IRS resumes group rulings subject to new procedures

• Exempt status: The IRS must recognize the central organization’s exempt status in advance of or concurrently with the group ruling application. Therefore, an organization without a formal IRS determination letter must separately submit an exemption application in order to obtain a group ruling.

• Only one group: A central organization may maintain only one group ruling.

• Minimum number of subordinates: At the time of application, there must be at least five subordinate organizations. The application must include each subordinate’s name, mailing address, EIN, formation date, and, for section 501(c)(3) organizations, foundation classification.

• Application method: Electronic filing of Form 8940, Schedule Q, through pay.gov is the sole mechanism to apply for a group ruling. The IRS recently posted revised Form 8940 instructions (rev. December 2025).

• Effective date: Upon issuance of the group ruling, each subordinate generally will be exempt as of its date of formation. However, if any subordinate included in the group ruling application were formed more than 27 months before the date of application and did not otherwise have an IRS determination letter, the effective date of exemption for all subordinates included with the application would be the Form 8940 submission date to the IRS.

• Affiliation and general supervision or control: Each subordinate must be affiliated with the central organization and subject to its general supervision or control (as further described in Ongoing requirements for all groups).

• Matching section 501(c) paragraph: All subordinates must share the same section 501(c) paragraph as each other, but it may differ from the central organization. For example, a section 501(c)(4) organization may maintain a group ruling for section 501(c)(3) organizations, but all subordinates would need to be described in section 501(c)(3).

• Uniform subordinate purpose statement: Any subordinates that share the same purpose must have identical, uniform purpose statements in their governing instruments. For example, all schools in the same group should have the same uniform purpose statement, but hospitals in the same group may have a different, but uniform to each other purpose statement.

• Authorization to include in group ruling: Each subordinate must provide written authorization to the central organization to include the subordinate in the group ruling. Such authorization must also acknowledge that the central organization has the authority to remove the subordinate from the group ruling with or without cause.

• Additional documentation: The application must include non-discrimination policy information for schools, section 501(r) compliance information for hospitals, and an attestation that Forms 8976 were filed for section 501(c)(4) organizations.

• Ineligible subordinates: The following organizations are not eligible to be subordinates in a group ruling:

  • Foreign organization.
  • Private foundation.
  • Type III supporting organization (both functionally and non-functionally integrated).
  • Section 501(c)(29) qualified nonprofit health insurance issuer.
  • Automatically revoked organization that has not had its exempt status reinstated.

Each subordinate organization must be affiliated with the central organization and subject to its general supervision or control.

• Affiliated: All subordinates must be affiliated with the central organization. Facts and circumstances demonstrate that a subordinate is affiliated with a central organization by showing that it is a chapter, local post, or unit of the central organization. Examples include filing a group return that includes the subordinate’s information, maintaining an annually updated directory that includes the subordinate organization, or sharing the central organization’s common religious bonds or convictions.

• General supervision: If a subordinate is not controlled by the central organization, it must be subject to its general supervision. A subordinate is subject to the central organization’s general supervision if the central organization meets both of the following requirements:

  • Data collection: Annually obtains, reviews, and retains information on the subordinate’s finances, activities, and IRS filing compliance. For example, the central organization can obtain a copy of a subordinate’s Form 990 or 990-EZ. However, if the subordinate files a Form 990-N, a different information gathering process will be necessary. Subordinates that do not have a Form 990 filing requirement are not subject to this requirement.
  • Education: Annually educates the subordinate on the requirements to maintain its tax-exempt status. This requirement can be met by providing a link to the most recent version of Publication 557, Tax-Exempt Status for Your Organization.

• Control: If a subordinate is not subject to the central organization’s general supervision, it must be controlled by it. A subordinate is subject to the central organization’s control if:

  • The central organization appoints a majority of the subordinate’s voting directors or officers;
  • A majority of the subordinate's voting directors or officers are also directors or officers of the central organization; or
  • The central and subordinate organizations enter into a written agreement that provides the central organization with control over the subordinate’s activities and operations (e.g., a management agreement).

A central organization generally must annually submit detailed information about changes to its group ruling to the IRS.

• Timing: The SGRI must be submitted at least 30 days and no more than 90 days before the end of the central organization’s annual accounting period. For example, a central organization with a Dec. 31 year end must submit its SGRI no earlier than Oct. 2, but no later than Dec. 1.

• Electronic filing: Although the revenue procedure requires organizations to submit the SGRI electronically, there are no procedures to currently do so. In the interim, organizations should mail SGRIs to the address listed in the revenue procedure.

• Content: The SGRI must include information regarding all changes in the purposes, character, or method of operation of all subordinate organizations included in the group ruling. In addition, it must report a separate list for each of the following categories:

  • Subordinates with name and/or mailing address changes.
  • Subordinates no longer in the group ruling.
  • Subordinates with exemptions that were automatically revoked.
  • Subordinates added to the group ruling, including their date of formation and other statements and representations similar to those applicable for new group rulings.

Each list must include the subordinate’s name, mailing address, and EIN.

• No changes: If there are no changes to report, the central organization must meet this requirement by stating that there are no changes.
• Church entities: The SGRI requirement does not apply to central organizations that are churches or conventions or associations of churches.

• Minimum subordinates: To maintain a group ruling, a central organization must always have at least one subordinate organization.
• Annual Form 990-series: The central organization must file its own annual return, and each subordinate not included in a group return must file its own return or notice unless exempt from such filing obligation.
• Group returns: A subordinate organization that has the same annual accounting period as the central organization may provide written authorization to be included in a group return filed on its behalf by the central organization. Such authorization must be provided annually.
• Removal of a subordinate: A central organization may remove a subordinate with or without cause by providing the subordinate with at least 30 days advance notice and notifying the IRS on its annual SGRI.
• Termination of a group ruling: A central organization may voluntarily terminate its group exemption at any time. The IRS may terminate a group exemption letter at its discretion if the central organization’s exemption is revoked or terminated; the central organization fails to submit a timely SGRI; the central organization fails to exercise general supervision or control; or more than half of the subordinates have had their exemptions automatically revoked for failure to file.