Private Foundation - IRS Processing of Exemption Applications


Your exemption application may provide enough information for the IRS to issue a ruling on your exempt status under section 501(c)(3). An IRS reviewer may need additional information to complete your application, however. The reviewer will call the organization or an authorized representative advising that the application was assigned for development and an additional information request letter is being sent to the organization.

While you wait

If an annual exempt organization return is due while the organization's application for recognition of exempt status is pending with the IRS (including any appeal of a proposed adverse determination), the organization must file it, indicating that its exemption application is pending. Like other exempt organization returns, these are subject to public disclosure .

If an organization has unrelated business income of more than $1,000, also file Form 990-T, Exempt Organization Business Income Tax ReturnPDF.

Your organization should comply with tax law requirements applicable to section 501(c)(3) tax-exempt organizations. See Publication 4221-PF, Compliance Guide for 501(c)(3) Private FoundationsPDF, for more information.

Incomplete application

If an exemption application does not contain the required information, including the user fee, the IRS will return it with a letter of explanation, and will not consider the application on its merits. Generally, if an application is returned because it is substantially incomplete, the filing date is the date the organization resubmits a complete application and the IRS accepts it for processing.

Different application form needed

If a different application form is required for your organization, the IRS will so advise your organization and will provide the appropriate application form for your convenience in reapplying under that paragraph, if you wish to do so. Although supporting information previously furnished need not be duplicated, you must provide any necessary additional information required for the application. If your reply is not received within the specified time, your application will be processed only for the paragraph under which you originally applied.

TIP:   If you decide that the application should be processed for the paragraph under which you originally applied, you must respond to any outstanding questions regarding whether the organization qualifies under that paragraph, or the application will be denied because the organization has not provided enough information to show that it is exempt under the paragraph for which it applied.

IRS responses

Foundations that submit a complete application will receive an acknowledgment from the IRS. If the application is incomplete, the application and user fee will be returned.

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