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Notice of IRS Changes to Group Exemptions and Group Returns

AAFCPAs would like to make our nonprofit clients aware that as of January 1, 2019, the IRS stopped mailing lists of parent and subsidiary accounts to central organizations (group ruling holders) for verification and return.

If your organization is the Central Organization of a group exemption, historically you would have received an annual mailing from the IRS with a list of subordinate organizations. This mailing allowed the Central Organization to simply verify the information, provide updates if necessary, and return the mailing back to the IRS.

The responsibility now lies with the Central Organizations to comply with the annual reporting requirements in Section 6 of Revenue Procedure 80-27. As noted in the Revenue Procedure, the required information must be submitted at least 90 days before the end of the Central Organization’s year end. For example, a Central Organization with a June 30, 2019 year end had to submit its annual update by April 1, 2019. If you missed this deadline and would like guidance on complying with this IRS reporting requirement, please contact your AAFCPAs partner.

The required information, which must be submitted annually, includes the names, addresses, and employer identification numbers of subordinate organizations that have terminated, disaffiliated from the group, been added to the group, or changed names or addresses. If there are no changes, the Central Organization must submit a statement to that effect.  AAFCPAs recommends also submitting a list of the names, addresses, and employer identification numbers of subordinate organizations that are current and still under the group exemption.

Annual Updates should be sent to:

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201

If you have further questions, please contact Joyce Ripianzi, CPA at 774.512.9042, jripianzi@nullaafcpa.com; or your AAFCPAs Partner.

About the Author

Joyce Ripianzi
Joyce is a Partner in the Consulting Division of AAFCPAs and a member of the firm’s growing Managed Accounting Solutions (MAS) practice, which provides “right-size” outsourced accounting solutions, from cloud-based bookkeeping to CFO deliverables, designed to optimize the effectiveness of the modern finance function. She is deeply rooted in the nonprofit industry, and harnesses her years of nonprofit experience and audit, tax, and accounting insight to provide AAFCPAs’ clients with deep expertise in many critical aspects of forming and running a successful nonprofit organization. In addition to helping clients achieve high-performing finance functions, Joyce provides nonprofit management consulting in critical areas, including: GAAP financial reporting; complex revenue recognition issues; nonprofit tax; complex transactions, including for-profit collaborations; internal controls design and testing; and nonprofit governance.