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Applying for Exemption/Misc. Determination: Sample Questions

Foundation Classification

Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic.

Requested 170(b)(1)(A)(vi) Appears to Meet 509(a)(2) 

1. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Sections 509(a)(1) and 170(b)(1)(A)(vi). This classification is available only to organizations that receive a substantial part of their financial support in the form of contributions from publicly supported organizations, governmental units, or the general public.  

Based on the financial information you submitted, you receive more than one-third of your support from contributions, membership fees, and gross receipts from activities related to your exempt purposes, which indicates that you should be classified as a public charity under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you agree to be classified under Section 509(a)(2), please submit a written statement indicating your agreement.
  • If you do not agree to be classified under Section 509(a)(2), please submit a detailed description of how you meet the requirements for classification under Sections 509(a)(1) and 170(b)(1)(A)(vi). We will consider your submission before making a final determination about your classification.  

Requested 509(a)(3) Appears to Meet 170(b)(1)(A)(vi)

2. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Section 509(a)(3) as a supporting organization.  

Based on the financial information you submitted, you receive a substantial part of your financial support in the form of contributions from publicly supported organizations, governmental units, or the general public, which indicates that you should be classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi). You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you agree to be classified under Sections 509(a)(1) and 170(b)(1)(A)(vi), please submit a written statement indicating your agreement.
  • If you do not agree to be classified under Sections 509(a)(1) and 170(b)(1)(A)(vi), please submit a detailed description of how you meet the requirements for classification under Section 509(a)(3). We will consider your submission before making a final determination about your classification.

Requested 509(a)(3) Appears to Meet 509(a)(2)

3. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Section 509(a)(3) as a supporting organization.  

Based on the financial information you submitted, you receive more than one-third of your support from contributions, membership fees, and gross receipts from activities related to your exempt purposes, which indicates that you should be classified as a public charity under Section 509(a)(2). Also, Section 509(a)(3) organizations are subject to additional taxes and restrictions under Chapter 42. You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you agree to be classified under Section 509(a)(2), please provide a written statement indicating your agreement.
  • If you do not agree to be classified under Section 509(a)(2), please submit a detailed description of how you meet the requirements for classification under Section 509(a)(3). We will consider your submission before making a final determination about your classification.  

Requested 170(b)(1)(A)(i) (Church) Appears to Meet 170(b)(1)(A)(vi) or 509(a)(2)

4. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification as a church under Sections 509(a)(1) and 170(b)(1)(A)(i).  

Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification.
  • If you want to pursue classification as a church, please provide a detailed description of how you meet the requirements of a church under Sections 509(a)(1) and 170(b)(1)(A)(i). You must also complete and submit Schedule A to Form 1023, if you have not already done so. In the alternative, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements for classification under the relevant section(s). We will consider your request before making a final determination about your classification.

Requested 170(b)(1)(A)(ii) (School) Appears to Meet 170(b)(1)(A)(vi) or 509(a)(2) 

5. It appears you should be classified as a public charity under a provision of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification as a school under Sections 509(a)(1) and 170(b)(1)(A)(ii).  

Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification.
  • If you want to pursue classification as a school, please provide a detailed description of how you meet the requirements of a school under Sections 509(a)(1) and 170(b)(1)(A)(ii). You must also complete and submit Schedule B to Form 1023, if you have not already done so. In the alternative, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements of the relevant section(s). We will consider your request before making a final determination about your public charity classification.

Requested 170(b)(1)(A)(iii) (Hospital) Appears to Meet 170(b)(1)(A)(vi) or 509(a)(2)

6. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification as a hospital under Sections 509(a)(1) and 170(b)(1)(A)(iii).  

Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification.
  • If you wish to pursue classification as a hospital, please provide a detailed description of how you meet or will meet the requirements of a hospital under Sections 509(a)(1) and 170(b)(1)(A)(iii). You must also complete and submit Schedule C to Form 1023, if you have not already done so. In the alternative, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements of the relevant section(s). We will consider your request before making a final determination about your public charity classification.

Requested One Public Charity Status, Appears to Meet Another (Fill in Options)

7. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Section [ ].  

Based on the information you submitted, you may be more appropriately classified as a public charity under Section [ ]. You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification.
  • If you wish to pursue classification as a public charity under the section you originally requested, please provide a detailed description of how you meet or will meet the requirements of that section. [You must also complete and submit Schedule [X] to Form 1023, if you have not already done so.] In the alternative, you can submit a statement requesting classification under Section [ ], including a detailed description of how you meet the requirements of the relevant section(s). We will consider your request before making a final determination about your public charity classification.

Requested Public Charity Appears to be Private Foundation or Private Operating Foundation

8. It appears you should be classified as a private [operating] foundation. You requested recognition of exemption under Internal Revenue Code Section 501(c)(3) with classification as a public charity under [Instruction: Insert Option A, B, or C from below.].  

Based on the information you submitted, you may not meet the requirements of your requested public charity classification and may be more appropriately described as a private [operating] foundation [under Section 4942(j)(3)]. You can find additional information about public charity classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you agree to be classified as a private [operating] foundation, please submit a written statement indicating your agreement.
  • If you do not agree to be classified as a private [operating] foundation, please submit a detailed description of your anticipated sources of receipts, such as any fundraising, grants, membership fees, or other activities, and how you meet the requirements for the public charity classification you requested in your application.  

Option A  

[Sections 509(a)(1) and 170(b)(1)(A)(vi), which applies to organizations that receive a substantial part of their financial support in the form of contributions from publicly supported organizations, governmental units, or the general public.]

Option B  

[Section 509(a)(2), which applies to organizations that receive more than one-third of their support from contributions, membership fees, and gross receipts from activities related to their exempt functions.]

Option C

[Section 509(a)(3), which applies to supporting organizations.]  

Requested Private Operating Foundation Appears to be Private Non-operating Foundation

9. It appears you should be classified as a private foundation. You requested recognition of exemption under internal Revenue Code Section 501(c)(3) with classification as a private operating foundation. Under Section 4942(j)(3), a private operating foundation must make qualifying distributions directly in furtherance of its exempt purposes. In practice, this generally means that private operating foundations engage directly in the active conduct of activities accomplishing their exempt purposes rather than passively distributing funds to individuals or organizations that accomplish those purposes.  

Based on the information you submitted, you may be more appropriately described as a private (non-operating) foundation. You can find additional information about foundation classification on our website, www.irs.gov/Charities-&-Non-Profits.

  • If you agree to be classified as a private foundation, please submit a written statement indicating your agreement.
  • If you do not agree to be classified as a private foundation, please submit a more detailed description of how you will meet the requirements of Section 4942(j)(3), including a description of your day-to-day activities.


More information:

See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.

 

Page Last Reviewed or Updated: 16-Dec-2014