Part 4. Examining Process

Chapter 75. Exempt Organizations Examination Procedures

Section 24. Organizations Covered by a Group Ruling

4.75.24 Organizations Covered by a Group Ruling

Manual Transmittal

May 18, 2021

Purpose

(1) This transmits revised IRM 4.75.24, Exempt Organizations Examination Procedures, Organizations Covered by a Group Ruling.

Background

IRM 4.75.24 contains guidance for examining central and subordinate organizations covered under a group return.

Material Changes

(1) Converted the manual to plain language. For more guidance on plain language, see www.plainlanguage.gov.

(2) Included the TEGE-04-0419-0010 IG memo, Reissuance: Procedures Following the TE/GE Reorganization. Memo is dated April 23, 2019.

(3) All references to "Audit" , "Auditor" , and "Auditing" are changed to "Examination" , "Examiner" , and "Examining" (except where published).

(4) Revised policy statements and delegation orders to reference IRC 1.2.1 and 1.2.2 in accordance with IG memo TEGE-04-0819-0015, Consolidation of Policy Statements and Delegation Orders into Two New IRM Sections, dated 8/23/2019.

(5) Eliminated all references to "intermediate organizations" throughout the manual.

(6) IRM 4.75.24.3(7): Deleted language that we are allowed to contact the Central Organization while auditing the subsidiary.

(7) IRM 4.75.24.3.2.2: Removed references of Appeals cases headed to review. Updated Appeals statute requirements.

(8) IRM 4.75.24.3.3(1): We may not notify the Central Organization of the examination of its subsidiaries.

(9) IRM 4.75.24.4(3): Revocation of the Central Organization terminates the group ruling and removed language stating that the Central Organization revocation is not subject to IRC 7428 as that does not follow the PATH Act.

(10) Changed the Exempt Organizations structure in accordance with the reorganization. (ie; references to EO Manager, Examination Programs and Review (EPR) becomes Area Manager, GL/FIU.

(11) IRM 4.75.24.3.3(3): Replaced obsolete letter 3610-R with 30-day letter 3618.

(12) IRM 4.75.24.5(4): Added termination procedures from IRM 4.75.16.5.11(4).

(13) IRM 4.75.24.5: Section amended. Mandatory Review no longer receives termination cases.

(14) IRM 4.75.24.6(4): Amended chart to apply to all 501(c) Organizations in accordance with the PATH Act.

(15) Removed old Exhibit 4.75.24-1 "Notification Letter to Central Organization - Revocation of Subordinate," and replaced it with published Letter 6263.

(16) Removed old Exhibit 4.75.24-3 "Notification Letter to Central Organization - Termination of Subordinate," replaced it with published Letter 6263.

(17) Removed old Exhibit 4.75.24-4 "Central Organization 30 Day Proposed Revocation Letter (501(c)(3))," replaced it with published letter 3618.

(18) Removed old Exhibit 4.75.24-6 "Secure E-Mail Message...Termination of a Central Organization," as terminations no longer go through Mandatory Review Staff.

(19) Letter 5326 is replaced with Letter 5918.

Effect on Other Documents

This revision supersedes IRM 4.75.24, Organizations Covered by a Group Ruling, dated July 3, 2017.
This revision incorporates:
Interim Guidance Memorandum TEGE-04-0216-0003, PATH ACT-Impact on Revocations and Modifications of Exempt Status.
Interim Guidance Memorandum TEGE-04-0419-0010, Reissuance: Procedures Following the TE/GE Reorganization.

Audience

Tax Exempt and Government Entities
Exempt Organizations
Examinations

Effective Date

(05-18-2021)

Robert Malone
Director, Exempt Organizations and Government Entities
Tax Exempt and Government Entities

4.75.24.1 (05-18-2021)

Program Scope and Objectives

  1. Purpose: This manual focuses on an examiner’s responsibilities for examinations of organizations under a group ruling. It addresses these topics:

    1. Group rulings’ various structures

    2. Group rulings’ filing requirements

    3. Special procedures for specific issues

    4. Statute requirements

    5. Appeals consideration

    6. Revocations of group rulings

    7. Terminations of group rulings

  2. The procedures in this manual apply to Exempt Organization examiners.

  3. Policy Owner: Director, Exempt Organizations and Government Entities

  4. Program Owner: Exempt Organizations and Government Entities

4.75.24.1.1 (05-18-2021)

Background

  1. This IRM has specific guidance for EO field examiners. It supplements other IRMs to address the unique problems and procedures in organizations under group rulings.

4.75.24.1.2 (05-18-2021)

Authority

  1. The primary objective of the EO examination program is regulatory with emphasis on continued qualification of exempt organizations. Policy Statement 4-119 and IRM1.2.1.5.36.

  2. IRC7602 gives examiners the authority to:

    1. Examine any books, papers, records or any data necessary to complete an exam.

    2. Issue a summons for information necessary to complete an exam.

    3. Take testimony under oath to secure additional information needed.

    4. Ask about any offense connected with administering or enforcing the Internal Revenue laws.

4.75.24.1.3 (05-18-2021)

Responsibilities

  1. During an examination, examiners are responsible for determining if the organization:

    1. Meets the requirements for exemption under a group ruling.

    2. Meets the requirements as a central or parent organization.

    3. Filed all required tax and information returns.

    4. Reported information and tax liabilities correctly.

4.75.24.1.4 (05-18-2021)

Program Controls

  1. Consult the Knowledge Management Network (K-Net) to ensure you’ve properly developed issues and consistently applied the law.

4.75.24.1.5 (05-18-2021)

Acronyms

  1. The table lists commonly used acronyms and their definitions.

    Acronym Definition
    AIMS Audit Information Management System
    EOE Exempt Organizations Examinations
    TE/GE Tax Exempt/Government Entities
    POA Power of Attorney
    PF Private Foundation
    MR Mandatory Review Staff
    REV. PROC. Revenue Procedure

4.75.24.2 (05-18-2021)

Organizational Structures

  1. A "central" or "parent" organization is an organization recognized as exempt that has one or more subordinates under its general supervision or control. The central organization that holds a group exemption (not the IRS) determines which organizations are included as subordinates under its group exemption ruling.

  2. A "subordinate" may consist of a:

    • Chapter

    • Local

    • Post, or

    • Unit

    of a central organization.

  3. A subordinate may or may not be incorporated, but it must have an organizing document.

  4. Central organizations must establish that each of the subordinates included in the group ruling meet all these criteria:

    1. Affiliated with the parent at the close of its annual accounting period.

    2. Subjected to the parent's general supervision or control.

    3. Exempt under the same paragraph of IRC 501(c) as the other subordinates.

    4. Not organized or operated as a private foundation.

    5. Not organized and operated in a foreign country.

    Note:

    The central organization doesn’t have to be exempt under the same paragraph of IRC 501(c) as its subordinates. The subordinates must be exempt under the same paragraph of IRC 501(c).

  5. See IRM 25.7.3.1.1, Group Exemption Requirements, for a discussion of other requirements for exemption of the subordinates.

4.75.24.3 (05-18-2021)

Examination Considerations

  1. Group rulings present unique situations:

    1. Central organization can add and remove subordinate organizations from a group ruling, simply by updating their annual list of subordinates.

    2. The IRS can terminate the exemption for a subordinate organization or the central organization, or can terminate the group ruling in its entirety.

  2. You can’t modify a subordinate organization’s exempt status without modifying the group ruling itself. To terminate the exempt status of a subordinate is to remove it from the group ruling. If a subordinate fails to qualify for tax-exempt status under the same paragraph of IRC 501(c) as the other subordinates in the group, you must remove it from the group ruling, even if it may qualify for another paragraph in IRC 501(c).

    Example:

    ABC, a veterans’ organization, is a subordinate organization covered by a group exemption ruling held by its parent organization. All subordinates in the group are exempt under IRC 501(c)(19). ABC's Form 990 for 201812 is under examination. The examiner determines that ABC doesn’t meet the requirements of IRC 501(c)(19) because it fails the membership tests. ABC does, however qualify for tax-exemption under IRC 501(c)(4). Accordingly, you must propose revocation under IRC 501(c)(19), remove it from the group ruling, and encourage it to apply for tax-exempt status under IRC 501(c)(4).

  3. Subordinates who obtain a separate determination letter are no longer included under the group ruling. The subordinates will lose their individual determination letter if they join a group ruling. See IRM 7.20.4.4 (5).

  4. Administratively, group rulings result in fewer applications for exemption. Subordinates of a group ruling can also opt to reduce the number of information returns by filing a group return. See IRM 4.75.24.3.1.

  5. Group rulings also complicate the issue of the statute of limitations. See IRM 4.75.24.3.2:

    1. Which return(s) start the running of the statute of limitations?

    2. Who is authorized to sign an extension?

    3. Who signs when the organization under examination filed via a group return?

  6. Group rulings also modify the notification procedures. IRS must, in certain situations, contact the central organization.

4.75.24.3.1 (05-18-2021)

Group Returns

  1. A central organization may file, under 26 CFR 1.6033-2(d), in addition to its own annual information return, a group return on behalf of two or more of its subordinate organizations covered by a group ruling:

    1. Affiliated with the central organization at the close of its annual accounting period.

    2. Subjected to the general supervision or control of the central organization.

    3. Exempt under the same paragraph of IRC 501(c) as the other subordinates.

    4. Filed based on the established annual accounting period of the central organization.

  2. The group return may include only those exempt subordinates that have authorized in writing, the central organization to include them in the return The subordinates must submit to the central organization statements specifying their gross income, receipts and disbursements, as well as such other information relating to them as is required to be stated in the group return.

  3. A central organization that files a group return must attach to the return, a schedule of the subordinates’ names, addresses and employer identification numbers, for both the subordinates included and not included in the group return.

  4. Any subordinates not included in a group return are subject to the standard filing requirements and must file one of the following forms, as appropriate:

    • Form 990, Return of Organization Exempt From Income Tax

    • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, and

    • Form 990-N, e-Postcard.

  5. The central organization may not include itself on the group return. The central organization must file its own separate return. See 26 CFR 1-6033-2(d).

  6. If the central and/or subordinate organizations are subject to unrelated business income tax or other taxes, they must file their own Forms 990-T or other tax returns. The group return may reflect a consolidated amount of unrelated business income in the Form 990 Part VIII, Statement of Revenue.

4.75.24.3.2 (05-18-2021)

Determination of Filing Date

  1. The following rules should generally be used for determining the filing date of the return:

    IRC 7502. Timely Mailing Treated as Timely Filing and Paying
    If the return is postmarked: And the return is received: The Filing Date is Then:
    On or before the normal due date Before, on or after the normal due date Normal due date
    After the normal due date
    (No extension)    		 After the normal due date Service Center received date
    On or before the extension date
    (After the normal statute date)    		 On or before the extension due date Service Center received date
    On or before the extension date
    (After the normal statute date)    		 After the extension due date Postmark date
    After the extension date After the extension due date Service Center received date

  2. The central organization is subject to the standard filing requirements:

    2010 Tax Year and later
    (Filed in 2011 and later)    		 Form to file
    Gross receipts normally ≤ $50,000 990-N
    Gross receipts < $200,000, and
    Total assets < $500,000    		 990-EZ or
    990
    Gross receipts ≥ $200,000, or
    Total assets ≥ $500,000    		 990

    Note:

    Organizations eligible to submit the e-Postcard or file Form 990-EZ may choose to file a full return.

  3. A group return is always filed on a Form 990.

  4. A central organization filing a group return on behalf of two or more affiliates uses a special Employer Identification Number (EIN) to file the group return. The organization is provided this special EIN with its group ruling letter. To research the EIN, use command code EOGEN (Exempt Organization Group Exemption Number) using the group exemption number (GEN) to find the EIN of the group return. Consult the Field Agent Support Team (FAST) if you can’t find the EIN through regular IDRS research.

    Note:

    EOGEN will tell you the parent and all the subs. You must look through all the subs until you find the one they are using to file the group return.

  5. A subordinate organization may or may not be included on a group return. Review BMFOLT (Business Master File Online Transcript) on IDRS for the subordinate's EIN for the year in question. If a subordinate has been included on the group return, BMFOLT reflects a transaction code (TC) 590 and closing code (CC) 14. The transaction will also reflect a "PAR EIN XX-XXXXXXX" .

  6. If a subordinate claims to have been included on a group return, but IDRS doesn’t show a TC 590 CC 14, secure a copy of the group return via Online SEIN. Review the return to see whether the subordinate is listed as included on the group return. Contact the FAST unit to request them to input TC 590 CC 14.

    Note:

    If a central organization doesn’t include the subordinate on the list of subordinates it annually files with the IRS, the subordinate isn’t recognized as part of the group exemption. In this situation, the subordinate's status on BMFOLO (Business Master File Online Organization)/INOLES (Online Entity) is 28, and is subject to a Form 1120 filing requirement.

  7. If included on a group return, the subordinate's statute of limitations is based on the group return. See IRM 4.75.24.3.2 (1) to determine the statute of limitations. If the subordinate is not included on the group return, it is subject to normal filing requirements. See IRM 4.75.24.3.2 (2) for the filing requirements. If no return is filed, secure a delinquent return. See IRM 4.75.22, EO Delinquent, Amended and Substitute for Return Procedures.

    Note:

    If the subordinate is neither included on a group return nor files its own return for three consecutive years, the organization is subject to auto revocation. If auto revoked, the subordinate may apply for reinstatement of its exempt status. Don’t secure a delinquent return in these situations. If the parent organization fails to file its own return for three consecutive years, the parent organization is automatically revoked and the entire group ruling is terminated.

4.75.24.3.2.1 (02-12-2013)
Extending the Statute of Limitations

  1. Request a statute extension if the case is subject to Mandatory Review and there are less than 455 days remaining on the statute of limitations. If not subject to Mandatory Review, ensure that you close the case to the Closing Unit with 180 days remaining on the statute.

  2. See below for officers authorized to sign a consent:

    If examining a Authorized to sign consent
    Subordinate organization's own Form 990 series return Officers of the subordinate. If authorized, officers of the central organization may sign on behalf of the subordinate.
    Central organization Only officers of the central organization.
    Group return Officers of the central organization. Use the special EIN of the group return

    Note:

    In some circumstances, contact Area Counsel when the subordinates are separate legal entities, such as corporations, trusts or other entities.

  3. In all situations, if there’s a duly authorized valid Power of Attorney, the POA may sign the consent on behalf of the organization. Attach a copy of the signed Power of Attorney to the signed consent form.

4.75.24.3.2.2 (05-18-2021)
Unagreed Cases Protested to Appeals

  1. Remember these timeframes for an unagreed case with a formal protest to Appeals:

    • Review no longer accepts protested cases subject to Appeals. Instead, the group forwards appealed cases with sufficient time on the statute directly to Appeals.

    • Appeals won’t accept protested cases with less than 455 days (15 months) remaining on the statute of limitations.

  2. For cases you’re returning to Appeals after considering a new issue or new information:

    • Continue to follow the requirements for a complete protest package in IRM 4.75.16.6.1, Protests to Appeals.

    • Appeals won’t accept cases with less than 180 days remaining on the statute of limitations.

  3. When a case is returned to EO Examinations for correction(s) the examiner must ensure there is at least 210 days left on the statue of limitations before sending the case back to Appeals.

  4. For an unagreed case without protests, the case must have at least 270 days remaining on the statute of limitations when Review receives it, or it is returned to the groups for the final letter.

4.75.24.3.3 (05-18-2021)

Notification Requirements

  1. You should not notify the central organization of your examination of a subordinate organization unless authorized to do so by the subordinate organization.

    Exception:

    modifications, terminations and revocations

  2. If you can’t contact the subordinate organization, contact the central organization for help contacting the subordinate’s officers. The central organization is responsible for ensuring that the subordinate organization continues to meet the requirements for exemption under the group ruling.

  3. See the following chart for the appropriate letter to issue and the group that issues the letter:

    Taxpayer's situation Letter to Issue
    Subordinate Organization Revocation ("removal from group exemption coverage" )

    1. Issue 30-day Letter (Letter3618), then to respond to the 30-day letter:

      1. If valid protest received -
        Issue Rebuttal letter
        Letter 5918

      2. If invalid protest or no reply- Issue 90-Day Final Adverse Determination Letter,
        (Exhibit 4.75.24-1.)

      3. If agreement is secured - Issue 90-Day Final Adverse Determination Letter,
        (Exhibit 4.75.24-1).

    2. Notification letter to Central Organization if revocation becomes final-
      Issue Letter 6263
    Subordinate Organization Termination

    1. Termination Letter - 501(c)
      (Letter5426)

    2. Notification letter to Central Organization
      Issue Letter 6263
    Central Organization Revocation Issue 30-day Letter 3618, then to respond to the 30-day letter:

    1. If valid protest received -
      Issue Rebuttal letter
      (Letter5918)

    2. If invalid protest or no reply -
      Issue 90-Day Final Adverse Determination Letter
      (Exhibit 4.75.24-2)

    3. If agreement is secured -
      Issue 90-Day Final Adverse Determination Letter
      (Exhibit 4.75.24-2)
    Central Organization Termination Termination letter
    (Letter5426)
    Note: The exam group issues Letter 3618 and other custom 30-day letters, and if the agent receives a valid protest, Letter 5918. Mandatory Review issues all of the other letters.

  4. Prepare all letters issued to the taxpayer. For Mandatory Review letters, leave the contact information fields blank. Upload the letter to the Reporting Compliance Case Management System (RCCMS) and note on the Form 3198-A, TE/GE Special Handling Notice, the file name for the letter and its folder location on RCCMS.

4.75.24.4 (05-18-2021)

Revocations

  1. When you’re determining that a subordinate organization should no longer be tax-exempt, you are effectively proposing to remove the organization from the group ruling. This terminates their exempt status, and constitutes an adverse action that triggers the subordinate's rights to appeal. When writing the report of examination, minimize the use of terms like "revoke" and "revocation." Instead, use the phrase "removal from the group exemption" or some variation.

  2. Removal of any subordinates that are under an IRC 501(c) group ruling triggers the administrative record requiremen if unagreed. See IRM 4.75.32, Declaratory Judgment Cases And The Administrative Record for unagreed cases (per IGM TE/GE-04-0420-0004).

  3. Revocation of the central organization's exempt status results in the termination of the group ruling as a whole. The subordinate organizations may seek their own individual recognition, join another group ruling, or if a statutorily exempt organization continue as exempt without recognition. The central organization is subject to declaratory judgment procedures under IRC 7428 and Mandatory Review (or Appeals) issues a 90-day final adverse determination letter (FADL). Contact Mandatory Review for a custom agreed revocation letter. See also IRM 4.75.20, Final Case Processing.

  4. For all revocations of central or subordinate organizations under examination, prepare Form 2363-A, Request for IDRS Input for BMF/EO Entity Change, to update the Exempt Organizations Business Master File (EO BMF) status to 22. Leave the Form 2363-A in the case file (and/or upload the Form 2363-A to RCCMS). See IRM 4.75.31, for securing converted returns or enforcing income tax on revoked organizations.

  5. If Mandatory Review concurs with (or Appeals sustains) the revocation, they send Form 2363-A to the FAST unit to update the EO BMF status to 22. If a central organization is revoked, the GEN file updates all the subordinates to status 28.

4.75.24.5 (05-18-2021)

Terminations

  1. Organizations that have their own exemption letter are corporations, trusts or associations. Organizations included under a group ruling may receive charters from the central organization. This is common with many fraternal and veterans’ organizations.

  2. When examining a subordinate that has a charter from the central organization, in lieu of or in addition to a certificate of incorporation, determine whether the charter has been rescinded/revoked by the central organization. Obtain a copy of the letter rescinding/revoking the charter of the subordinate entity.

  3. When a central organization dissolves/terminates, is revoked, or relinquishes its exemption, then recognition on a group basis terminates. A subordinate may then file for a separate exemption letter by following the standard procedures in Rev. Proc. 2020-5 (updated annually) and submitting the appropriate application (e.g., Form 1023 including paying the user fee).

    Note:

    The subordinate may also join another group, or if statutorily exempt or not required to file an application, continue as exempt without recognition. Refer to Pub 557, Application Procedures for Exempt Recognition - for application requirements, forms and procedures.

  4. If terminating a subordinate in a group ruling, see the notification requirements in IRM 4.75.24.3.3.

  5. For all subordinate termination cases, prepare Form 2363-A to update the status to 20. Leave the Form 2363-A in the case file (and/or upload the Form 2363-A to RCCMS). Examiners will send the Form 2363-A to the FAST unit when they close the case.

  6. When a central organization terminates, prepare Form 2363-A to update the EIN's status to 29. Leave the Form 2363-A in the case file (and/or upload the Form 2363-A to RCCMS). Examiners will send the Form 2363-A to the FAST unit when they close the case. When processed, this updates the subordinates to EO BMF status 28.

    Note:

    For other case closing procedures, please see IRM 4.75.16 Case Closing Procedures.

4.75.24.6 (05-18-2021)

Concurrent Examinations

  1. A central organization’s group ruling terminates when:

    1. A central organization notifies the IRS that it is going out of existence by filing a return.

    2. Its exemption is revoked (automatically or manually).

    3. It files a final return.

    4. The IRS revokes the group ruling letter.

  2. The action impacts any current examination of a subordinate organization. All members of the group ruling are updated to EO BMF status 28. Any former subordinate organizations who later file a Form 990 series return are updated to status 40 or 36, depending on the code section claimed on the return. Subordinate organizations are also placed in status 40 or 36 when a central organization notifies them that it’s dissolving its group ruling (but not terminating).

  3. When possible, attempt to coordinate exams of central and subordinate organizations. If you’re auditing subordinate organizations, check AIMS to see if the central organization and/or the group return is under audit. Contact the examination group to discuss the exam issues and coordinate actions.

  4. Mandatory Review follows these actions when these events occur:

    For all central organization revocations:
    1. Mandatory Review or Appeals issues the final letter (revocation or FADL to the central organization.)
    2. The reviewer, or Appeals, notifies the manager, Mandatory Review, of the issuance of the letter to the central organization.
    3. The manager, Mandatory Review, in turn notifies the Area Manager, GL\FIU, of the revocation of the central organization.
    4. The manager, Mandatory Review, secure emails the area managers giving directions on any subordinates in their inventories. See Exhibit 4.75.24-3 for all 501(c) revocations.
    As all 501(c) Organizations Are Subject to IRC 7428:
    5. When the waiting period per IRC 7428 ends, either the statute coordinator, Mandatory Review, or Appeals, depending on the file’s location, notifies the manager, Mandatory Review of whether a petition was filed with the court.
    6. The manager, Mandatory Review, informs the applicable area manager.
    7. If no petition was filed, the manager, Mandatory Review, secure emails the area managers to proceed with final actions. See Exhibit 4.75.24-4.

    Note:

    Cases where a petition was filed remain in suspense.
    8. Upon notification by Appeals or Counsel of the conclusion of the court case(s), the manager, Mandatory Review, secure emails the area managers to remove cases from suspense and conclude the exams. See Exhibit 4.75.24-5 and Exhibit 4.75.24-6.

  5. Follow these actions for the central and subordinate organizations:

    If the central organization's revocation/termination... Then for the subordinate...
    Occurs before the subordinate’s Close the examination of the Form 990.
    Pursue other taxes (excise/employment).
    Occurs after the subordinate’s Follow normal procedures.

Exhibit 4.75.24-1

90-Day Final Adverse Determination Letter - Revocation of 501(c) Subordinate

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242		  
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Person to Contact:
[Insert name]
Employee Identification Number:
[Insert ID Number]
[Insert name of entity]
[Insert attention line]
[Insert street address]
[Insert city, state, and zip code]		 Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
CERTIFIED MAIL
Dear [Sir or Madam],
This is a final adverse determination regarding your exempt status under section 501(c)[_] of the Internal Revenue Code (the Code).
The revocation of your exempt status was made for the following reason[s]:
[Insert applicable and appropriate summary of the reasons for the revocation.]
Contributions to your organization are no longer deductible.
{Note: If, the organization has deductibility code “2”, this paragraph is not applicable}
You are required to file income tax returns on Form [1120 or 1041]. If you have not already filed these returns and the agent has not provided you instructions for converting your previously filed Form(s) 990 [or 990-EZ or 990-BL or 990-PF] to Form(s) 1120 [or Form(s) 1041], you should file these income tax returns with the appropriate Service Center for the tax year[s] ending [date], and for all tax years thereafter in accordance with the instructions of the return.
 
Processing of income tax returns and assessments of any taxes due will not be delayed should a petition for declaratory judgment be filed under section 7428 of the Internal Revenue Code.
If you decide to contest this determination, you may file an action for declaratory judgment under the provisions of section 7428 of the Code in one of the following three venues: United States Tax Court, the United States Court of Federal Claims, or the United States District Court for the District of Columbia. A petition or complaint in one of these three courts must be filed before the 91st day after the date this determination was mailed to you if you wish to seek review of our determination. Please contact the clerk of the respective court for rules and the appropriate forms regarding filing petitions for declaratory judgment by referring to the enclosed Publication 892. Please note that the United States Tax Court is the only one of these courts where a declaratory judgment action can be pursued without the services of a lawyer. You may write to the courts at the following addresses:
United States Tax Court
400 Second Street, NW
Washington, DC 20217
US Court of Federal Claims
717 Madison Place, NW
Washington, DC 20005
U. S. District Court for the District of Columbia
333 Constitution Ave., N.W.
Washington, DC 20001
You also have the right to contact the Office of the Taxpayer Advocate. If you wish to seek review of our determination, a petition or complaint must be filed in one of these three courts before the 91st day after the date this determination was mailed to you. The Taxpayer Advocate cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. The Taxpayer Advocate can, however, see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free, 1-877-777-4778, and ask for Taxpayer Advocate Assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State Zip]
[Phone Number]
If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
  Sincerely,
 
 
  [Name of Designated Official]
Designated Official
Enclosure:
Publication 892
Exhibit 4.75.24-2

Central Organization 90-Day Final Adverse Determination Letter (501(c))

Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242		  
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Person to Contact:
[Insert name of reviewer]
Employee Identification Number:
[Insert ID Number]
[Insert name of entity]
[Insert attention line]
[Insert street address]
[Insert city, state, and zip code]		 Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
CERTIFIED MAIL
Dear [Sir or Madam]:
This is a final adverse determination regarding your exempt status under section 501(c)[_] of the Internal Revenue Code (the Code). Our favorable determination letter to you dated [date] is hereby revoked and you are no longer exempt under section 501(a) of the Code effective [date].
The revocation of your exempt status was made for the following reason[s]:
[Insert applicable and appropriate summary of the reasons for the revocation.]
Contributions to your organization are no longer deductible.
{Note: If, the organization has deductibility code "2" , this paragraph is not applicable}
Revenue Procedure 80-27 provides guidance on group exemptions. According to this revenue procedure, when we terminate your tax exemption, we also terminate your group exemption. Effective [date], your Group Exemption Number [insert GEN] is no longer valid. Please tell your subordinates of this action. Each subordinate seeking recognition of tax exemption should file an individual application or file a Form 990 series return, as appropriate.
You are required to file federal tax returns for the tax period(s) shown above. Unless an extension of time is granted or the returns are already filed, send them to Ogden Service Center within 60 days from the date on this letter. Returns for later years are filed with the appropriate service center indicated in the return instructions.
If you decide to contest this determination, you may file an action for declaratory judgment under the provisions of section 7428 of the Code in one of the following venues:
•
•
•		 the United States Tax Court
the United States Court of Federal Claims
the United States District Court for the District of Columbia
A petition or complaint in one of these three courts must be filed before the 91st day after the date this determination was mailed to you if you wish to seek review of our determination. Please contact the clerk of the respective court for rules and the appropriate forms regarding filing petitions for declaratory judgment by referring to the enclosed Publication 892. Please note that the United States Tax Court is the only one of these courts where a declaratory judgment action can be pursued without the services of a lawyer. You may write to the courts at the following addresses:
United States Tax Court
400 Second Street, NW
Washington, DC 20217
U.S. Court of Federal Claims
717 Madison Place, NW
Washington, DC 20005
U. S. District Court for the District of Columbia
333 Constitution Ave., N.W.
Washington, DC 20001
Filing a petition for declaratory judgment however, does not delay the processing of income tax returns and assessments of any taxes due. A petition or complaint must be filed in one of these 3 courts before the 91st day after the date this determination was mailed to you.
You have the right to contact the Taxpayer Advocate Service. Their assistance is not a substitute for established IRS procedures, such as the formal appeals process. They cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. However, they can see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free 1-877-777-4778 and ask for Taxpayer Advocate assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Internal Revenue Service
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State, Zip]
[Phone Number]
If you have any questions, please contact the person listed above.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations
Enclosures:
Publication 892
Form 6018, Consent to Proposed Action - Section 7428
Exhibit 4.75.24-3

Secure E-Mail message from Manager, Mandatory Review, to Area Managers Regarding the Revocation of a Central Organization (501(c)- FADL Issued)

Subject: Central Organization Revocation, Final Adverse Determination Letter Issued

On [insert date], Mandatory Review issued a 90- day adverse final determination letter proposing revocation to [insert name of central organization]. Under Rev. Proc. 80-27, the group exemption is terminated. Any organization under GEN [insert GEN] will now be updated to EO BMF status 28 and be subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For years after that date, follow the instructions in IRM 4.75.31 for converted returns. For any cases where you are pursuing revocation but no taxes, survey the case. The appropriate closing letter is a custom letter.

Exhibit 4.75.24-4

Secure E-Mail message from Manager, Mandatory Review, to Area Managers Regarding the Revocation of a Central Organization - FADL Not Petitioned)

Subject: Central Organization Revocation Final

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization], which did not file a petition with the courts. Under Rev. Proc. 80-27, the group exemption is terminated. Any organization under GEN [insert GEN] is to be updated to EO BMF status 28 and is subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For subsequent years, see IRM 4.75.31 for converted returns. If pursuing revocation but no taxes, survey the case. The appropriate closing letter is a custom letter.

Exhibit 4.75.24-5

Secure E-Mail message from Manager, Mandatory Review, to Area Managers Regarding the Revocation of a Central Organization (Courts Upheld)

Subject: Central Organization Final Adverse Letter Petitioned

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization]. The organization has lost its court case. Under Rev. Proc. 80-27, the group exemption is terminated. Any organization under GEN [insert GEN] is to be updated to EO BMF status 28 and is subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For subsequent years, see IRM 4.75.31 for converted returns. If pursuing revocation but no taxes, survey the case. The appropriate closing letter is a custom letter.

Exhibit 4.75.24-6

Secure E-Mail message from Manager, Mandatory Review, to Area Managers Regarding the Revocation of a Central Organization (Courts Rejected)

Subject: Central Organization Final Adverse Letter Petitioned

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization]. We did not prevail in the court case. Therefore, please check your inventory to see if you have any subordinate cases in suspense. If so, please remove those cases from suspense and continue with the examinations.