In addition to periodic reporting, a tax-exempt organization may interact with the Internal Revenue Service at key times during its life cycle.
Reporting Changes to the IRS
An exempt organization that is required to file an annual return must report name, address, and structural and operational changes on its return. Similarly, a small organization that is required to file an annual notice must report such changes in its filing. Regardless of whether an organization files an annual return or notice, it may also report these changes to the EO Determinations Office; however, such reporting does not relieve the organization from reporting the changes on its annual return.
As stated in the exemption determination letter, an organization must notify the IRS of material changes in its form, activities, or sources of support. This includes notifying the IRS when the organization terminates.
Private Letter Rulings and Determination Letters
You may want to seek a private letter ruling or determination letter on the tax consequences of material changes in your structure or activities.
The IRS may audit an exempt organization to ensure that it is complying with the requirements for exemption and paying required taxes.
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