the request itself and from supplemental submissions are — the total number, such as 1 of 4, 2 of 4, 3 materials. Enable the compression and en- (1) Transmitted by facsimile or com- of 4, and 4 of 4. cryption utility on the email system before pressed and encrypted email attachments .02 Submission by compressed and generating the email. If a submission is using the electronic submission proce- encrypted email attachments. There are over 5 MB, break it into smaller compo- dures described in section 4 of this reve- more risks associated with compressed nents that do not exceed 5 MB each, and nue procedure, and encrypted email attachments than number the components sequentially with (2) Signed using the electronic signa- with electronic facsimile, such as the pos- the total number, such as 1 of 4, 2 of 4, ture procedures described in section 5 of sibility that sensitive taxpayer informa- 3 of 4, and 4 of 4. The email address for this revenue procedure. tion could be intercepted. Accordingly, requests that fall under the jurisdiction of .03 Option for paper submission. The the IRS encourages taxpayers and their any of the Associate Chief Counsel offic- IRS will also continue to accept requests representatives to use a secure electronic es is: [email protected]. The for advice as provided in Rev. Proc. 2020- facsimile service for transmitting requests email address for determination letter re- 1, although the IRS expects to have limit- for advice. As an alternative, this section quests that fall under the jurisdiction of ed personnel available, which will likely 4.02 provides procedures for using com- LB&I is: [email protected]. delay for some period of time the pro- pressed and encrypted email attachments .03 Submission of copies and originals. cessing of requests that are submitted in for transmitting a request for advice un- Taxpayers and their representatives do not paper copies through the mail and private der the jurisdiction of any of the Associ- need to submit multiple copies of docu- delivery services. Electronic submission ate Chief Counsel Offices and LB&I. The ments when submitting them electroni- in accordance with this revenue procedure compression and encryption utility used cally. Where Rev. Proc. 2020-1 requires will allow for more expeditious process- must be compatible with SecureZIP and original forms or documents, submissions ing than paper submission. allow the password-enabled encryption made under the provisions of this revenue of email attachments and other files. Both procedure will be sufficient. SECTION 4. ELECTRONIC the sender and recipient must have the de- .04 Submission of additional informa- SUBMISSION PROCEDURES compression/ decryption utility installed. tion and signed consent agreements. Any To compress and encrypt email attach- additional information required for a rul- .01 Submission by electronic facsim- ments, follow the directions provided by ing and signed consent agreements may ile. Taxpayers and their representatives the program. Because these programs do be submitted under the procedures set are encouraged to use a secure electronic not encrypt the subject line, the body of forth in this revenue procedure, but should facsimile service for transmitting requests the email, or the file name of the attach- be directed to the secure facsimile number for advice. The secure electronic fac- ment, all taxpayer information, including or email address provided by the office as- simile line for submitting requests under the name of the taxpayer, and return in- signed to the request. the jurisdiction of any of the Associate formation should be included only in the .05 Electronic submission after paper Chief Counsel Offices is (877) 773-4950. encrypted attachment. submission. Taxpayers who filed a paper re-

May 18, 2020 860 Bulletin No. 2020–21 quest and who have not received confirma- .03 The IRS will accept digital signa- SECTION 7. EFFECT ON OTHER tion that it has been received and processed tures that use encryption techniques to DOCUMENTS may wish to make an electronic submission provide proof of original and unmodified to ensure faster processing. If a duplicate documentation in one of the following Rev. Proc. 2020-1 is modified. request is submitted electronically, please formats: tiff, jpg, jpeg, pdf, Microsoft Of- indicate on the request that it is a duplicate fice suite, or Zip. SECTION 8. EFFECTIVE DATE submission of a paper submission. SECTION 6. CONFERENCES AND This revenue procedure is effective SECTION 5. ELECTRONIC ISSUANCE OF ADVICE April 30, 2020, until modified or super- SIGNATURE PROCEDURES seded. .01 Conferences. Conferences will be .01 This revenue procedure modifies conducted by telephone in the manner SECTION 9. DRAFTING Rev. Proc. 2020-01 to allow electronic provided in and subject to the require- INFORMATION signatures to be submitted when wet sig- ments of Rev. Proc. 2020-1. natures previously were required. This .02 Issuance of advice. The IRS has the The principal author of this revenue modification applies to both paper and discretion to determine the form in which procedure is Teresa Dondlinger Trissell electronic submissions. it will issue advice to the taxpayer, includ- of the Office of Associate Chief Counsel .02 The IRS will accept the following ing transmittal by facsimile or email. The (Procedure & Administration). For further images of signatures (scanned or photo- IRS generally will follow established pro- information regarding this revenue pro- graphed) in one of the following formats: cedures for sending email if compressed cedure, contact Ms. Trissell at (202) 317- tiff, jpg, jpeg, pdf, Microsoft Office suite, and encrypted emails attachments will be 3400 (not a toll-free number). or Zip. used to correspond with the taxpayer.

Bulletin No. 2020–21 861 May 18, 2020 Attachment A

Acknowledgement of Risk with Email

I acknowledge that there are risks associated with email, such as the possibility that sensitive taxpayer information could be inter- cepted and viewed by unauthorized persons. I understand the importance of securing email using appropriate encryption, particularly when transmitting sensitive or confidential tax-related information. I understand that SecureZIP and compatible utilities only encrypt the email attachment and not the subject line or the body of the email itself, and that confidential information should not be included in the subject line, the body of the email itself, or the file name of the attachment. By signing this agreement, I understand that sensi- tive or confidential information should be sent only by compressed and encrypted email attachments in communicating with the IRS. Even with encryption it is possible electronic communications could be intercepted. I acknowledge that the United States Govern- ment does not guarantee the security of data transmitted electronically by email and accepts no liability, regardless of fault, for any loss or damage sustained without negligence of United States Government employees.

(Name of Taxpayer) (Title of Individual Signing Acknowledgment)

*SIGNATURE: ______

DATE: ______

*Signature must be from any person who could sign the return of the taxpayer, not a representative. If the taxpayer is a corporation, the signature must be from an officer of the corporation.

May 18, 2020 862 Bulletin No. 2020–21 Definition of Terms Revenue rulings and revenue procedures new ruling holds that it applies to both A new ruling does more than restate the sub- (hereinafter referred to as “rulings”) that and B, the prior ruling is modified because stance of a prior ruling, a combination of have an effect on previous rulings use the it corrects a published position. (Compare terms is used. For example, modified and following defined terms to describe the with amplified and clarified, above). superseded describes a situation where the ­effect: Obsoleted describes a previously pub- substance of a previously published ruling Amplified describes a situation where lished ruling that is not considered deter- is being changed in part and is continued no change is being made in a prior pub- minative with respect to future transactions. without change in part and it is desired to lished position, but the prior position is This term is most commonly used in a ruling restate the valid portion of the previous- being extended to apply to a variation of that lists previously published rulings that ly published ruling in a new ruling that is the fact situation set forth therein. Thus, if are obsoleted because of changes in laws or self contained. In this case, the previously an earlier ruling held that a principle ap- regulations. A ruling may also be obsoleted published ruling is first modified and then, plied to A, and the new ruling holds that because the substance has been included in as modified, is superseded. the same principle also applies to B, the regulations subsequently adopted. Supplemented is used in situations in earlier ruling is amplified. (Compare with Revoked describes situations where the which a list, such as a list of the names of modified, below). position in the previously published ruling countries, is published in a ruling and that Clarified is used in those instances is not correct and the correct position is list is expanded by adding further names where the language in a prior ruling is be- being stated in a new ruling. in subsequent rulings. After the original ing made clear because the language has Superseded describes a situation where ruling has been supplemented several caused, or may cause, some confusion. It the new ruling does nothing more than times, a new ruling may be published that is not used where a position in a prior rul- restate the substance and situation of a includes the list in the original ruling and ing is being changed. previously published ruling (or rulings). the additions, and supersedes all prior rul- Distinguished describes a situation Thus, the term is used to republish under ings in the series. where a ruling mentions a previously pub- the 1986 Code and regulations the same Suspended is used in rare situations to lished ruling and points out an essential position published under the 1939 Code show that the previous published rulings difference between them. and regulations. The term is also used will not be applied pending some future Modified is used where the substance when it is desired to republish in a single action such as the issuance of new or of a previously published position is being ruling a series of situations, names, etc., amended regulations, the outcome of cas- changed. Thus, if a prior ruling held that a that were previously published over a es in litigation, or the outcome of a Ser- principle applied to A but not to B, and the period of time in separate rulings. If the vice study. Abbreviations The following abbreviations in current use ERISA—Employee Retirement Income Security Act. PTE—Prohibited Transaction Exemption. and formerly used will appear in material EX—Executor. Pub. L.—Public Law. F—Fiduciary. REIT—Real Estate Investment Trust. published in the Bulletin. FC—Foreign Country. Rev. Proc.—Revenue Procedure. A—Individual. FICA—Federal Insurance Contributions Act. Rev. Rul.—Revenue Ruling. Acq.—Acquiescence. FISC—Foreign International Sales Company. S—Subsidiary. B—Individual. FPH—Foreign Personal Holding Company. S.P.R.—Statement of Procedural Rules. BE—Beneficiary. F.R.—Federal Register. Stat.—Statutes at Large. BK—Bank. FUTA—Federal Unemployment Tax Act. T—Target Corporation. B.T.A.—Board of Tax Appeals. FX—Foreign corporation. T.C.—Tax Court. C—Individual. G.C.M.—Chief Counsel’s Memorandum. T.D.—Treasury Decision. C.B.—Cumulative Bulletin. GE—Grantee. TFE—Transferee. CFR—Code of Federal Regulations. GP—General Partner. TFR—Transferor. CI—City. GR—Grantor. T.I.R.—Technical Information Release. COOP—Cooperative. IC—Insurance Company. TP—Taxpayer. Ct.D.—Court Decision. I.R.B.—Internal Revenue Bulletin. TR—Trust. CY—County. LE—Lessee. TT—Trustee. D—Decedent. LP—Limited Partner. U.S.C.—United States Code. DC—Dummy Corporation. LR—Lessor. X—Corporation. DE—Donee. M—Minor. Y—Corporation. Del. Order—Delegation Order. Nonacq.—Nonacquiescence. Z—Corporation. DISC—Domestic International Sales Corporation. O—Organization. DR—Donor. P—Parent Corporation. E—Estate. PHC—Personal Holding Company. EE—Employee. PO—Possession of the U.S. E.O.—Executive Order. PR—Partner. ER—Employer. PRS—Partnership.

Bulletin No. 2020–21 i May 18, 2020 Numerical Finding List1 REG-106013-19, 2020-18 I.R.B. 757 REG-117138-17, 2020-19 I.R.B. 796 Bulletin 2020–21 REG-106864-18, 2020-20 I.R.B. 805

AOD: Revenue Procedures:

2020-1, 2020-12 I.R.B. 521 2020-1, 2020-01 I.R.B. 1 2020-2, 2020-14 I.R.B. 558 2020-2, 2020-01 I.R.B. 107 2020-3, 2020-17 I.R.B. 663 2020-3, 2020-01 I.R.B. 131 2020-4, 2020-01 I.R.B. 148 Announcements: 2020-5, 2020-01 I.R.B. 241 2020-7, 2020-01 I.R.B. 281 2020-1, 2020-5 I.R.B. 552 2020-9, 2020-02 I.R.B. 294 2020-2, 2020-15 I.R.B. 609 2020-10, 2020-02 I.R.B. 295 2020-3, 2020-15 I.R.B. 655 2020-11, 2020-06 I.R.B. 406 2020-4, 2020-17 I.R.B. 667 2020-8, 2020-08 I.R.B. 447 2020-5, 2020-19 I.R.B. 796 2020-12, 2020-11 I.R.B. 511 2020-13, 2020-11 I.R.B. 515 Notices: 2020-17, 2020-12 I.R.B. 539 2020-18, 2020-15 I.R.B. 592 2020-1, 2020-2 I.R.B. 290 2020-14, 2020-16 I.R.B. 661 2020-2, 2020-3 I.R.B. 327 2020-22, 2020-18 I.R.B. 745 2020-3, 2020-3 I.R.B. 330 2020-23, 2020-18 I.R.B. 749 2020-4, 2020-4 I.R.B. 380 2020-24, 2020-18 I.R.B. 750 2020-5, 2020-4 I.R.B. 380 2020-26, 2020-18 I.R.B. 753 2020-6, 2020-7 I.R.B. 411 2020-25, 2020-19 I.R.B. 785 2020-7, 2020-7 I.R.B. 411 2020-28, 2020-19 I.R.B. 792 2020-8, 2020-7 I.R.B. 415 2020-20, 2020-20 I.R.B. 801 2020-9, 2020-7 I.R.B. 417 2020-27, 2020-20 I.R.B. 803 2020-10, 2020-10 I.R.B. 456 2020-29, 2020-21 I.R.B. 859 2020-11, 2020-11 I.R.B. 492 2020-12, 2020-11 I.R.B. 495 Revenue Rulings: 2020-13, 2020-11 I.R.B. 502 2020-14, 2020-13 I.R.B. 555 2020-1, 2020-3 I.R.B. 296 2020-15, 2020-14 I.R.B. 559 2020-2, 2020-3 I.R.B. 298 2020-16, 2020-14 I.R.B. 559 2020-3, 2020-3 I.R.B. 409 2020-17, 2020-15 I.R.B. 590 2020-4, 2020-4 I.R.B. 444 2020-18, 2020-15 I.R.B. 590 2020-5, 2020-5 I.R.B. 454 2020-19, 2020-15 I.R.B. 591 2020-6, 2020-11 I.R.B. 490 2020-20, 2020-16 I.R.B. 660 2020-7, 2020-12 I.R.B. 522 2020-21, 2020-16 I.R.B. 660 2020-9, 2020-15 I.R.B. 563 2020-22, 2020-17 I.R.B. 664 2020-10, 2020-15 I.R.B. 565 2020-23, 2020-18 I.R.B. 742 2020-8, 2020-19 I.R.B. 775 2020-26, 2020-18 I.R.B. 744 2020-11, 2020-19 I.R.B. 776 2020-27, 2020-19 I.R.B. 778 2020-28, 2020-19 I.R.B. 781 Treasury Decisions: 2020-30, 2020-19 I.R.B. 781 2020-31, 2020-19 I.R.B. 783 9886, 2020-2 I.R.B. 285 2020-32, 2020-21 I.R.B. 837 9887, 2020-3 I.R.B. 302 2020-34, 2020-21 I.R.B. 838 9888, 2020-3 I.R.B. 306 2020-36, 2020-21 I.R.B. 840 9891, 2020-8 I.R.B. 419 9892, 2020-8 I.R.B. 439 Proposed Regulations: 9893, 2020-9 I.R.B. 449 9895, 2020-15 I.R.B. 565 REG-107431-19, 2020-3 I.R.B. 332 9896, 2020-18 I.R.B. 681 REG-122180-18, 2020-3 I.R.B. 342 REG-100956-19, 2020-4 I.R.B. 383 REG-125710-18, 2020-5 I.R.B. 554 REG-132741-17, 2020-10 I.R.B. 458 REG-100814-19, 2020-12 I.R.B. 542 REG-132529-17, 2020-12 I.R.B. 667

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin 2018–52, dated December 27, 2018.

May 18, 2020 ii Bulletin No. 2020–21 Finding List of Current Actions on Previously Published Items1

Bulletin 2020–21

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin 2018–52, dated December 27, 2018.

Bulletin No. 2020–21 iii May 18, 2020 Internal Revenue Service Washington, DC 20224

Official Business Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletins are available at www.irs.gov/irb/.

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