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Advance Rulings - Publicly Supported Organizations

Note:  This article describes the advance ruling process formerly in place for publicly supported charitable organizations.

Many new organizations cannot show they qualify as normally publicly supported as described in sections 509(a)(1) and 170(b)(1)(A)(vi) of the Internal Revenue Code because they have not been in existence long enough.

However, a new organization may qualify for an advance ruling that states it will be treated as a publicly supported organization during an advance ruling period. This advance ruling period will be long enough to enable it to develop an adequate support history to base an initial determination as to foundation status.

At the end of the advance ruling period, the organization must show it met the public support test during the advance ruling period. Otherwise, the organization will be reclassified as a private foundation.

Generally, an organization that would qualify for an advance ruling can show its organizational structure, proposed programs and activities, and intended method of operation are likely to attract the type of broadly based support from the general public, public charities and governmental units necessary to meet the public support requirements.



Five-Year Advance Ruling Period
A new organization may request an advance ruling that it will be treated as a publicly supported organization for its first five tax years. The request must be accompanied by a consent to extend the statute of limitations on assessment which, in effect, states the organization will be subject to the tax on net investment income if it fails to qualify as an organization excluded as a private foundation during the five-year advance ruling period. The organization's first tax year, regardless of length, will count as the first year in the five-year period. The advance ruling period will end on the last day of the organization's fifth tax year.


Return to Life Cycle of a Public Charity

Additional information

On-line minicourse - Foundation Classification

Page Last Reviewed or Updated: 10-May-2013