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Part 25. Special Topics

Chapter 7. Exempt Organizations Business Master File

Section 6. Cumulative List (Publication 78)

25.7.6  Cumulative List (Publication 78)

25.7.6.1  (09-20-2006)
Overview

  1. The Cumulative List of organizations (CL) described in Internal Revenue Code of 1986 (IRC) 170(c), CL, commonly known as Publication 78, is a computer generated listing of names of organizations. These organizations have been determined to be entitled to receive tax deductible contributions by donors, as provided in IRC 170.

  2. The CL provides information and guidance on exempt organizations to both Service personnel and the public. With few exceptions, the CL includes only those organizations that hold a ruling or determination letter that specifically states that contributions to the organization are tax deductible.

  3. The exempt organization (EO) community has become increasingly dependent upon their listings in the CL to prove to potential contributors that contributions to them are deductible. The fact that an organization may hold a favorable determination letter is often not sufficient to satisfy some contributors, especially in those cases where the Service issued an organization’s letter many years ago.

  4. Generally, the CL program has been effective in identifying IRC 170 organizations. However, as with any computer-generated listing, it is only as good as the data extracted. Therefore, it is imperative that the EO entity data contained on the BMF be accurate. Every Service employee who issues a determination or conducts an examination of an exempt organization, is responsible for ensuring that the Master File reflects any actions taken and that any other errors identified on a Master File entity are corrected.

  5. "About This Book" on the inside cover and the "Preface" of the CL provide an explanation of the contents, format, etc., and provide procedures for inquirers to request changes. See IRM 25.7.6.2 for additional information on the CL specifications.

    1. The Government Printing Office (GPO) prints and distributes the complete CL to thousands of subscribers and IRS offices every year.

    2. Quarterly cumulative supplements to the CL are extracted in December, March, and June and contain new additions and name changes. Other changes are reflected in the complete annual reprint extracted at the end of September.

    Note:

    References to Headquarters (HQ) were formerly referred to as National Office. Business Systems Planning function, under the Commissioner (TE/GE), is located in HQ. Their symbols are SE:T:BSP.

25.7.6.1.1  (09-20-2006)
Publication 78 On-Line Procedures

  1. The CL (Publication 78) is available in a researchable database on the Internet. This database may be used for researching exempt organizations who have been granted contribution deductibility, and is available to personnel with Internet access.

  2. A user-friendly format allows for a search by the name, or portions of the name, city and/or state.

  3. The listing is accessible through the " Charities" topic of the IRS homepage (http://www.irs.gov ), and is updated quarterly.

  4. This file is also found in a downloadable format on the website.

25.7.6.2  (12-01-2002)
Cumulative List Specifications

  1. A BMF account must meet all of the following criteria to be eligible for inclusion in the CL.

  2. All entities with a Deductibility Code 1 or 4 (treaty) for subsection Codes 01, 03 04, 08, 10, 13, 19, 50, 60 or 70, which have:

    1. Cumulative List Indicator of 3 (select the entity for all supplemental CL revisions) . If the code is 0 or blank, select an entity according to other criteria.

    2. Affiliation Code of 1, 2, 3, 6 or 8 (selects group centrals and independents but eliminates subordinates).

    3. Status Code of 01, 02, 03, or 25 (an active entity).

    4. Form 990 Filing Requirement of 1, 2, 6 or 7.

    5. Form 990PF Filing Requirement of 1 , 2 or 3.

  3. Organizations recently determined to be exempt are given ample time to file their first return, or establish that they are below the gross receipts filing threshold.

  4. Entities not included in the CL, unless the ruling date is within 18 months of the extraction date of a particular edition, include the following:

    1. entities coded as having to file returns but have not done so for two years,

    2. extensions of time to file considered before extraction of the CL

    3. if a satisfying Transaction Code (TC), TC 59X has not posted.

  5. IRC 501(c)(3) (referred to as subsection (c)(3)) entries coded as not required to file returns (Form 990 = 2 or 6) are included in the CL, except for subordinates included in group exemptions or Group Return accounts.

  6. Any organization that requests to be listed in the CL and has not been issued a ruling or determination letters, must apply for such a letter to be included in the CL. In the past, several dummy entries for widely known religious, charitable and educational organizations (e.g., Girl Scouts) that had not formally applied for ruling or determination letters were added to the CL. This practice is no longer permitted under current CL procedures.

  7. Pursuant to section 7871 of the internal Revenue Code, Indian tribes and their subdivisions are treated similarly to states and their subdivisions for purpose of section 170(c)(10.

    Note:

    Qualified Organizations : Indian Tribal Governments are treated as states for purposes of deductibility of contributions under section 170(c)(1) of the Code, pursant to section 7871(a)(1)(A) of the code. Rev. Proc. 2002–64, 2002–42.I.R.B 717 contains a list of Indian Tribal Governments that are recognized by the Internal Revenue Service as tribal governments for purpose of section 7871 of the Code. A subdivision of an Indian Tribal government may be treated as a political subdivision of a state for purpose of deductibility of contributions under section 170(c)(1) of the Code if the service has determined that the entity qualifies as a political subdivision of an Indian tribal government under the requirements of section 7871(d) of the Code.

  8. Non-Exempt Charitable Trusts, BMF/Subsection Codes 90, 91 and 92 NECTS, are not included despite the other criteria. These are included on the BMF only for returns processing purposes.

25.7.6.2.1  (12-01-2002)
Cumulative List Coding Specifications

  1. Codes for the CL identify each organization listed by type and limitation on deductibility. The codes, with an explanation of each, are as follows:

    1. Code Description
      1 A central organization whose subordinate units, chapters, posts or locals are also included as having contributions deductible (Affiliation Codes 6 and 8).
      2 Contributions deductible only if used exclusively for charitable etc., purposes (Subsection Codes 08 or 10).
      3 Private operating foundation with a 50% deductibility limitation (BMF Foundation Code 02 or 03).
      4 Private non-operating foundation generally with a 30% deductibility limitation (BMF Foundation Code 04).
      5 No determination on foundation status (Subsection Code 03, BMF Foundation Code 09).
      6 Contributions limited to 30% (Subsection other than (c)(3)).
      7 Contributions deductible if made for use of a governmental unit, but only if exclusively for public purposes. (Subsection is 01 or 04 and the organization is coded as a volunteer fire department, NTEE = M24.)
      8 Foreign addressed exempt organizations. See paragraph in CL for limitations of deductibility to Canadian exempt organizations.

    Exception:

    Certain Canadian organizations, exempt organizations with foreign addresses, are incorporated in the US and subject to the normal 30% and 50% limitations.

  2. Organizations appearing in the CL without a code are public charities, generally having a 50% deductibility limitation. See also the Preface to the CL for additional information on the CL coding system.

25.7.6.3  (09-20-2006)
Processing Cumulative List Inquiries

  1. Inquiries regarding omissions, coding errors, etc. should be referred to the Cincinnati Area Office Customer Service Unit. If a special listing is requested or a systemic problem is suspected, refer to TE/GE HQ (SE:T:BSP).

  2. Inquiries received at service centers must be forwarded to the Cincinnati AO for resolution and response.

25.7.6.3.1  (12-01-2002)
Omissions and Errors

  1. AOs are responsible for correcting the CL, correcting the BMF if necessary, and responding to the inquirer. This includes referrals of inquiries other than those described herein.

    1. Omission inquiries should be handled using the unpostable procedures.

    2. For omissions where there is a BMF entity but it fails to meet the CL criteria (described in IRM 7.3.6.2), review the entity data, make corrections if necessary, and reply to the requester.

  2. Copies of ruling or determination letters referred to AOs or Cincinnati by the Ogden Submission Processing Center (OSPC) are reviewed to decide if Form 2363A, Exempt organization BMF Entity Change, should be prepared to add the exempt organization to the file.

  3. Inquiries about CL codes are reviewed and the BMF is corrected, if necessary, to reflect correct deductibility limitation codes. Such corrections may include a change to the BMF Foundation Code, Subsection Code, etc.

  4. Inquiries regarding the alphabetic placement of an organization’s name in the CL should be researched to decide if that placement is correct.

    IF THEN
    the name is correctly listed inform the inquirer that a change to their listing will require that their governing instrument (articles of incorporation, bylaws, etc.) be amended to reflect their correct legal name.
    if a legal name is incorrectly placed prepare Form 2363A with a TC 013 to correct.

  5. Organizations required to file annual EO returns, but fail to do so for two consecutive years or more before extraction of a particular CL revision, could be omitted from the CL. Research IDRS CC INOLES, BMFOL, or ENNOD to determine the appropriate filing requirement.

    IF THEN
    a return is required Perform IDRS research to find out if they filed the return after the CL extraction date (approximately 9/30), or granted an extension to file.
    a return has not been filed or satisfied TC 59X, inform the organization of its IRC 6033 annual Filing Requirement. When corresponding with the organization, inform the organization to file for all return tax periods not filed and to provide the reason for non-filing, to negate the daily delinquency penalty.
    research shows a return was filed after the CL extraction date, notify the organization that its late filing was the reason for the omission. To appear in the next supplement, prepare a Form 2363A, with a TC 016 and enter the CL Indicator Code 3, to force the listing into the next revision.
    a Service processing error has apparently been made which resulted in a CL omission or coding error, correct the account and include acknowledgment of the Service error and an appropriate apology as a part of correspondence sent to the taxpayer.

25.7.6.3.2  (09-20-2006)
Coordination between HQ and AO

  1. AOs are responsible for assisting HQ in those instances where they are unable to decide the validity of a CL omission, inclusion, coding error, etc., through EO/BMF research. This assistance may consist of securing an organization’s administrative file to decide a cause. It may also be necessary to coordinate with other functional areas, e.g., Appeals, Reporting Compliance SE:T:EO, or Regional Counsel, etc.

  2. SE:T:BSP and QAM:MSB:EO provide advice and direction to the continuous CL purification.

  3. Office of Business Systems Planning, SE:T:BSP is responsible for—

    1. preparing any necessary documents and initiate any coordination with other Service functions to identify and correct any systemic errors encountered in the CL program, or

    2. to include or delete an organization from the CL where normal BMF processing does not provide for the situation.

25.7.6.3.3  (09-20-2006)
CL Name File

  1. A CL Name File at the Martinsburg Computing Center (MCC), accepts input only from SE:T:BSP. This file contains a generic listing of well-known religious denominations and several organizations listed in the CL under names other than the legal names shown on their ruling or determination letters. This file is to be used for the following reasons:

    1. Dummy Accounts — Those that have never applied for or received a ruling or determination letter.

    2. Special Capitalization — When an organization uses an abbreviation that would not normally be capitalized, e.g., ABC Foundation. The computer would print this name as Abc Foundation.

  2. This supplemental file provides a regularly-updated entity listing for Publication 78. MCC must run this special file quarterly, January, March, June and September.

25.7.6.3.4  (09-20-2006)
Multiple Listings

  1. Coordinate Cumulative List matters involving group exemptions with HQ, SE:T:BSP.

  2. Many organizations are generally known by names other than the legal name under which a ruling or determination letter was issued. Organizations that do business under another name or an acronym, e.g., CARE, may be unknown to potential contributors and Service personnel under their legal names. Therefore, the Cumulative List Name File can be used to establish an entry under its commonly known name and also its legal name. The Service’s policy is to discourage multiple listings in the CL. However, in rare circumstances, an organization may be given one additional listing if requested in writing to SE:T:BSP. Requests for more than one additional listing will be denied.

25.7.6.3.5  (12-01-2002)
Cumulative List Indicator

  1. The CL indicator is a code that, if input to an EO entity that otherwise meets the CL selection criteria, will cause that EO entity to appear in the next quarterly supplement to the CL, rather than the next complete annual revision extracted at the end of October. This code enables Service personnel to relist an organization that may have been erroneously omitted, or that successfully contested a revocation of its IRC 170(c) status because of a declaratory judgment suit.

  2. The CL indicator is input on IDRS on Form 2363A, Floating Field Section, Cumulative List Indicator Code 3. See IRM 7.3.2, TE/GE Reports, for instructions on preparing Form 2363A.

  3. CL Indicators — Codes 3 — are automatically changed to "0" in Cycle 34 (late August) of each year. This prevents organizations from being continuously listed in CL supplements year after year.

25.7.6.4  (12-01-2002)
EO/BMF Revocation Procedures

  1. Organizations determined by the Service to be described in IRC170(c) are eligible for inclusion in the CL if they continue to meet the provisions of the IRC section under which tax-exempt status was granted. For purposes of deductibility of contributions, donors may rely on an organization’s listing in the CL to the extent provided in Rev. Proc. 82–39, 1982–2 C.B. 759.

  2. The public is notified about revoked 170(c) organizations that are no longer entitled to receive tax deductible contributions through announcements in the Internal Revenue Bulletin (IRB). These public notices provide the names and locations of revoked organizations, and specify the dates after which contributions are generally no longer deductible.

  3. The Service also notifies the public with reference to organizations who challenge the revocation of their tax exempt status in timely-filed declaratory judgment suits under IRC 7428, by publishing Declaratory Judgment Suit Announcements in the Internal Revenue Bulletin.

  4. Contributions to organizations no longer described in IRC 170(c)(2), who timely file suits challenging revocation, are deductible pursuant to IRC 7428(c) for individual contributors up to $1,000, with a husband and wife treated as one contributor.

    1. A once-a-year cumulative announcement published in the first IRB edition of each year lists all of the currently pending IRC 7428(c) cases. These announcements include the name, city, state, revocation date, the court in which the suit is brought, and the date the protection period for contributions terminates, if applicable.

    2. As the information becomes available, a separate IRB announcement provides new entries with respect to organizations that have recently timely challenged the revocation of their status in suits for declaratory judgment. These announcements contain all of the information listed in a. above, except the date of termination of the protection period for contributions provided in IRC 7428(c).

    3. In addition, as the information becomes available, a separate IRB announcement provides the date of termination of the protection period, or the concession by the Service that all contributions are deductible because litigation has ceased and the court or courts have ruled in favor of the organization.

25.7.6.4.1  (09-20-2006)
Preparing Form 4194

  1. Form 4194, Revocation of IRC 170(c) Status, is used to request publication of an announcement in the IRB for an organization whose tax-exempt status has been revoked and no longer qualifies for deductible contributions under IRC 170(c).

    1. Submission of this form to HQ will result in an organization’s name and address, city and state, to appear in the IRB announcement entitled: "Deletions from Cumulative List of organizations Contributions to Which Are Deductible Under Section 170 of the Code."

    2. Publication of an organization’s name in this announcement serves notice to potential contributors of a Service decision to revoke qualification for deductibility, effective on the date of IRB publication.

  2. Prepare Form 4194 and forward to HQ (SE:T:BSP) concurrently with the mailing of the final adverse determination letter to the organization. A photocopy of this letter must accompany Form 4194 when submitted.

    1. Form 4194 must not be prepared for organizations that have voluntarily terminated (ceased to exist).

    2. Do not submit Form 4194 for an organization until it has exhausted its appeal rights within the IRS.

    3. Use Form 5060, Report of Adverse Determination on Private Foundation Status and Private operating Foundation Status, to report adverse determinations on Private Foundation and Private Operating Foundation status. Forms 5060 are mailed directly to the HQ Bulletin Unit (W:CAR:MP:FP:S:SP).

    Note:

    Form 4194 does not affect an organization’s EO/BMF status. Use Form 2363A to update the EO/BMF status. See Chapter 2 for instructions on preparing Form 2363A.

  3. Form 4194 must include all of the following information:

    1. Name of the organization the exempt status of which has been revoked

    2. City and state of location

    3. Signature of the preparer

    4. Signature of preparers’ reviewer

    5. Address and symbols of the originating office

    6. A sentence or two in the remark’s area stating the reason for the revocation.

    7. A notice with a check box is included to show if the revocation is applicable to IRC 170(c)(2) status. IRC 170(c)(2) status is applicable to all (c)(3) organizations, except those testing for public safety.

    8. The Internal Revenue Bulletin revocation announcements that are applicable to a revocation of IRC 170(c)(2) status includes additional language regarding the validation of contribution’s provision under IRC 7428(c), since that is the only IRC 170(c) status to which IRC 7428(c) applies. IRB revocation announcements for non-(c)(3) organizations do not include this additional language.

25.7.6.4.2  (09-20-2006)
Area Office Procedures

  1. AOs are responsible for ensuring that the EO/BMF, AIMS, and the CL are updated correctly, and in a timely fashion, to reflect IRC 170(c) revocations.

    1. Forward Form 4194, along with photocopies of the related final adverse determination letters to the Director, Office of Business Systems Planning, SE:T:BSP, concurrently with the mailing of the final adverse determination letter to the organization.

25.7.6.4.3  (09-20-2006)
HQ Procedures

  1. SE:T:BSP is responsible for processing the Form 4194, and the related final adverse determination letters, and also acts as a liaison between SE:T:BSP, field and HQ functional areas involved in this process. SE:T:BSP is also responsible for the following actions:

    1. Review Form 4194 for accuracy, ensure that photocopies of related final adverse determination letters are attached, and resolve, through appropriate field offices, any questions that may arise regarding the validity of publishing the revocations.

    2. After review, forward the original Form 4194 to the HQ Bulletin Unit, for publication in the next IRB edition.

    3. Coordinate with the Office of the Chief Counsel (Tax Exempt and Government Entities), (CC:TEGE), when appropriate.

  2. CC:TEGE will coordinate with the Department of Justice to identify and track litigation by organizations the exempt status of which has been revoked and that have timely filed suit for declaratory judgment under IRC 7428. The tracking of such suits will permit publication of IRB announcements.

    1. SE:T:BSP must provide photocopies of Form 4194 and the related final adverse determination letters to help identify IRC 170(c)(2) organizations that elect judicially to appeal the revocations of tax exempt status.

    2. CC:TEGE must provide SE:T:BSP with current information on pending IRC 7428(c) cases to maintain a current file from which this information may be provided to the public through the periodic IRB announcements.


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