Annual revenue procedures for 2013 - Updates for exempt organizations 

January 4:   The IRS posted the first and second editions of the Internal Revenue Bulletin for 2013 (dated January 2, 2013, and January 7, 2013) providing the following IRS annual revenue procedures—
  • Rev. Proc. 2013-1: Letter rulings, information letters, and determination letters
  • Rev. Proc. 2013-2: Technical advice
  • Rev. Proc. 2013-3: Areas in which rulings will not be issued (domestic areas)
  • Rev. Proc. 2013-4: Rulings and information letters; issuance procedures (Tax Exempt and Government Entities Division)
  • Rev. Proc. 2013-5: Technical advice (Employee Plans and Exempt Organizations)
  • Rev. Proc. 2013-6: Employee plan determination letters
  • Rev. Proc. 2013-7: Areas in which rulings will not be issued; Associate Chief Counsel (International)
  • Rev. Proc. 2013-8: User fees for employee plans and exempt organizations
  • Rev. Proc. 2013-9: Determination letters and rulings (exempt organizations)
  • Rev. Proc. 2013-10: Determination letters and rulings on private foundation status

Read the revenue procedures and user fee schedules: IRB 2013-1 [PDF 1.99 MB] and IRB 2013-2 [PDF 300 KB]

Updates affecting exempt organizations

Rev. Proc. 2013-5

Section 4.04 clarifies when a technical advice memorandum (TAM) is required by the EO Examinations office. Previously, a TAM would not be required if the Director, EO Examinations proposed to revoke or modify a letter ruling found to be in error or not in accord with the current views of the IRS. The 2013 update no longer provides such an exclusion.

Rev. Proc. 2013-8

Section 6.08 is modified to clarify that subordinate organizations included in a group exemption letter and certain organizations with an advance ruling that expired prior to June 9, 2008, are required to file Form 8940 and pay a $400 user fee for public charity classification determinations.


Section 6.08 is also modified to add a new $400 user fee for miscellaneous determination letters issued under the jurisdiction of the Determinations Office that are not otherwise described or covered in section 6.08.

Rev. Proc. 2013-9

Section 11.01, regarding the effect of determination letters or rulings recognizing the exempt status of organizations described in section 501(c)—other than sections 501(c)(3), (9), (17), and (29)—has been revised.


Prior to this update, and dating back to 1962, the IRS would usually recognize such organizations as tax-exempt from the date of formation, regardless of the interval between the date of formation and date of application.


In addition to the practical difficulties of ascertaining an organization’s purposes and activities for this period, such recognition is now potentially inconsistent with the provisions of section 6033(j), which automatically revokes the exempt status of an organization that fails to file required Form 990 series returns or notices for three consecutive years.


The updated procedure adopts a practice similar to the rule for section 501(c)(3) organizations, generally permitting recognition from the date of formation if the organization has: (1) always met the requirements for exemption; (2) applied within 27 months from the end of the month in which it was organized; and (3) not failed to file required Form 990 series returns or notices for three consecutive years.


Section 12.02 is clarified to indicate that a revocation under section 6033(j) is by operation of law, and therefore an organization will not have an opportunity for appeals consideration.

Rev. Proc. 2013-10

Section 7.01 is amended to clarify that subordinate organizations included in a group exemption letter wishing to change public charity status must do so by filing Form 8940 and paying the appropriate user fee.



For more information, contact:


Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax)

+1 (202) 533-3084





©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

Other TaxNewsFlash publications

TaxNewsFlash-Exempt Organizations by year